Is there a life after EPAs?. The future of EU-Africa trade relations. Isabelle Ramdoo ECDPM 24 July 2014. Structure of the presentation. Part 1 : State of play of the relationship between EU and African regions/countries Who’s in? Who’s out? What’s in? What’s out? What now?
The future of EU-Africa trade relations
24 July 2014
Part 1 : State of play of the relationship between EU and African regions/countries
Part II: EU trade relations with third parties: what implications for EU-Africa trade ties?
Part III: Conclusion: some suggestions
BRIEF OVERVIEW OF EU-AFRICA RELATIONSHIP
EPAs: WHO’S IN? WHO’S OUT?
WHAT’S IN? WHAT’S OUT?
The current EPAs are about trade in goods. Services, TRIPs and other trade-related issues are not included. Most of them are in a RDV clause but there is no hurry and no specific timeline to conclude on these.
Critical issues – domestic support to EU farmers for instance, have not been fully captured. Still left to multilateral negotiations but with slow progress at the WTO, these may not be addressed soon;
Still too many trade arrangements governing trade between EU and Africa: EPAs, EBA, GSP, DCFTA with North Africa. No mention on how to address these inconsistencies, that are a serious barrier to building regional markets and value chains (cumulation does not work well among those regimes)
Most regions (except for WA) have only an FTA, with no financial package attached to it to address fiscal challenges EPAs could bring, and a limited focus on “development”. Remember EPA was supposed to be about development….
EU TRADE AGREEMENTS WITH THIRD PARTIES
WHAT IMPLICATIONS FOR AFRICA-EU TIES?
CASE OF MEGA TRADE DEALS
EU does not have a trade agreement yet in place with countries representing >60% of its trade
Source: European Commission, 2014
But mega-trade deals are becoming strategic for all bog players. Three major ones:
Trans-pacific partnership (TTP) – 12 countries incl. US, Japan, Canada, Australia, Singapore, Mexico, Chile, New Zealand, Brunei, Peru, Vietnam and Malaysia.
Transatlantic Trade and Investment Partnership (TTIP) between EU and US
Regional Comprehensive Economic Cooperation (RCEP), 16 countries of which 10 ASEAN countries (Brunei, Myanmar, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, Vietnam); Australia, China, India, Japan, S. Korea, New Zealand.
Regulation, standards, norms
Need to look at the future trade relationship between Europe and Africa in a broader context – the inter-connectedness between Europe and big players will have spill-over effects on EU-Africa trade relations
Mega trade deals will NOT be mainly about tariffs.
They will basically set new “standards” and “norms” and will involve far-reaching agreements on services and investment with major implications for product quality;
Impact will depend on the level of dependency on countries’ trade on EU or US market. Today, 40% of Africa’s trade is destined to EU or US.
Higher trade concentration, higher risk of preference erosion or impact of standards-taking
Our RoO are quite flexible – good for us but means that they open the backdoor for cheap inputs (if standards are lowered) that will impact on the cost of production in Europe If change in regulations are anticipated and properly managed to what we want, flexible RoO could lead to this…
1. Critical to follow the current mega-deal negotiations, as they will set the tone for the evolving global trading system
2. African countries should on their side, take unilateral initiatives to calibrate domestic reforms to be prepared to meet standards. Otherwise the risk is marginalisation since you will de facto become rules takers.
3. In parallel, since the Africa group is a strong one at the WTO, ensure that they are at the forefront in negotiations there to ensure big players do not “multilateralise” their FTAs through WTO. There is a real role to play there to ensure advanced countries and few large developing countries do not have the monopoly of setting standards and rules, to impose them on countries that did not have their say in the negotiations
5. EPAs have RDV clauses and US might ask for FTA in the future (beyond goods): but ensure proper sequencing this time by completing regional/continental agenda first before opening up on issues where countries and regions are unprepared and have not measured fully the consequences. The risk is that as EU and US conclude advanced FTAs, this will become the standard for their future trade deals and might be difficult to resist, if unprepared.
for your attention
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