Why Africa Rejected 'Divide & Rule' EU Trade Deal: During the Lisbon AU-EU Summit, the Majority of African Nations Refused to Sign the New Trade Agreements Put Forward by the EU. They Said the Deals Brought Them No New Benefits but Left Their Industries Threatened by European Imports. Neil Ford Explains Why Africa Took This Stance
Ford, Neil, African Business
Perhaps the most outstanding feature of the Africa-European Union summit in Lisbon in December was Africa's bold and united refusal to be browbeaten by the EU into accepting the status quo as sign of progress. (African Business, January 2008).
The overriding object of the summit was to try to settle the rules of trade between Africa and Europe but little progress was made on this count. The failure to reach agreement could have important ramifications for both Africa and Europe. Africa could lose some export markets but Europe could find itself facing supply deficits of vital raw materials and also losing ground on its own exports to Africa.
It is difficult to grasp the significance of the Lisbon meeting and of the ongoing trade discussions without some understanding of exactly what is at stake.
Most European colonial powers enjoyed close trade ties with their African colonies; colonialism provided direct access to raw materials and also an, albeit limited, market for manufactured goods from the metropole. The creation of entire colonial economies built on a narrow export market obviously left most African states in a vulnerable position at independence.
This dependency was recognised by the colonial powers, which provided the newly independent states with preferential trade agreements that enabled their former colonies to maintain their existing export industries by allowing duty free export to the European country in question.
In addition, the former colonial power insisted on duty free access to the African market for some of its consumer goods and other processed output. Although this arrangement prevented severe economic dislocation at independence and helped to stabilise the international price of some commodities, it also entrenched the existing dependency on a narrow range of raw materials. Many also argued that it was of more benefit to Europe than to Africa.
The creation of the European Economic Community (EEC) and its gradual evolution into the EU forced member states to adopt common tariff structures. Following the accession of the biggest former African colonial power, the UK, to the EEC in 1973, an all-embracing preferential trade agreement was created between the EEC and almost all of the former colonial territories within the Africa, Caribbean and Pacific (ACP) group of nations. This trade agreement, which allowed all ACP states to export many goods duty free or with reduced tariffs, was finally signed as the Lome Convention in 1975.
It was periodically renewed until it was replaced by the Cotonou Agreement in 2002. This deal sought to encompass efforts to tackle poverty and promote sustainable development within the trade agreement.
New framework of trade
However, it was becoming increasingly clear that both Lome and Cotonou broke World Trade Organisation (WTO) rules on fair trade because they discriminated against non-ACP developing countries. Matters were eventually brought to a head by complaints from Latin American banana exporters that Caribbean producers had unfair access to the EU market. The WTO ruled in their favour and insisted that a new framework for trade between the ACP and EU be installed by the start of 2008.
Rather than replacing Cotonou with another deal that would encompass all ACP states, Brussels has decided to negotiate separate Economic Partnership Agreements (EPAs) with all 78 ACP governments. The EU insists that this is necessary to abide by the WTO rules.
However, during 2007 it became clear that many African states were not happy with the deals offered to them. Although the pace of negotiations speeded up during the final months of the year, just 14 states had agreed an EPA by the time of the Lisbon summit.
Each ACP country will retain preferential access to all EU member states for many of its key commodities. …