This presentation was given to the Africa APPG on delegation to the UNECA and AU conference of finance ministers in April 2016. The presentation was given by the African Trade Policy Centre (ATPC), Regional Integration and Trade Division (RITD) at United Nations Economic Commission for Africa. It covers UNECA's key observations regarding Economic Partnership Agreements and the EU.

1. Economic Partnership Agreements between the
European Union and ACP countries:
Focus on Africa
Presentation by ATPC
ATPC-UK Parliamentarians Meeting
4 April, 2016
Addis Ababa, Ethiopia

2. I. (SADC and ECOWAS) EPAs and their impacts on
regional integration and industrial policy space
II. Structural changes within the EU agricultural policy
and implications for EPAs
III. The EU’s negotiating tactics on EPAs and finding
negotiating space within EPAs
IV. Role of parliaments in Africa and the EU in
providing scrutiny and flexibility of EPAs
4 issues raised by UK Parliamentarians

3.  In 2015, ECA/ATPC completed a study looking at the implications of EPAs on
Africa’s regional integration and structural transformation focusing on
Western Africa (ECOWAS+Mauritania) and Eastern and Southern Africa (ESA)
regions;
 Empirical analysis relying on the use of computable general equilibrium (CGE) model.
 Key findings from the study reveal that:
 EPAs will undoubtedly enhance bilateral Africa-EU trade; although for African countries,
trade gains will essentially be concentrated in non-LDCs and few agricultural sectors;
 In addition to bringing little support to Africa’s diversification and transformation efforts, EPAs
will reduce intra-African trade (already relatively low), with most of the reduction being felt in
industrial products;
Remark: although financial compensation to African countries through the EU Foreign
Affairs Council [under the Economic Partnership Agreements Development Programme
(EPADP)] should be acknowledged, such assistance will likely not suffice to compensate
negative impact of EPAs on intra-African trade.
I. EPAs and their impacts on regional
integration and industrial policy space (1/3)

4.  However, using transition period under the EPAs to appropriately sequencing
liberalization (i.e. CFTA in place before EPAs are fully implemented) would go a
long way in ensuring that bilateral trade gains with EU do not undermine intra-
African trade (especially in industrial products);
 Coupling the CFTA with trade facilitation measures would further enhance the
positive effects and improve competitiveness of Africa’s products.
I. EPAs and their impacts on regional
integration and industrial policy space (2/3)
Changes in intra-African trade by main sectors following EPAs vs. EPAs+CFTA vs. EPAs+CFTA+TF – 2040 – $ bn
Source: Mevel et al. (2015)
-10
40
90
140
190
240
EPAs only EPAs + CFTA EPAs + CFTA + TF
Agriculture and food Mining and energy Industry

5.  ATPC is also currently undertaking a comparative analysis of all the EPAs.
 In terms of policy space for regional integration, preliminary findings tend to
suggest that:
 EPAs seem to provide sufficient space for Africa to establish its CFTA; as MFN clause does
not apply on ACP–ACP RTAs.
 However, issues could arise when it comes to establishing an African Continental Customs
Union which may require renegotiations with the EU (as tariff liberalization schedules tend to
be significantly different across the 5 African EPA negotiating groups, and thus difficulty to
align them is likely);
 Not all the EPAs explicitly provide room for renegotiation of the schedules: clarity and
alignment across EPAs would be important.
I. EPAs and their impacts on regional
integration and industrial policy space (3/3)

6.  Agriculture remains a key sector for Africa as about 75% of Africans rely on
the sector for their livelihood (ECA Executive Secretary in Africa Renewal,
2014);
 Results from ECA/ATPC recent analysis on EPAs shows that highest
potential for increase in exports of African non-LDCs to the EU market
following implementation of EPAs would be found in agricultural products
(i.e. meat, sugar, rice, milk & dairy products) – See next slide
II. Structural changes within the EU agricultural
policy and implications for EPAs (1/4)

7. II. Structural changes within the EU agricultural
policy and implications for EPAs (2/4)
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
Paddyandprocessedrice
Cerealsandcrops
Vegetable,fruitandnuts
Plant-basedfibers
Livestock
Milkanddairyproducts
Sugar
Meatproducts
Otherfoodproducts
Mining
Crudeandrefinedoil
Otherenergy
Fishing
Woodproducts
Chemical,rubberandplasticproducts
Textile,wearingapparelandleatherproducts
Non-metalicminerals
Ironandsteel
Othermetalproducts
Motorvehicleandtransportequipment
Electronicandmachineryequipment
Othermanufacture
Transportservices
Otherservices
Changes in West Africa + ESA exports to the EU by sectors following implementation of EPAs – 2040 – $ bn
Source: Mevel et al. (2015)

8.  Nonetheless, our positive findings for African exports could be overestimated
in those agricultural sectors:
 Trade restrictions (such as sanitary and phytosanitary measures, standards and other rules
and regulations) have not been taken into account in the analysis while those restrictions
could limit Africa’s export gains to the EU.
 Similarly, structural changes within EU agricultural policy aiming at making
EU products more competitive would also be expected to limit further export
benefits for African countries:
 Particularly, EU’s Common Agricultural Policy (CAP) has shifted away from a price support
system (with high price guaranteed for stapled agricultural products) to a system with direct
aid to farmers:
 Reducing stapled agricultural products’ prices on the EU markets thereby limiting advantages that
African (and other ACP) countries have gained through preferential access (e.g. GSP, EBA and now
EPAs) to the EU market on these products (e.g. bovine meat, rice and sugar).
 Moreover, such structural change within EU agricultural policy, especially if combined with
greater market access for the EU to Africa under the EPAs, is expected to impact
competition on African markets:
 Exports from the EU becoming more competitive (not just as a result of improved market access
through EPAs but also favorable EU agricultural policy) can facilitate EU’s exports on African markets,
thereby negatively affecting intra-African trade (imports from the EU becoming relatively cheaper)
II. Structural changes within the EU agricultural
policy and implications for EPAs (3/4)

9.  Although some provisions have been included under EPAs to limit to some
extent those negative effects on Africa’s agriculture:
 Agricultural safeguards: the SADC EPA provides for specific agricultural safeguards,
which can be used when imports exceed pre-defined thresholds;
 Agricultural support: The EAC and West African EPAs include provisions to ensure
transparency in agricultural support related to trade; the EU Party in particular is obliged to
regularly report to the ACP signatories on the legal basis, form and amount of such support;
 Agricultural export subsidies:
 The SADC EPA prohibits the use of export subsidies on agricultural goods;
 The Central African EPA prohibits the introduction of new subsidies or increase in
existing subsidies on agricultural products;
 The WA EPA endeavors to refrain from using agri. export subsidies on the EU side;
 The EAC EPA prohibits the EU to grant export subsidies from entry into force.
 Yet, the effectiveness of these provisions in protecting Africa’s agricultural
market will depend, among others, on the capacity of African governments to
use the provisions (e.g. to dispute measures taken by the EU).
II. Structural changes within the EU agricultural
policy and implications for EPAs (4/4)

10.  The EU is a big economic power, deeply integrated, with well-trained trade
negotiators and can therefore afford to engage into negotiations processes
of various trade agreements at different levels (bilateral and multilateral).
 Africa has limited capacities to engage effectively on different fronts, and
economies are not yet sufficiently integrated to speak one strong and
common voice (although RECs have been established).
 Pressure put on African nations (e.g. December 2007 and then October 2014
deadlines set for African countries to sign interim EPAs for not losing
preferential access to the EU) under the argument that there was no
alternative to EPAs for a WTO-compliant trade agreement between the EU
and Africa (or rather ACP counties) have not been helpful in building
confidence over the course of the negotiations:
 Were EPAs really the only WTO-compliant framework? What about tolerated GSP regimes
and AGOA with its WTO waiver?
III. The EU’s negotiating tactics on EPAs and
finding negotiating space within EPAs (1/2)

11.  EPA negotiations have been going on for over twelve years (not just EU’s
fault) and have strongly distracted Africa from its top priority: the regional
integration agenda.
 Moreover, EPAs being negotiated between the EU and 5 different African
groups (again not just EU’s responsibility) has led to provisions/concessions
not necessarily being the same across the various groupings creating further
confusion or incomprehension.
 At the time Africa is trying to establish its Continental Free Trade Area (CFTA)
the question of sequencing does matter:
 As highlighted by findings from ECA study on EPAs, the most important is for Africa to
establish the CFTA first and before EPAs are fully implemented;
 If this is still made possible by the transition period offered under EPAs, more flexibility
should be granted to African countries with possibility to revise EPAs and possibly
aligning some of the provisions across EPAs (ECA’s ongoing work comparing EPA
texts could provide useful insights).
III. The EU’s negotiating tactics on EPAs and
finding negotiating space within EPAs (2/2)

12. IV. Role of parliaments in Africa and the EU in
providing scrutiny and flexibility of EPAs
 Parliamentarians from ACP countries have already asked for flexibility to the
EU during the EPAs negotiation process.
 Given the above, and the spirit of EPAs, parliamentarians from EU countries
should support such calls and the African regional integration agenda in
general.
 Research by the ECA/ATPC has shown that establishing the CFTA, as one
such measure, would bring great benefits to the African countries, and would
only result in minimal losses for the EU in terms of trade.
 Minutes of the ACP–EU Joint Parliamentary Assembly seem to indicate the
institution has mainly followed the negotiations from afar. There is scope for
the parliaments in both Africa and EU to take a more active role in the EPA
process.

13. Thank you very much
for your kind attention!
Email: dluke@uneca.org
Website: www.uneca.org/atpc