The economic relations between the European Union (EU) and African (and other Caribbean and Pacific) countries[1] have been framed in different legal agreements since the end of colonization. In 1975, the Lomé Convention established asymmetric economic relations by which the European countries opened their borders to African countries for their raw materials and agricultural products duty-free and quota-free. In return, African countries would keep the tariffs for imported goods from Europe. The European countries would also give development aid to African countries to foster African economies. These advantages to African countries were to help to develop their infant industry and protect their economies.
The Lomé Convention was replaced by Cotonou Agreement in 2000. Under the Cotonou Agreement, the EU and African regions proposed Economic Partnership Agreements (EPAs) to regulate Trade relations, within the rules of the World Trade Organization (WTO) that recommended symmetrical economic relationships in order to harmonize the global economy[2]. Through these agreements, the EU sought to secure access to the natural resources and agricultural products of African countries. The EU could export their goods to African countries with the same duty-free, quota-free understanding, apart from some sensitive products considered essential for their economies, i.e. various agricultural products, wines and spirits, chemicals, plastics, wood-based paper, textiles and clothing, footwear, ceramic products, glassware, articles of base metal and vehicles.[3] Although the deadline for EPAs was 2007, as of now only 7 out of 34 African countries have signed, ratified and recently implemented this agreement.[4] The Cotonou Agreement will be in force till 2020.
In 2016 the EU published a Joint Declaration[5] calling for a renewed partnership between ACP countries and the EU after 2020. The EU opened a reflection period to establish a new legal framework for the post-Cotonou agreement that would enter into force in 2020. The new post-Cotonou legal framework was to engage the EU in fairer economic relationships with Africa and better combine the economic interests of Europe and the legitimate development aspirations of African countries.[6] The EU focuses its interest on two pillars: the UN 2030 Agenda and the Global Strategy for the EU. However, it forgets that the reality of African economies needs to be taken into account if the same mistakes are not to be made again, dooming the new relationships to further failure.
In the period covered by both Lomé convention and Cotonou agreement there has been a breakthrough in African development thanks to many factors e.g. the investment of other world regions in Africa or the increased exploitation of natural resources on the continent. Nevertheless, Africa is still far from having conditions for sustainable economic growth. More than four decades later there has still not been time for developing economies in Africa to develop their industries and many have expressed their concern about the consequences of such treaties.
The economic relationship in a post-Cotonou agreement should reduce some of the problems caused by the global economy that have put African countries at a clear disadvantage. These problems can be grouped in three categories. The first category is the inequality and fragility of African economies. The lack of quality jobs is the main problem for emerging economies in Africa. Moreover, at least 50% of jobs belong to the informal economy. Beyond this lack of quality jobs, limited infrastructure, weak access to health and education, unreliable access to energy, food insecurity and the lack of respect for the fundamental rights are all hampering genuine development in Africa. These are all fundamental to economic development. If Europe wants to establish trade relations and real cooperation with Africa, then it should accept that the starting point for both are different. Otherwise the EU will continue to condemn African countries to being mere suppliers in the supply chain of natural resources and agricultural products like tropical fruits, coffee or cocoa.
The second category would be the good governance and responsibility of European countries. Banishing the corruption of institutions is a problem for all societies. Sometimes in developed countries it is more subtle, and in developing countries it is difficult to establish control mechanisms. That is why, when the EU points to good governance as a key element for development, it should also work on coherence in its own development policies. The EU should strengthen and develop the Transparency Directives[7] to make viable mechanisms that require its companies to be fully transparent, pay fair taxes and be accountable for their actions abroad[8]. European companies should respect social rights in African countries, just as they do in Europe, and honour the national legislation of the countries where they operate as well as international human rights treaties.
The third category would be the development of their regional trade in the framework of the global economy. Africa has the highest unemployment rates on the planet and the majority of the population depends on local agriculture. Keeping the current conditions required by the EPAs can only lead to a progressive impoverishment of African economies because such agreements are unable to develop local industry and create new jobs in Africa. The protectionism of certain industries in Africa helps preserve their economies and promote some sectors. Likewise, preventing and limiting some foreign agricultural products and services in developing countries would force them to develop business initiatives within their borders and regions. Global economy rules should be adapted to promote regional integration among African countries by adapting the rules to their particular circumstances. The elimination of tariffs on imports of European products into Africa would cut revenues that are used to develop basic services such as education, health and infrastructure. Ensuring the development of each national economy as well as the intra-regional collaboration of African countries should be in the best interests of the EU.
Thus, after more than 40 years with different economic agreements between Africa and Europe, we should ask ourselves if the African countries are really in a position to grow towards the new Sustainable Development Goals. The post-Cotonou agreement should promote coherence between fairer trade relations and development policies in order to contribute to reducing inequality in Africa. The EU’s economic strategies cannot be a new excuse to continue practising the old policies of exploitation of African countries and their natural resources including agricultural goods. African countries have the power to develop their economy by transforming their natural resources in their countries and not just being the first link in the supply chains. Moreover, supporting family farming and agricultural products is essential to assuring food security on the continent.
Last but not least, the infant industry should be a priority for African governments, extending in time the import tariffs and creating export subsidies for their agricultural products. Clearly, foreign investors in Africa need legal security to operate there but foreign companies and investors must be committed to respect for national and international legislation regarding Human Rights and social responsibility towards local populations. If these conditions are not respected, it will be difficult to create fair relationships between the EU and African countries, repeating the failures of the Lomé Convention and the current Cotonou Agreement.
José Luis Gutiérrez Aranda
[1] ACP Countries
[2] However, the WTO foresaw “Some exceptions. For example, countries can set up a free trade agreement that applies only to goods traded within the group discriminating against goods from outside. Or they can give developing countries special access to their markets.” https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact2_e.htm
[3] For example in the case of the EPAs with EAC region http://bit.ly/2gQDgBR
[4] http://trade.ec.europa.eu/doclib/docs/2009/september/tradoc_144912.pdf
[5] https://ec.europa.eu/europeaid/sites/devco/files/joint-communication-renewed-partnership-acp-20161122_en.pdf
[6] https://www.grain.org/article/entries/5777-colonialism-s-new-clothes-the-eu-s-economic-partnership-agreements-with-africa
[8] Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&reference=A8-2017-0227&language=EN
