Reaping the Benefits of the Economic Partnership Agreements in Africa
United Nations Conference Centre, Addis Ababa , Ethiopia, 8-10 October 2008
Statement by Mr. Abdoulie JANNEH, UN Under-Secretary General and the Executive Secretary of the United Nations Economic Commission for Africa
8 October 2008
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Mr. Chairman,
Madam Elisabeth Tankeu, African Union Commissioner for Trade and Industry;
Your Excellencies;
Distinguished Ladies and Gentlemen:
Let me begin by extending to all of you a very warm welcome to the Economic Commission for Africa and to Addis Ababa .
The EPAs continue to draw varied reactions, not only in the constituencies of the negotiating parties—the African, Caribbean and Pacific and European Union States —but across the world. Moreover the private sector, from the small rural farmers struggling to improve their livelihoods through agriculture and the day-time worker in a small cottage manufacturing industry in a small African town, to the workers and owners of the large plantations and formal manufacturing firms in African cities that are concerned by the EPAs. Some of them as you have seen are worried about EPAs, in spite of the opportunities these agreements might have.
The cause of the worry is that they still have not been able to get assurance that the EPAs will deliver on their development promise. This is made worse by the discordant voices on what EPAs will do to African economies. Some of the issues causing concern include the fear that EPAs will undermine regional integration in Africa . These fears were to a large extent confirmed by the rush to initial interim EPAs last year. There are also concerns that the focus of EPAs is on trade to the detriment of development objectives. Again, the audit of the interim EPAs did suggest that the development objective could be constrained by insufficient attention to special and differential treatment and lack of binding commitments on how development-oriented provisions will be financed.
Also of consequence is the fact that EPAs may contain WTO-plus provisions (such as Government procurement; competition; investment rules.), which could in theory contribute to positive development outcomes, but most African countries, lack sufficient institutional and regulatory capacities in these areas. Equally critical is the feeling that EPAs will have significant adjustment costs and impact negatively on already low intra-African trade.
Over the last four years ECA has presented various studies on EPAs at continental meetings in Mombasa (2005); Cairo (2006); and Nairobi (2007); in addition to similar work at country and sub-regional level. We have also made recommendations to you through the African Union Ministers of Trade conferences how the EPAs could be made development tools and also how the agreements could tackle some of these fears ( Cairo (2005); Nairobi (2006); Addis Ababa (2007 and 2008)).
Let me therefore spend some time addressing some of the issues raised in the EPAs debate before concluding with some suggestions on how Africa could take the process forward. From the outset, it is important to recognize that there is a very strong relationship between Africa and Europe , which is why an Africa-EU strategy has been discussed and agreed at the highest level. Trade and development are important pillars in this strategy and the EPAs should be seen in this light—a partnership within the context of long-term cooperation strategic framework.
There is also another important given, and that is, despite the current turmoil in the world economy occasioned by shocks emanating from what is characterized by the 3F's—food, fuel and finance crises—bilateral, regional and multilateral trade negotiations will continue. The international community is agreed that trade has an important role to play, including in resolving some of the challenges arising from the current crises. EPAs are one of several trading agreements that will be negotiated, and the key issue is how Africa, with its regional integration agenda, and weak integration in the global economy and trading system, will want to use these various routes to achieve its overall development objectives.
On the issue of regional integration, there is no doubt that both the configuration of the negotiating groups and the situation resulting from the interim EPAs was not encouraging. Furthermore, some of the commitments that have been made in the interim agreements in the area of market access for the EU, for example in tariff lines to be liberalized and also lists of sensitive products, are not aligned to the agenda of some Regional Economic Communities. It is therefore important that as you meet here, you discuss exhaustively how these shortcomings could be redressed in the final EPAs agreements.
With regard to development, some feel that having predictable regulatory environment, with clear rules in the area of competition, investments, and government procurement, among other issues could help in the expansion of regional markets, which would contribute towards positive development outcomes. On the other hand, there is the view that having fully financed policies and investment programmes, similar to Aid for Trade, in support of EPAs implementation is the only way that African countries can benefit from this process. Both arguments have merit. The challenge is more on sequencing which is why as you consider safeguards at this meeting, I would urge you to bear in mind the importance of having the right sequencing of the commitments that African countries will make. This would also helop determine investment needs over the entire transition periods of the EPAs implementation.
Regarding the economic and social adjustment costs, like in all negotiations, there are bound to be winners and losers. Indeed, research shows that trade reforms can have unexpected impacts on livelihoods at the households level. One cannot therefore deny that some livelihoods might be negatively affected when some of the provisions in the EPAs are implemented. Our common responsibility here is therefore to come up with proposals for EPAs negotiations that will protect or provide alternative adjustment paths for those that are likely to be affected adversely by the reforms occasioned by the final agreement. This could be done by having a gradual process of implementation of the reform measures, and also in the right order.
There are many other important issues that will arise from the technical presentations to be made at this meeting. For instance, there is the important question of financing adjustment costs. The EPAs must take care of this question in unambiguous way. You may therefore have to look how the Aid for Trade implementation could play a part, especially on the supply side, such that the EU and its member states provide support over and above the European Development Fund as African countries have been requesting.
You will recall that on April 3, 2008, the African Ministers of Trade and Ministers of Finance called upon the African Union Commission in collaboration with the ECA to come up with a template that African countries can use in concluding comprehensive EPA agreements. In this meeting, you will be presented with results and recommendations based on a legal audit of interim EPAs. On this basis, a paper has been put together showing clauses and provisions in the various interim EPAs that closely approximate the African common position. Our expectation is that member States and RECS will look at these recommendations and make suggestions for their improvement.
You have a very important task ahead of you and I want to reassure you of ECA's continued commitment to support you in this to ensure that at the end of the day, the vision of a prosperous Africa is realized.
I wish you a productive meeting and declare this meeting open.