The ECOWAS–EU Economic Partnership Agreement: Towards Inclusive Development?

Abstract

The Economic Partnership Agreement (EPA) continues to court controversy. Many ECOWAS countries together with other civil society organizations have expressed concern over the agreement and continue to campaign against it on grounds of possible damage to West Africa’s fragile economies from opening their markets to free trade with the European Union (EU). This notwithstanding, the objectives of the EPA highlight fundamental agreement between both EU and ECOWAS countries about the instrumental role that the agreement could play in pursuing sustainable development goals by recognizing the importance of implementing competitiveness, poverty alleviation strategies, ensuring EU assistance for structural transformation and embracing the principles of asymmetrical liberalization. The literature provides evidence to the fact that not every developing country integrating into the global economy may be considered positive because trade liberalization on its own cannot ensure the attainment of development objectives from an economic, social and environmental perspective.

This paper analyses the ECOWAS-EU EPA agreement attempting to answer the question: how does the agreement foster both international trade and inclusive development by promoting investment and sustainable growth? Using evidence from countries in the ECOWAS sub-region, this discussion paper covers the following thematic areas: (1) external sector development impact of the EPA agreement and (2) the impact on fostering inclusive growth and development. Our analyses indicate that the EPAs will pose a number of policy challenges for West African countries as their economies increasingly morph into the global economy. However, the EPA provides an opportunity to fast-track global trade and the regional integration agenda in West Africa. It is important that the EU treats the EPA as an instrument of development cooperation and not a conduit to pursue mercantilist corporate interests as did happen in colonial times. We also find out that balanced growth and poverty reduction are not automatic outcomes from liberalization processes, but rather these objectives must be actively promoted by complementary policies in conjunction with appropriate fiscal adjustments in order to fully gain from trade liberalization.

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Appendix: West Africa Statistics

Fig. 4

GDP vs. foreign direct investments. Sources: World Bank (2014) and World Investment Report (UNCTAD 2015)

Fig. 5

HDI and Poverty Statistics. Source: United Nations Development Programme (2015)