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

Part of the Advances in African Economic, Social and Political Development book series (AAESPD)

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.

Keywords

  • International trade
  • Trade policy
  • Regional integration
  • Inclusive development

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Fig. 1
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Notes

  1. 1.

    West Africa is defined to include the 15 member states of the Economic Community of West African States (ECOWAS). See: http://www.ecowas.int/member-states/

  2. 2.

    http://www.afdb.org/en/blogs/measuring-the-pulse-of-economic-transformation-in-west-africa/post/african-economic outlook-2015-resilient-economies-positive-forecast-for-west-africa-14406/

  3. 3.

    Ibid.

  4. 4.

    Ibid.

  5. 5.

    http://www.crepol.org/acria6/boosting-investment-for-transformative-growth-and-competitiveness-in-african economies-a-review-of-t

  6. 6.

    http://trade.ec.europa.eu/doclib/docs/2009/september/tradoc_144912.pdf

  7. 7.

    http://agritrade.cta.int/Agriculture/Topics/EPAs/West-Africa-heads-of-state-defer-final-decision-on-the-regional-EPA agreement

  8. 8.

    http://trade.ec.europa.eu/doclib/docs/2009/september/tradoc_144912.pdf

  9. 9.

    http://ec.europa.eu/trade/policy/countries-and-regions/regions/west-africa/index_en.htm

  10. 10.

    http://www.eeas.europa.eu/delegations/solomon/eu_solomon/trade_relation/epa/index_en.htm

  11. 11.

    http://www.metmuseum.org/toah/hd/aftr/hd_aftr.htm

  12. 12.

    Liberia is the “oldest republic” in Africa. It was the only territory in West Africa that was not colonized. Its capital, Monrovia, was founded in 1822 by freed slaves resettled by the American Colonization Society.

  13. 13.

    The Lomé Convention was renewed every 5 years until its expiration in 2000.

  14. 14.

    http://ec.europa.eu/europeaid/where/acp/overview/cotonou-agreement/index_en.htm

  15. 15.

    The delays in the negotiating process precipitated the initialling of an interim Economic Partnership Agreement (iEPA) by Cote d’Ivoire and Ghana in December 2007.

  16. 16.

    The ratification process is being delayed further as a result of some more objections from Nigeria.

  17. 17.

    http://trade.ec.europa.eu/doclib/docs/2015/october/tradoc_153867.pdf

  18. 18.

    Ibid.

  19. 19.

    http://ec.europa.eu/trade/policy/countries-and-regions/development/generalised-scheme-of-preferences/

  20. 20.

    http://trade.ec.europa.eu/doclib/docs/2014/october/tradoc_152839.pdf

  21. 21.

    Ibid.

  22. 22.

    http://www.st-andrews.ac.uk/business/distance/Economics/Reading/Critique_trade_theories.pdf

  23. 23.

    http://www.eeas.europa.eu/delegations/solomon/eu_solomon/trade_relation/epa/index_en.htm

  24. 24.

    Local content is defined here to include the domestic sourcing of raw materials, labour and other factor inputs to the production process.

  25. 25.

    https://www.cairn.info/revue-economie-internationale-2008-4-page-5.htm

  26. 26.

    http://www.oecd-ilibrary.org/social-issues-migration-health/trends-in-income-inequality-and-its-impact-on-economic growth_5jxrjncwxv6j-en

  27. 27.

    http://www1.worldbank.org/prem/lessons1990s/chaps/05-Ch05_kl.pdf

  28. 28.

    Ibid.

  29. 29.

    http://trade.ec.europa.eu/doclib/docs/2013/november/tradoc_151898.pdf

  30. 30.

    http://www.ictsd.org/bridges-news/bridges-africa/news/the-recent-eu-west-africa-trade-deal-is-not everybody%E2%80%99s-success

  31. 31.

    Ibid.

  32. 32.

    Theoretical tariff upper band.

  33. 33.

    Supra.

  34. 34.

    Supra.

  35. 35.

    The NTEs sector has overtaken cocoa as Ghana’s third highest export earner. The government of Ghana has an annual revenue target of US$5 billion from the export of non-traditional products within the next 5 years, under the Ghana National Strategy for the non-traditional export sector. Total earnings from Ghana’s non-traditional export sector were driven by three main sub-sectors: namely agriculture, processed and semi-processed foods, and handicrafts. Cocoa paste, cashew nuts, articles of plastic and canned tuna took the top-four spot for top-10 non-traditional export items, contributing 40.35% to total non-traditional exports. Others were veneers, natural rubber sheets, animal feed, medicinal plants, aluminium plates and iron/steel products. See: http://ghanaports.gov.gh/news/1054/ghana-chalks over-usd2bn-from-non-traditional-exports

  36. 36.

    http://www.myjoyonline.com/business/2014/February-12th/non-traditional-exports-ghana-faces-eu-ban.php

  37. 37.

    The “GSP+” enhanced preferences mean full removal of tariffs on essentially the same product categories as those covered by the general arrangement. These are granted to countries which ratify and implement core international conventions relating to human and labour rights, environment and good governance. See: http://ec.europa.eu/trade/policy/countries-and-regions/development/generalised-scheme-of-preferences/index_en.htm

  38. 38.

    The UNDP describes extreme or multi-dimensional poverty using ten indicators. Where a person falls into three of the indicators, they are said to be in multi-dimensional poverty. See Technical Note 5 at http://hdr.undp.org for more details.

  39. 39.

    http://ec.europa.eu/trade/policy/countries-and-regions/development/aid-for-trade/

  40. 40.

    http://www.afdb.org/en/news-and-events/article/itc-afdb-to-hold-roundtable-on-non-tariff-measures-affecting regional-trade-in-ecowas-15835/

  41. 41.

    https://www.wto.org/english/res_e/booksp_e/anrep_e/wtr12-2d_e.pdf

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Correspondence to Ernest Amoabeng Ortsin .

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Appendix: West Africa Statistics

Appendix: West Africa Statistics

Fig. 4
figure 4

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

Fig. 5
figure 5

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

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Acheampong, T., Ortsin, E.A. (2019). The ECOWAS–EU Economic Partnership Agreement: Towards Inclusive Development?. In: Seck, D. (eds) The External Sector of Africa's Economy. Advances in African Economic, Social and Political Development. Springer, Cham. https://doi.org/10.1007/978-3-319-97913-7_10

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