I have long wanted to address the vexed subject of the Economic Partnership Agreement (EPA). To be sure, the EPA is a significant trade deal, probably the most far-reaching and contentious trade agreement in recent history between developed and developing countries. Given my familiarity with the negotiations, the subject has been on my radar for quite some time. It was, indeed, a column idea crying for attention! The fierce controversy that has dogged the EU-West Africa EPA in Nigeria also makes it appropriate for me to address the subject. And address it I will in this week’s column. But, unusually for this column, the piece will be in two parts because of the breadth of the subject matter.
My focus in this week’s series is on the negotiating history of the EU-ECOWAS EPA. I will assess the negotiations of the trade deal against some theoretical underpinnings. In the concluding series next week, I will analyse the agreement itself, focusing on the scope and nature of the obligations as well as their implications for Nigeria. I will also tackle head-on the vexed question of whether or not Nigeria should sign the deal. Before I start this week’s series, however, let me first explain, by way of context, my interest in the EPA.
In 2004, two years after the EPA negotiations were formally launched, I was asked by a European policy think tank, the European Centre for Development Policy Management (ECDPM) in Maastricht to produce a paper on the EPA, aimed at informing “policy-makers, negotiators, regional actors and civil society” about the negotiations. I wrote the paper, got paid for it (!) and followed the peaks and troughs of the negotiations for some time until they stalled and appeared to be going nowhere. However, some developments this year aroused my interest in the EPA again.
Earlier this year, Rhodes University in South Africa appointed me as external examiner for a PhD thesis that addressed the subject of the EU-South Africa Trade, Development and Cooperation Agreement (TDCA), which was signed in 1999 and came into force in 2004. The thesis argued that, contrary to official and some scholarly opinion, South Africa did not “punch above its weight” in the negotiations because, in the author’s view, the TDCA did not deliver a “development outcome”. After examining that thesis, I began to think about trade negotiations between developed and developing countries in general and the EPA in particular, and considered doing a journal article on the EPA. But it was not sufficiently a priority for me, especially given other commitments; so I didn’t write the article.
Then, later in April this year, the Commonwealth Secretariat invited me to join the technical committee for one of its major trade projects. During the committee’s first meeting, I met the organisation’s head of regional trade and integration who told me that the signing of the EU-ECOWAS EPA was proceeding well. That didn’t sound right to me. It was contrary to my understanding that Nigeria really loathed the deal and had an adamantine resolve not to sign it. I told him that, indeed, Nigeria would do anything to scupper the agreement if it could mobilise a strong resister group across ECOWAS member states to achieve that goal.
Was I exaggerating? Not in the least. Nigeria’s opposition to the EPA is extremely strong and is public knowledge. Indeed, I think it was Charles Soludo, former central bank governor, who fired the first shot in a hard-hitting article in the Financial Times in April 2012 titled “Africa needs honesty over EU trade deals”, in which he argued that the EPA was “harmful”, “intrusive” and “unnecessary”. Then, in May 2014, at the Extra-Ordinary Session of the Conference of African Union Ministers of Trade in Addis Ababa, Ethiopia, the then trade minister, Segun Aganga, railed against the EPA, arguing that it would have a long-term negative impact on Africa’s industrialisation. Nigeria’s position “is very clear”, he said: Africa should not give away its “abundant natural resources” and “large market” by signing the agreement. Of course, the Nigerian business community is also opposed to the agreement. At a recent conference in Abuja, organised by Africa Today magazine, the president of the Manufacturers’ Association of Nigeria (MAN), Frank Jacobs, said that Nigeria “does not need EPA until it has been adequately industrialised to trade industrial goods competitively”. The truth is that the public space in Nigeria is saturated with anti-EPA sentiments and rhetoric. Some commentators even went into overdrive by comparing the EPA to colonisation and even slavery!
But, let’s be clear, these are not the views of ECOWAS itself. In one statement, ECOWAS said that, with the EU-West Africa EPA, “an era of healthy trans-national business activities and trade compatibility is being heralded”. Indeed, the conclusions of the EPA negotiations were approved by the ECOWAS “Authority of Heads of State and Government” at their summit in Accra on 10 July 2014, and, at another summit held in Abuja, on 15 December 2014, the Authority “instructed” its negotiators “to expedite actions to organise, as soon as possible, the signing of the Agreement and its ratification by all Member States”. For ECOWAS, the EPA signing process “has commenced and it’s ongoing”. And in order to “achieve complete success”, the “Authority has also now mandated” its negotiators “to pursue the awareness campaigns and expedite the setting up of the EPA institutional mechanism and related texts”.
Clearly, therefore, Nigeria’s negative assessment of the EPA is completely out of kilter with ECOWAS’s positive take on the trade deal. But this is not surprising. Nigeria has always taken a different view from most ECOWAS member states on the EPA. While negotiation theories suggest that strong regional collaboration and coordination is an indispensable source of substantial leverage in trade negotiation, such collaboration or coordination was lacking in ECOWAS during the EU-West Africa EPA negotiations.
For instance, as one ECOWAS negotiator told the Oxford academic Emily Jones in an interview for one of her books on negotiations: “ECOWAS is made up of 16 countries. We rarely met among ourselves before coming to Brussels for negotiating sessions. When we meet there, we accept things and then go back…”. These division and lack of cohesion date back to the launch of the EPA itself. For instance, when ECOWAS decided to launch the EPA negotiations in 2004, the decision was driven mainly by the West African Economic and Monetary Union (UEMOA), the francophone part of ECOWAS, which has pursued economic integration faster than the Anglophone group. Nigeria, which never wanted the EPA in the first place, or at least was not prepared for the negotiations, felt betrayed by the ECOWAS decision.
The EPA was launched in 2002 with a view to replacing the Cotonou Agreement in 2008. Signed in 2002, the Cotonou Agreement itself replaced the original preferential Lome Convention, which lasted from 1975 to 2000. At the WTO Ministerial Conference in Doha in 2001, the EU secured a waiver to enable it to continue to offer preferential treatment to African, Caribbean and Pacific (ACP) countries under the Cotonou Agreement until it expired and was replaced by the EPA 2008. But by 2007, when the negotiations were supposed to have been concluded, only the Caribbean had agreed to a comprehensive EPA, known as the EU-CARIFORUM EPA. The EU wanted other ACP countries to sign “interim EPAs” to continue to enjoy preferential market access. Many African countries signed the interim deal. In West Africa, Ghana and Cote d’Ivoire signed an interim EPA to protect their exports to the EU. Nigeria did not sign an interim deal, and so lost preferential market access under the Cotonou Agreement, reverting to the EU’s less favourable General System of Preferences (GSP).
Now, I am not suggesting that Nigeria should have signed an interim agreement. My concern here is on a much broader issue: Nigeria’s negative attitude to, and chronic lack of preparation for, trade negotiations. While negotiation theories tell us that power asymmetries shape the outcome of trade negotiations, it is also true that even a small developing country, let alone a major one like Nigeria, can ‘punch above its weight’ through proper preparation and smart use of negotiating strategies and tactics. As one experienced trade negotiator puts it, “80 per cent of the work in a given negotiation should go into preparation and 20 per cent into the negotiation itself”. But in Nigeria the 80/20 rule is reversed. We give 20 per cent to preparation, if we prepare at all, and then devote 80 per cent to being defensive and saying “No, No, No” during the negotiations, instead of having offensive and defensive positions based on sound analysis and evidence.
As it was with the Uruguay Round, which led to the establishment of the WTO, so it has been with the EPA. The Uruguay Round negotiations started in 1986 and were concluded in 1994. But, as a senior ministry of trade official once pointed out, four years into the negotiations in 1990, Nigeria did not have a national mechanism for formulating its positions on the critical issues in the negotiations. As a result, Nigeria’s participation in the negotiations were generally weak, except on a few issues, such as the exports of domestically prohibited goods and other hazardous substances on which it took a very defensive position. Then take the EPA. Although the negotiations were launched in 2002 and had been flagged several years before then, it was not until late in 2004 that Nigeria commissioned a ‘study’ to ascertain the impacts of an EPA on the economy and to make recommendations that “will facilitate the effective participation of Nigeria in the EPA negotiations”.
But if any report was produced, it was certainly useless because Nigeria’s participation in the EPA negotiations was anything but “effective”. And nothing seemed to have come out of the impact study given that the trade minister was still saying in 2014 that Nigeria must not sign the EPA “without first carrying out a robust economic analysis of its overall impact”. So, what about the impact assessment supposedly ‘commissioned’ by the National Planning Commission and the Federal Ministry of Commerce in September 2004? This, surely, is not the attitude of a country that wants to expand value-added exports rather than just exporting natural resources. Such countries prioritise market access negotiations and accord them the seriousness they deserve both in terms of preparation and the actual negotiations.
None of this, of course, suggests that there were no proper and comprehensive EPA negotiations or that the agreement was imposed, in a ‘take-it-or-leave-it’ fashion, on ECOWAS by the EU. After all, as ECOWAS points out, the negotiations took place on both sides “at the levels of Experts, Senior Officials and Chief Negotiators”. True, few would suggest that the levels of negotiating experience and expertise were the same on both sides. The EU, unlike ECOWAS, has negotiated countless trade agreements and, surely, would be in a stronger position than ECOWAS in terms of experience and technical expertise. But, that said, the EPA was not a “green-room” type deal. ECOWAS could have walked away from the negotiations if it considered that there was a better alternative to a negotiated agreement, known in negotiation theories as BATNA. But it did not. Nigeria’s participation may be lukewarm but it did not walk away either! The negotiations were closed in Brussels on 6 February 2014 and, as pointed out above, ECOWAS Heads of State and Government approved the outcome at their summit in Accra on 10 July 2014.
Of course, under international law, the crucial stages in any international negotiated agreement are the signature and the ratification by the parties in accordance with the relevant provisions of the agreement. Article 107(2) of the EU-ECOWAS EPA provides that the agreement shall enter into force once all EU Member States have ratified it and “at least two-thirds of West African states have ratified it”. Signature and ratification by individual EU Member States and the EU itself, through the Council, would be relatively straightforward because all EU Member States have acted, more or less, as one throughout the negotiations. But the same cannot be said of ECOWAS member states, and getting even the lower threshold of two-thirds of ECOWAS member states to sign the agreement, let alone ratify it through the legislative process, may prove to be problematic, especially if Nigeria continues to be against the deal and can mobilise enough support among ECOWAS member states to derail its signing.
Which, of course, raises the question: why is the agreement so controversial in Nigeria? This is a critical question that goes to the heart of what the agreement stands for. I believe it’s important, for a proper and informed debate and decision-making, to assess the agreement in terms of what it actually says or offers. So, as I said in the beginning of this piece, I will turn my attention to the EU-West Africa EPA itself in the conclusion of the series next week. And, to be clear, I will give readers my view on whether or not Nigeria should sign the agreement. So, let’s meet again next week!
Olu Fasan
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