Cameroon to ratify economic partnership deal with EU amid doubts
YAOUNDE, Nov. 18 (Xinhua) — Cameroon will soon ratify the Economic Partnership Agreement (EPA) that it signed in 2009 with the European Union (EU), despite reservations among regional African countries over the bloc’s alleged attempt to keep its dominance on its African partners.
The ratification process was the subject of discussion during last Tuesday’s visit to Yaounde by EU Commerce Commissioner Karel de Gutch, who met with Cameroon’s Prime Minister Philemon Yang and Speaker of Parliament Djibril Cavaye Yeguie.
"We discussed how we shall support Cameroon as it makes this important step," de Gutch told the media on the same day, noting that the ratification of the agreement will have many advantages for Cameroon.
The EU had began talks with 79 ACP member states (Africa, Caribbean and Pacific), 10 of which are in the Economic Community of Central African States (ECCAS) zone, but the negotiations have stalled after many African governments raised concerns over potential disadvantages to the African countries.
DISMANTLING TARIFF BARRIERS
The EPAs were meant to establish a free trade zone between the two parties, signifying the application of the principle of reciprocity for ACP countries, which they however consider will weaken their economies, even though it will give them access to European markets.
ACP is mainly comprised of a majority of the Least Developed Countries (LDCs) in the world— 33 out of a total of 48, with seven of them in the ECCAS zone.
Contrary to other LDCs like Cameroon whose access to the EU market was limited to some products such as bananas, cocoa, aluminium, fresh fruits and plywood, most LDCs have been allowed to sell anything on the EU market except weapons, without paying taxes or being subjected to quotas.
However, this is a benefit with little effect because, apart from Angola and Equatorial Guinea that export oil, most LDCs have weak economies with little to offer to their European partners. This explains the lack of a harmonious strategy among ACP countries as they deal with the EU.
To date, 35 ACP countries have signed interim EPAs with the EU, but in a majority of them, there is a clause affirming that the EPAs will become effective after the signing of regional EPAs.
In the case of ECCAS, Equatorial Guinea chose to pull out of the talks, agreeing only to participate in an observer status.
On its part, Gabon has refused to get involved in the talks, noting that it was currently losing an average of 45 billion CFA Francs (92.7 million U.S. dollars) annually when exporting plywood to Europe. A loss which Gabon insists will be three or four times higher if it signs an interim EPA.
PREFERENTIAL TRADE REGIME
Meanwhile, the EU has adopted a law allowing early access to European markets by ACP countries that have signed interim EPAs.
In the case of Cameroon, the country has been allowed to export products such as bananas, transformed cocoa and timber as well as fresh fruits to the EU market.
However, the adoption of the new law poses a threat to countries like Cameroon as it proposes an end to preferential treatment by Oct. 1, 2014 if the country and others within ACP will not have ratified the interim EPA agreements signed in 2007.
Cameroon has always attempted to resist the implementation of certain parts of the interim EPA, arguing that "its Constitution does not recognize incomplete agreements."
However, under pressure from the EU, President Paul Biya announced in July that Cameroon would soon begin the ratification process.
The announcement was strongly condemned by Cameroonian civil society organizations which argued that the population had not been informed about the agreement.
"Other sub-regional countries have not yet signed this agreement, yet this was meant to be a regional agreement. Cameroon is insisting on going ahead to sign the agreement and questions still linger as to what will happen to the country’s relations with its neighbors after the ratification of EPAs with EU," Raymond Ebale, a university lecturer in Yaounde, told Xinhua.
Ebale insists that the talks have not taken into account Cameroon’s development needs, something that is a matter of concern for both the civil society and the government.
"Cameroon had raised concerns over possible reduction in customs revenue, something that was not well responded to by the EU. But to our surprise, Cameroon is still insisting on going ahead to sign the EPAs," Ebale lamented.
70 PERCENT LOSS OF TAX REVENUES
Many observers are suspicious of the EU move which is aimed at ensuring that the bloc maintains its dominance on its African partners.
"The fears are justified based on the studies that have been carried out in the past, showing that the continent could lose up to 70 percent of tax revenues, equivalent to 1,300 billion CFA Francs by 2023 and 2,470 billion CFA Francs by 2030," Ebale continued.
During his visit to Yaounde on Tuesday, de Gutch defended the agreement, arguing that "there was a misunderstanding of issues."
"The idea is that there should be more trade. There should be more economic activities for a country to earn more indirect taxes, " he insisted.
"The response is in initiating a support program for Cameroon, but the best solution is to strengthen the country’s economy," he said, insisting that Europe was a "precious, reliable and well meaning partner." (One U.S. dollar equals about 485.78 CFA Francs)