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How to resolve free trade issues with EU, by ECOWAS ministers

The Guardian, Nigeria

How to resolve free trade issues with EU, by ECOWAS ministers

By Oghogho Obayuwana, Abuja

10 May 2010

Knotty issues impeding conclusive negotiation of the Economic Partnership Agreement (EPA) with the European Union (EU) can be resolved if the private sector in West Africa is involved in the process, according to ministers from the sub-region in charge of the talks.

Ministers of the Economic Community of West African States (ECOWAS) responsible for the negotiation of the EPA with the EU for free trade between the two regions directed at the weekend that the West Africa’s private sector be "integrated forcefully into the negotiating process" since it would bear the brunt of the regional Common External Tariff (CET) expected to accompany the agreement.

The ministers, under the aegis of the Ministerial Monitoring Committee (MMC), said at the end of a two-day meeting in Mali’s capital, Bamako that the injection of the sector was the best mechanism for securing the private sector interest in the impending agreement with the EU. West Africa is currently finalizing the elements of a five-band CET after its leaders approved a 35 per cent tariff under a fifth band that will be levied on certain products to be determined by regional officials in order to, among others things, protect certain domestic industries from dumping under the impending agreement.

The MMC, comprising the ministers of Finance and Trade of ECOWAS member states, underscored the need for an expeditious finalization of the CET concurrently with a new protocol on rules of origin in order to consolidate regional integration and ensure that ultimately, the region was not short-changed in accessing the EU market under the EPA.

To facilitate compliance, the ministers urged the ECOWAS Commission and its counterpart Commission for the West African Monetary Union (UEMOA) to "strengthen their teams for the ECOWAS CET to ensure the timely finalization of this economic and trade policy instrument" while deliberate efforts should be made to increase the level of intra-community trade which, at between 11 and 15 per cent, has not met its potential as a potent instrument for stimulating the regional economy.

The ECOWAS commission said in Abuja that the ministers also insisted on realizing a balanced and development-oriented EPA that will protect the interest of member states and supported by an EU-funded EPA development programme that will enable the region cope with the adjustment costs of the agreement consistent with the mandate of regional leaders.

They recalled the decision of ECOWAS Heads of State and Government for a "binding and concrete commitment of the EU to the EPA Development Programme (EPADP) backed by a financing plan" to underpin the agreement.

EU funding for the EPADP for which West Africa is requesting an initial �9 billion for the first five years and the modalities for liberalising the West African market under the EPA are among the contentious issues that have slowed down the negotiations that were launched in August 2005.

But the ministers are now saying that the EU should provide "an appropriate response to West Africa’s financing plan for the EPADP during the next negotiations scheduled for Brussels for tomorrow and Wednesday.

On the issue of market access, West Africa has also now offered to liberalize 70 per cent of its market over 25 years after a five-year moratorium while protecting the remaining 30 per cent since about 12 of its 15 member states are categorized as Least Developing Countries (LDC) and they rely substantially on customs revenue. However, the ministers urged the negotiators to make the model used in simulating the net fiscal impact on the economies of member states that informed the 70 per cent offer available to the states so that they can independently corroborate the outcome.

When they rounded off their meeting, the ministers frowned at the attempt by the EU to extend the existing non-execution clause in the Cotonou Partnership Agreement relating to member states’ compliance with democracy and good governance requirements into the EPA, arguing that this was not only alien to a trade agreement such as the EPA but also inconsistent with the requirement of the World Trade Organization (WTO). They also insisted that "under no circumstance will there be a departure from the position that the political dialogue instruments contained in the Cotonou Agreement can be used in trade relations between the two regions."