Trade Talks Challenge Governments to Practical Action

Image: Flickr, Russell Street
Image: Flickr, Russell Street

The controversial negotiations over trade agreements between the European Union and regional blocs in Africa are challenging governments to rethink the best way of promoting economic integration across the continent.

The impact of the agreements will depend on whether governments put their efforts into consolidating existing regional communities, or allow grand plans for integration to become surrogates for action.

Africa has never been short of ambitious economic and political integration schemes or grand plans. However, with very few exceptions these plans have remained unrealized. A number of questions have been posed and a plethora of theories propounded to explain this unsatisfactory state of affairs. A number of new initiatives have been tried, yet the status quo largely prevails.

The South African Institute of International Affairs and the European Centre for Development Policy Management recently organised a high-level conference that tackled a number of pertinent issues relating to the impact on regional integration in east and southern Africa of negotiations on Economic Partnership Agreements (EPAs) between the European Union and regional groupings of countries in the Africa, Caribbean and Pacific areas of the world.

It became clear from the conference discussions that in Africa the problem is no longer just the failure to deepen integration but rather how to solve fragmentation, which ironically arises from countries having overlapping memberships in many regional integration bodies with similar plans.

Multiple and overlapping memberships in regional economic communities (RECs) have created a complex web of competing commitments which together with different trade rules result in high costs for intra-Africa trade and undermine trade facilitation efforts that should be at the core of the integration agenda.

This problem has been exacerbated by EPA negotiations with the EU. Though EPAs are meant, inter alia, to promote regional integration, their immediate impact has been the further fragmentation of existing regional economic bodies across Africa – except for the East African Community where the inverse seems to be true.

There are many genuine grievances about the negative impacts of EPAs on efforts to deepen integration in Africa. The negatives are well known and have received a lot of “airtime” in many forums in Africa and abroad. However, as many credible analysts have noted, what is perhaps more important in charting the way out of the current quagmire is the fact that EPAs have, to a significant extent, forced a serious discussion about the efficacy of the current integration path, characterized as it is by multiple and overlapping memberships.

The talks about these agreements also provide an opportunity for African countries to reflect on what kind of integration they really want. For instance, in negotiations on a number of key issues, African countries wanting to trade with one another are still finding it difficult not to discriminate against one another’s suppliers – yet they are now supposed to liberalise and open up their markets to EU suppliers.

In the Southern African Development Community (SADC), it is taking such a long time to negotiate intra-regional services trade liberalisation that it is unlikely that any real movement will happen any time soon. Even if a draft protocol on services now under discussion is ratified in the near future, it will most likely take years to implement and there is nothing that ensures uniform implementation across the region. Perhaps the EPAs will provide the much needed impetus for such regional processes.

In response to the current fragmentation, which the EPAs have taken to absurd levels, the African Union (AU) has embarked on a drive to rationalise and harmonise Africa’s regional economic communities and their policies and activities. It is not yet clear what difference the AU efforts are making but what is evident is that the appetite for more RECs is gone and the way forward is seen to be largely in the consolidation of some viable existing ones.

One of the most encouraging things to emerge from the recent conference is the detectable shift in preference from the linear economic integration model – in which states move from free trade agreements (FTAs) to customs unions, common market and so forth – towards simple FTAs dealing with the nuts and bolts of easing trade across regional borders.

In line with this thinking, doubt has been expressed about the necessity of having both a SADC and a Common Market for Eastern and Southern Africa (COMESA) customs union.

The latest initiative aimed at resolving the challenges arising from overlapping memberships is the so-called Tripartite Alliance involving COMESA, SADC and the East African Community.

Though the alliance recently received major political support from heads of states and government, and has many important trade facilitation objectives, it still purportedly aims to establish a customs union in the long term. Many African scholars and policy makers believe its original idea of having only a free trade agreement was the most viable way forward, albeit difficult to achieve in practice. This is because simply declaring a customs union may give its authors a sense of achievement but the union might turn out to be largely hollow in substance.

Finally, it is clear that the EPAs have led to an important rethink of the regional integration approach being pursued in Africa. Whether their impact will be positive or negative will largely depend on African countries’ responses to them – that is, whether governments learn from the mess they have created, and which EPAs have compounded, and concentrate their efforts on consolidating existing regional communities instead of allowing grand plans to become surrogates for action.