Other developments in international trade negotiations In light of the recent suspension of the WTO negotiations and the ongoing EPA process, African countries have an ever greater interest in diversifying their export markets. They are involved in a number of regional and free trade agreements and negotiations. They are also benefiting from several major preferential schemes such as the USA’s African Growth Opportunity Act (AGOA). Some African countries are also engaged in bilateral trade talks with other regions of the world. This section highlights the major recent developments related to these processes.
African regional integration Fostering African regional integration has been a long-standing objective of the continent. The Treaty of Abuja Establishing the African Economic Community in 1991, (chapter 1) calls for a gradual continental integration process centred on the integration of the five subregions (North, West, East, Central and Southern). EPA processes are also aimed at supporting regional integration in Africa. Unfortunately, integration remains hampered by several obstacles including political and security factors, poor transport and communication infrastructure, a low degree of complementarity in the structures of production and the overly complex web of memberships across different RECs.
This latter problem, also known as the “spaghetti-bowl” situation is particularly acute in some subregions. In West Africa, the most advanced integration is by far that of the WAEMU while EPA negotiations are ongoing between EU and ECOWAS to which is associated Mauritania, a member of the Arab Maghreb Union (AMU).
Cape Verde, a member of ECOWAS, has recently shown interest in negotiating a separate EPA with EU (www.acp-eu-trade.org Most but not all of the COMESA members are negotiating EPAs under ESA. Egypt and Libya are COMESA members but are not part of the EPA negotiation process. However, there are long-term plans for a customs union among COMESA countries so this means that the ESA external tariff may have to be reviewed at a later stage.
Meanwhile, Kenya, the largest economy in Eastern Africa, is associated with Uganda and Tanzania in the East African Community (EAC) customs union. However, while the former two are negotiating EPAs with ESA, Tanzania is negotiating its EPA with SADC. SADC is planning to create a customs union by 2008, implying that Tanzania would, in theory, be part of two customs unions. Moreover, within SADC, Southern African Customs Union (SACU) countries are associated in a customs union with South Africa, which has its own trade agreement with EU. South Africa has, however, been recently associated with SADC in the EPA negotiations, which should contribute to harmonization of positions. In the longer term, it seems that the obvious solution to the question of overlapping membership is the creation of a pan-African free trade area and then customs union, which is the stated objective of the Abuja Declaration.
Preferential trading schemes Thirty-seven African countries are eligible under AGOA, which grants African countries quasi DFQF access to the US market. In 2005, US imports from SSA under AGOA totalled $38.1 billion, up 44 per cent from the previous year, primarily due to an increase in imports of oil. US non-oil imports from Africa actually declined by 16 per cent to $2.9 billion, mainly due to increased competition in the textile and apparel sector in the wake of the termination of the Multifibre Agreement. There were also some minor advances in traditional and non-traditional sectors such as chemical products, fruits, nuts, cut flowers and footwear.
Thirty-four African countries are LDCs and are therefore eligible for the EU’s “Everything but Arms” scheme. Other non-LDC African countries are either beneficiaries of EU’s GSP or are party to a bilateral free trade agreement with the EU (TDCA and Euro-Med process).
Other recent developments with regard to preferential schemes include the participation for the first time of a customs union – Mercosur - in the General System of Trade Preferences (GSTP). GSTP is a South-South initiative under which developing countries grant each other preferential market access.
Bilateral talks Several African countries or groupings are also involved in bilateral trade negotiations in order to diversify their export markets and enhance their integration in the global economic system. For example, WAEMU countries are currently negotiating FTAs with several North African countries. USA and SACU are also engaged in free trade talks. South Africa is discussing a potential FTA with India and Mercosur countries. With the recent explosion of trade flows between Africa and China and India, several countries are carrying out bilateral trade negotiations with these two Asian nations.
With the suspension of WTO negotiations, several countries and regions have expressed an increased interest in enhancing their trade arrangements networks. EU has recently issued a declaration that it intends to negotiate agreements with countries in South and South East Asia, and revive its negotiations with Mercosur. The USA is also currently negotiating several agreements within the Western hemisphere and Asia. In this context, there is a risk that Africa will remain isolated from the wave of bilateral trade agreements, due to its low negotiating and manufacturing capacities.
Africa could in effect remain in a “spoke” situation while richer countries with more negotiating and production capacities are able to place themselves at the centre – or hub – of a network of trade agreements, thereby attracting more investments. In order to avoid such a situation, African countries must -with the support of the international community - continue to reinforce their trade capacities, both in terms of policy formulation and of negotiations and marketable products. They must also reinforce these capacities at the regional level in order to reap economies of scale.
To learn more about this author, visit United Nations Economic Commission for Africa's Website.
Like this article? Share it with your friends
|
|
United Nations Economic Commission for Africa's
Complete
List Of
African-Accounts
Articles
|
|
If you enjoyed this article, get United Nations Economic Commission for Africa's Complete List of African-Accounts Articles For FREE!
|
|
|
|
![[Get Copyright Permissions]](http://license.icopyright.net/images/icopy-w.gif){kind=small}
