The ECOWAS – EU Economic Partnership Agreement: Towards Inclusive Development?


Theophilus Acheampong[1] and Ernest Amoabeng Ortsin[2]

 

Abstract

 

Within the Africa, Caribbean and Pacific (ACP) regions, West Africa accounts for about 38% of trade with the European Union (EU). In Sub-Saharan Africa, the ECOWAS region remains the largest trading partner of the EU, exporting goods worth 37 billion and importing goods worth 31 billion yearly.  The exports to the EU consist mainly of fuels and food products whilst the imports consist of refined fuels, finished food products, machinery, chemicals and pharmaceutical products. Nigeria, Ivory Coast and Ghana account for about 80% of the region’s exports to the EU. Given the cordial trading relations between the two economic blocs, some analysts had anticipated that the signing of the Economic Partnership Agreement (EPA) was going to be incident-free. However, the negotiations leading up to the signing of the EPA have been, and continue to be, riddled with back and forth tussles. The governments of West Africa have voiced out concerns about revenue losses and called for commensurate compensation. Civil Society Organizations (CSOs) have also campaigned against what they believe is the possible damage to West Africa’s fragile economies, from the opening up of their markets to free trade with the more advanced EU.

 

The objectives of the EPAs highlight fundamental agreement between both EU and ECOWAS countries about the instrumental role that the agreement should have in pursuing the sustainable development goals by recognising the importance of implementing competitiveness, poverty alleviation strategies, ensuring EU assistance for structural transformation and embracing the principles of asymmetrical liberalisation. Though the objectives of the EPA remain clear with regard to increasing productive investments and job creation, as well intensifying and facilitating trade between ECOWAS countries and the EU, there are thought-provoking questions as to the extent to which these objectives would result in a win-win developmental relationship, given the wide information and trade asymmetry as well the many institutional and supply-side constraints.

 

This paper critically analyses the EPA agreement and its objectives from the perspective of fostering inclusive development in West Africa from an economic, social and environmental perspective. We attempt to answer the critical question: how do the EPAs foster both trade and development co-operation by promoting investment and sustainable growth and development? The development literature provides evidence to the effect that not every developing country’s integration into the global economy may be considered positive because trade liberalisation on its own cannot ensure the attainment of development objectives from both an economic, social and environmental perspective. For example, balanced growth and poverty reduction are not automatic outcomes from liberalisation processes, but rather these objectives must be actively promoted by policies in conjunction with appropriate adjustment to the opening-up of an economy. Using evidence from Nigeria, Ivory Coast and Ghana, this discussion paper covers the following thematic areas: (1) external sector development impact from the trade agreement and (2) their impact on fostering inclusive growth and development.

 

Keywords: Economic Partnership Agreement, ECOWAS, EU, Inclusive Development.



[1]Department of Economics, Aberdeen Centre for Research in Energy Economics and Finance (ACREEF), University of Aberdeen, United Kingdom. Email: theo.acheampong@abdn.ac.uk

[2]Executive Director, Unisphere Ghana, Accra, Ghana. Email: ortsin2020@yahoo.com


Recent Publications - View all