WHY SIGNING ECONOMIC PARTNERSHIP AGREEMENT (EPA) 

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By Dr. Engr. Baba J. Adamu, Ph.D      Sept 1, 2015

Holder of United Nation (UN) Certificate on Global Terrorist & an ICT & Security Consultant

Vibrant sustainable economic growth, job creation and lasting development in Nigeria and of-course sub-Saharan Africa depends significantly on increasing the competitiveness, knowledge, innovation and creativity of African entrepreneurs through expanded economic freedom and partnership. Nigerian support for Economic Partnership Agreements (EPA) with Europe and indeed America is critical to Nigeria’s efforts to replace poverty with economic freedom and prosperity in the country and indeed the continent. These trade and development agreements are the drivers of Change that will kick-start reform and help strengthen rule of law and fight against corruption in the economic field, thereby attracting foreign direct investments (FDIs), so helping to create a "virtuous circle" of growth and development.

Economic Partnership Agreements (EPAs) are trade and development agreements between the European Union (EU) and African, Caribbean and Pacific (ACP) countries engaged in a regional economic integration process to create a free trade area (FTA). They are a response to non-reciprocal, preferential and incompatible trade agreements offered by the EU, which do not conform to World Trade Organization (WTO) rules. The EPAs are a key element of the Cotonou Agreement of year 2000, the latest agreement in the history of ACP-EU Development Cooperation and were supposed to take effect from 2008, but during the Extra-ordinary Session of the Conference of African Union Ministers of Trade in Addis Ababa, Ethiopia in April 2014 ahead of the October 1, 2014 deadline for signing of the EPA with the EU; the establishment of the Common Free Trade Area (CFTA) by 2015; extension of African Growth and Opportunity Act (AGOA) by the American Government for 15 more years; and Africa’s strategic response to World Trade Organisation (WTO) negotiations, among others, African leaders rejected signing the Agreement, saying it will have a long-term negative impact on the continent’s efforts towards industrialisation and job creation.

Examining the Economic Partnership Agreements (EPAs)

The EPAs set out to help ACP countries integrate into the world economy and share in the opportunities offered by globalisation as they are designed to provide scope for wide-ranging trade co-operation on areas such as services and standards and go beyond conventional free-trade agreements, focusing on ACP development, taking account of their socio-economic circumstances and include co-operation and assistance to help ACP countries implement the Agreements. It is also to open up EU markets fully and immediately (unilaterally by the EU since 1st January 2008), but allowed ACP countries 15 (and up to 25) years to open up to EU imports while providing protection for the sensitive 20% of imports.

Although, African leaders rejected signing the Agreement, saying it will have a long-term negative impact on the continent’s efforts towards industrialisation and job creation. It is necessary to look critically at the issues, thus:

  1. The Manufacturers of Nigeria (MAN) claimed that Nigeria does not need EPA now until it has been adequately industrialised and been able to trade industrial goods competitively with EU. But what MAN forgets is that Nigerian industrial sector requires FDIs, Service Corporation and Standards to be able adequately industrialised and produce competitively. EPA will provide all that and create competitive advantage.
  2. MAN further argued that after 30 years of preferential market access, the ACP countries still export just a few basic commodities to the EU.  At the same time, the ACP share of the EU market is steadily declining (7% to 3%), stressing further that the existing trade preferences have not had the intended effect of helping the ACP countries diversify their economies into higher value products. MAN should know that the EPAs precisely are direct response to non-reciprocal, preferential and incompatible trade agreements that existed before and are now being reviewed to give new impetus and economic opportunity to ACP countries.
  3. Those that argued that ACP countries presently attract only a small portion of the world’s FDIs, warning that any attempt to coerce the country into a free trade arrangement would only succeed in killing the fledgling manufacturing sector, which has just started to recover from a long period of comatose. EPAs are not coercive, rather, they are based on mutual economic corporation and partnership for the common good of all and global security. Addressing poverty and creating jobs in ACP countries is in the interest of EU and America today more than ever, as it will virtually reduce economic refuges to Western Countries as being witnessed today. More so, EPAs will attract large portion of the world’s FDIs to ACP countries to address challenges in areas of high-cost of production, infrastructure deficit, inadequate and unstable power supply, poor road networks, inadequate rail services, as well as poor and expensive port services. FDIs will come along with Best Practices and will compliment Government efforts to fight corruption while streamlining business activities and challenges of high interest rate on borrowed funds, dearth of long-term loans, multiplicity of taxes, high cost of self-generated energy and high cost of local inputs.
  4. Others have argued that Nigeria, being a commodity-goods-producer country can only export agricultural products to Europe while Europe will export industrial goods such as machinery and so on, which Nigeria lacks the capacity and capability to produce. Yes it may be so in the short-term but in the long run; Nigeria may become a manufacturing hub and export to virtually anywhere as it will be “forced” to produce quality stuff that can match international standard. Currently, we import common tomatoes worth N16 billion naira annually because we lack the capacity and capability to produce, store or process them.
  5. It is further argued that EPA will stifle existing manufacturing industries as they will be uncompetitive as cheaper finished products from European countries will flood Nigerian markets. The ECOWAS region, especially Nigeria, which is more industrialised, will witness unbridled importation which will lead to accelerated shut down of the few surviving industries in the region. This will further de-industrialise the region and would have catastrophic implications on employment generation thereby worsening the poverty situation in the region. Already cheaper finished products from China flood Nigerian markets like flies through smuggling, dumping and faking of made-in-Nigeria products in China, which have virtually killed Nigerian Textile Industries for example. EPA will spark another economic activity in Nigeria such that was seen in China 20 years ago and in India few years back. Nigerian are not lazy people, with the right tool, opportunity and consistent Government policies, the country will become an industrial hub for the entire sub-Saharan region and see less and less trade malpractices such as smuggling and dumping. EPA will help streamline over-lapping functions of regulatory agencies leading to duplication and high cost, while social challenges include insecurity (acts of terrorism, insurgency, militancy, kidnapping, robbery and area boys, etc.) and dearth of skilled manpower will be things of the past.
  6. Some say current efforts by Nigerian manufacturers to export non-oil manufactured products to the ECOWAS region and beyond will greatly be hampered after signing EPA is far from truth, as it is a trade and development agreements between the European Union (EU) and African, Caribbean and Pacific (ACP) regions; hence EPA will also increase more trade ties within the West African Region. In fact under the terms of the agreement, West Africa will continue to be able to shield its sensitive agricultural products from European competition either by keeping tariffs in place or, when necessary, by imposing safeguard measures. To support local agricultural production, the EU has also agreed not to subsidise any of its agricultural exports to West Africa. West African companies will also have more flexibility to use foreign components while still benefitting from free access to the EU market. The EU will complement the market opening effort of the West African partners with a generous development assistance package of at least €6.5 billion for West Africa during 2015-2020. The Economic Partnership Agreement Development Programme will play a crucial role in ensuring the EPA promotes trade and attracts investment to West African countries. This will contribute to development, sustainable growth and wealth creation.

7.    Nigeria is the giant of African with the largest economy in Africa with population of over 170 million and holds huge oil reserves on the continent. Despite all that, Nigeria is hobbled by corruption, lawlessness, security issues, infrastructure deficit, increasing poverty, escalating unemployment, bad governance and Credibility. But If Nigeria could address these problems effectively; the EU has a duty and responsibility to support these goals through creation of avenues for international partners to engage, based on Nigeria’s needs: hence the EPA, as Nigerian economic development is in the security interest of Europe. International partners can help by fine-tuning their own analysis of Nigeria’s political, economic and security dynamics and pushing for a realistic review of the practices that have held Nigeria back. The European Union is a critical partner in this process. It has supported Nigeria’s efforts to improve its democracy and proceed to a fairer distribution of power between its central and federated elements, mediating between national and local interests whilst preserving internal unity. Attempts to address national and regional challenges to peace are consistent with the Union’s values, and reflect the EU’s own security interest in having a stable regional partner. Corruption has undermined the credibility of government, impoverished the country and fuelled insurgency and violence. Nigerians have come to believe that their government not only condones corruption, but facilitates it. The EU has the opportunity to make a difference in Nigeria by promoting democracy and supporting the fight against corruption and development of economic activities. It can start by highlighting the inadequacies of current anti-corruption efforts and supporting civil society engagement that introduces constitutional reforms to strengthen the anti-corruption framework while building capacity. If Nigeria is to play a leading role in economy, advancing peace and democracy in Africa then it has to show progress on these fronts at home; present performance undermines the country’s ability to lead. Constitutional reform and improved security policies are the way Nigeria can build its legitimacy and authority as an advocate at regional and continental level.  The EU should support those goals as it has a stake in Nigeria progress.

  1. After looking at the benefits of the EPAs, many African states like Ghana, Kenya etc., have decided to sign the Economic Partnership Agreement (EPA) with the European Union. West Africa accounts for 40% of total trade between the EU and all the ACP regions. The EU supplies a large part of the equipment that contributes to the economic growth and development in the region. European annual exports are worth approximately €30 billion. West African exports towards the EU account for €42 billion. The agreement should increase this figure even more in favour of African partners. The EU Economic Partnership Agreements, which aim to help creating a "virtuous circle" of growth, stem from the Cotonou Agreement signed in 2000 between the EU and countries of Africa, Caribbean and Pacific (ACP).

As reported by ProShare, Emir of Kano and former CBN Governor Mallam Sanusi Lamido Sanusi who wrote in his own personal capacity in a Financial Times article stated, “it is time for Africans to wake up to the realities of their romance with China” described the relationship as a form of imperialism, whereby China buys crude oil and Nigeria imports a wide range of goods and commodities, ranging from textile and fabrics to electronics and building materials. He suggested that China should be seen as a competitor rather than a saviour or partner that will lead Africa out of the night into dawn. He suggested that Africa was subjecting itself to a new form of imperialism by relying on China for development. In a nutshell, African countries were giving more credit to the Chinese than they deserved. This is not to oppose Nigerian-Chinese relations. In fact Nigeria’s trading relationships with other countries like Canada and America are beneficial. Just recently, in May 2014, Nigeria signed a Foreign Investment Protection Agreement (FIPA) with Canada, a negotiation that started a year earlier where the two countries  sought increased reciprocal collaboration on bilateral trade relations, infrastructure (rail, aviation, road and ICT),  power (electricity, oil and gas), mining, education/vocational training, anti-corruption/Corporate Social Responsibilities, agriculture and Foreign Investment Protection Agreement (FIPA). Similarly, Unites States of America saw the need to advance AGOA beyond a trade-preference arrangement with sub-Saharan Africa to enter into more robust economic partnership for reciprocal sustainable economic development and growth. In this world, no country should be an island especially if there are gains to benefit from multilateral relations. Foreign investment not only produces jobs, but introduces new technology, new management techniques and new market access. That is why signing economic partnership agreement (EPA) with European Union will expand our economic horizon, and propels Nigerian entrepreneurs to raised Standards to compete globally while having access to cheap funds and technology. That is why signing economic partnership agreement (EPA) with European Union is apt.

Conclusion
Nigeria has not yet signed the Agreement which was concluded in 2014 by ECOWAS. But Nigeria must rise-up to its leadership role in African by either deciding to unambiguously agree to sign or not. Although, there are compelling positive reasons to sign, should Nigeria decide not to sign, it will show the country’s lack of understanding and capacity to negotiate Economic Trade Agreements (EPAs).


Dr. Baba J. Adamu has written a Book “Effect of Global Terrorism & the Niger Delta Crisis” published in Nigeria in 2007 that highlighted the need for effective international cooperation on all aspects of counter-terrorism, especially the denial of safe havens to terrorists engaged in such incitement and a proactive intelligence gathering strategy in place backed by technology to forecast or address the scourge as well as the need to provide solutions to the plight of millions of Internally Displaced Persons (IDPs).

 

This Book has been reviewed since 2019 - 2020 with a titled:

Effect of Global Terrorism & the Nigerian Boko-Haram and Other Crises.

 

About the Book

This book provides a condensed comprehensive study of the terrorist phenomenon, orchestrated by so few, but affecting so many. It looks at the definition and perception of terrorism, historical terrorist attacks across the world, outlining important terrorist incidents from the past and present; and examining its roots cause, development and how to build resilience. It is a sweeping narrative and analysis of behaviour, goals, motivations and criteria of terrorists around the world; looking at the pillars of the UN global counter-terrorism strategy and response. It went on to look at Islam and terrorism myth or Islam versus the West connotation, the differences between domestic, international, and transnational terrorism; and demonstrates how contemporary terrorism largely emerged out of guerrilla and insurgency warfare. It further examines counter-terrorism strategy and implementation: intelligence, surveillance, reconnaissance, counter-radicalization and the global challenge of cyber-terrorism, the proliferation of chemical, biological, radiological, nuclear and weapon of mass destruction.

The book also highlights the need to tackle the conditions conducive to the spread of terrorism and radicalization, vulnerabilities such as socio-economic marginalization, failure to respect human rights, increasingly networked society and fragile undemocratic States and a lack of good governance. It argues that the adoption of specific counter-terrorism measures may also have a direct impact on the enjoyment of economic, social, cultural and religious rights. It illustrates how a post-race society where racial equality is still evasive and anti-discrimination measures have become redundant; how poverty is a multidimensional process, so engagement to address the scourge of terrorism is not just about dealing with economic poverty, or income poverty, or material poverty, which is very important, but it is also about overcoming social exclusion, it is about overcoming what is known as voice poverty and inequities. Social change can change attitudes, behaviours, laws, policies and institutions to better reflect values of inclusion, fairness, diversity and opportunity.

It further illustrates the unprecedented rise of al-Qaeda, ISIL, Boko Haram, al-Shabaab culminating in asymmetry warfare and how Nigeria has become the potential terrorist breeding ground and examines the Nigerian Boko-Haram and other protracted crises including youth banditry and kidnappings, drugs and ethnic and social conflicts. In conclusion, it looks at what Nigeria has done, can do to prevent terrorism in Nigeria and Africa, and proffers solution from the point of view of Global Terrorism and Conflict Resolution; and how the North-East, Niger Delta Crises and credible leadership can be the testing ground for peace and beginning of sustainable development in Nigeria.

 

 


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