Africa: European Union Economic Partnership Agreements

Baroness Sheehan Excerpts

Thursday 17th November 2016 Lords Chamber

[Baroness Sheehan (LD)]

My Lords, I thank my noble friend Lord Chidgey for securing this important debate. On the face of it, economic partnership agreements between the EU and economic regions of Africa should be a welcome development for Africa, purporting, as they do, to promote trade and investment between African, Caribbean and Pacific partners and the EU, with the laudable aim of contributing to sustainable development and poverty reduction. Furthermore, we are told that EPAs are tailor-made to suit specific regional circumstances; that they will open up EU markets fully and immediately, but allow African, Caribbean and Pacific countries long transition periods of up to 25 years to liberalise up to 80% of their markets to EU imports, while still providing protection for sensitive sectors.

EPAs are also touted as drivers of change that will help kick-start reform and contribute to good economic governance, helping ACP partners attract investment and boost their economic growth. One would think that, with such benefits, ACP countries would be champing at the bit to sign on the dotted line. However, the October 2014 deadline left many countries in a dilemma, causing tensions in various states. Some of their concerns have already been addressed very ably by my noble friend Lord Chidgey. Some felt that if they did not sign, they would lose their preferential market access for the few products that they did export to the EU. However, others felt that their longer-term prospects would be jeopardised if they signed the EPA. For them, the threats included significant tariff revenue losses, loss of policy space, threats to local industries, increased unemployment, serious disruption of existing or planned customs unions, and the displacement of existing regional trade and production capacities.

I thank the House of Lords Library staff for producing an excellent briefing for this debate. I found their inclusion of the Round Table article by Sir Ronald Sanders, The EU, Economic Partnership Agreements and Africa, very useful in giving me a perspective of EPAs from a recipient’s viewpoint. I will read part of the abstract because it is succinct and to the point. It says:

“Africa has been divided into four groups of states by the European Union in the negotiation of Economic Partnership Agreements (EPAs) that will define the relationship between Africa and Europe in the future. The EPAs are unfair. They demand reciprocity between the EU countries collectively and each African country individually”.

That last sentence makes a nonsense of the concept of reciprocity. Reciprocity can exist fairly only when practised between partners of equal stature. I borrow again from Sir Ronald’s article when he tells us that Aristotle, in his monumental work Nicomachean Ethics,

“propounded the doctrine that: as between unequals, equity requires not reciprocity but proportionality”.

It is patently clear that unless trade agreements between rich and poor countries recognise the fundamental principle of proportionality, they can never be deemed fair. The right reverend Prelate also made this point.

I returned from a visit to Sierra Leone this Monday, so naturally I was interested in the trade figures between the EU and the Economic Community of West African States. I was rather surprised at what I found, given that the EPA was signed in 2014. It showed a drop in EU imports from the west African states of 28% from €38.3 billion in 2013 to €27.4 billion in 2015. Over the same period, exports from the EU to the west African states dropped by just 4%. This represents a trade balance in favour of the west African states of €8 billion in 2013 being transformed to €1.6 billion in favour of the EU in 2015. Some of the reasons behind this trend may well have been touched on by the noble Lord, Lord Boateng. In my view, the EPAs are a cause for deep concern. Perhaps the Minister will take up my concerns with the Directorate-General for Trade.

In concluding, I will move away from EPAs and focus for a moment on the implications of Brexit for trade relations between Europe and Africa. Of course, we do not yet know what Brexit will mean in detail but it is important that the UK should prepare for the potential disruption of trade between the UK and Africa and at the same time actively seek to ensure that our trade policy towards Africa also promotes Africa’s development. This will be in our national interest but also in Africa’s interest. I note the challenges that the Brexit timetable is going to pose in reaching those trade agreements.

I commend the recent report of the expert panel, which included two members of this House, under the umbrella of the APPG on Trade Out of Poverty. The report looked at potential future UK support for the Africa Free Trade initiative and its recommendations will, I believe, not only promote economic growth in Africa but help to pull significant numbers of poor people, women in particular, out of poverty as they are able to trade and move freely across borders. This will make a real contribution to progress towards the sustainable development goals and the aspiration to leave no one behind. At the same time, of course, we will be helping to create a larger and more open market from which British companies can benefit.

We have traditionally played an important role within Europe in arguing for open and fair trading relationships with developing country partners. The implications of Brexit for trade relations between Europe and Africa are potentially serious. I hope that it is part of the Government’s plan for Brexit to actively seek opportunities to be even more open and support Africa’s own efforts to move towards a more sustainable future.