Trade Policies and Trade Agreements between ECOWAS and EU

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For EU, the contribution of agriculture to GDP consistently declined from 3 per cent in 2001 to 2 per cent in 2011. Similarly, share of industry in GDP declined to 26 per cent in 2011 from its value of 37 per cent in 2011. However, contribution of service to GDP increased from 56 in 72 per cent in 2011. Comparatively, although the contribution of agriculture to GDP declined in the two regions majorly in the last one decade, the magnitude of agricultural contribution to GDP in ECOWAS is several multiples of that of EU. As regards the industry, while its contribution to GDP was increasing in ECOWAS, it was declining in EU. However, the contributions of industry sector to GDP in the two regions are around 25 per cent. Service sector‘s contribution to GDP is far higher in EU compared to ECOWAS.

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for Lome IV). The first Lomé Convention (Lomé I), which came into force in April 1976, was designed to provide a new framework of cooperation between the then European Community (EC) and developing ACP countries, in particular former British, Dutch, Belgian and French colonies. It had two main aspects. First, it provided for most ACP agricultural and mineral exports to enter the EC free of duty. Preferential access based on a quota system was agreed for products, such as sugar and beef, in competition with EC agriculture. Second, the EC committed 3 billion Euro for aid and investment in the ACP countries.

The Main Characteristics of the Lome Convention are:

 The non-reciprocal preferences for most exports from ACP countries to EC

 Equality between partners, respect for sovereignty, mutual interests and interdependence

 The right of each state to determine its own policies

 Security of relations based on the achievements of the cooperation system.

The convention was renegotiated and renewed three times. Lomé II (January 1981 to February 1985) increased aid and investment expenditure to 5.5 billion Euro. Lomé III came into force in March 1985 (trade provisions) and May 1986 (aid), and expired in 1990; it increased commitments to ECU 8.5 billion. Lomé IV was signed in December 1989. Its trade provisions cover the ten years, 1990 to 1999. Aid and investment commitments for the first five years amounted to 12 billion Euro which lasted several years. The Lome IV had a review between 1994 -1995, in the context of major economic and political changes in ACP counties, in Europe and the international environment. The main amendments introduced are:

 The aspect for human rights, democrat principles and the rule of law become essential elements of the Convention.

 Phased programming is introduced, with the aim of increasing flexibility and improving performance of ACP countries.

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The Cotonou Agreement

The expiry of the Lome IV in the new millennium was the opportunity for deeper changes to ACP-EU cooperation. In spite of Lome‘s successes, ACP-EU cooperation could do better and needed to adapt to a different geostrategic situation after the demise of the East-West power bloc. The Cotonou Agreement is a treaty between the EU and the ACP countries. It was signed in June 2000 in Cotonou, by 78 ACP countries except Cuba and the then fifteen Member States of the EU. It entered into force in 2003 and is the most recent agreement in the history of ACP-EU Development Cooperation. The Cotonou Agreement is aimed at the reduction and eventual eradication of poverty while contributing to sustainable development and to the gradual integration of ACP countries into the world economy. The revised Cotonou Agreement is also concerned with the fight against impunity and promotion of criminal justice through the International Criminal Court. The Cotonou Agreement replaced the Lomé Convention which had been the basis for ACP-EU development cooperation since 1975. The Cotonou Agreement, however, is much broader in scope than any previous arrangement has ever been.

Economic Partnership Agreement (EPA)

On the expiration of the non-reciprocal agreement between the ACP countries and the EU, a reciprocal¹⁹ agreement called Economic Partnership Agreement (EPA) is being negotiated between the two parties. This negotiation has necessitated the conclusion of the arrangement to move ECOWAS into a common market. Therefore the issue of adopting and implementing a common external tariff (CET) in the ECOWAS becomes very important. With the adoption of CET, the tariff regime in African countries becomes further liberalized. EPA is a scheme to create a free trade area (FTA) between the European Commission of the EU and the ACP countries. They are a response to continuing criticism that the non-reciprocal and discriminating preferential trade agreements offered by the EU are incompatible with WTO rules.

19 The WTO has since declared non-reciprocal trade agreement between ECOWAS and EU as discriminating and so insist that trade between any two regions must be reciprocal. This then implies that the ECOWAS countries must allow EU imports on the same preferential terms that its own exports to the EU have enjoyed since the mid 1970s.

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The EPAs are a key element of the Cotonou Agreement, the latest agreement in the history of ACP-EU development cooperation and are supposed to take effect in 2008.

Due to the continuing WTO incompatibility of previous arrangements, the EPAs' key feature is reciprocity and their non-discriminatory nature. They involve the phased out removal of all trade preferences which have been established between the EU and ACP countries since 1975 as well as the progressive removal of trade barriers between the partners. In order to fulfill the criterion of being a non-discriminatory agreement, the EPAs are open to all developing countries, thereby effectively terminating the ACP group as the main development partner of the EU. The establishment of a reciprocal trade agreement confronts the EU with the problem of how to reconcile the special status of the ACP group with the EU‘s obligations to the WTO. The solution proposed for this dilemma is an agreement which is only as reciprocal as necessary to fulfill WTO criteria.