Manufacturers reject partnership with Europe

Nigerian manufacturers have again rejected the Economic Partnership Agreement with Europe, describing it as an unequal partnership. Economic Partnership Agreements are trade and development agreements negotiated between the European Union and African, Caribbean and Pacific regions engaged in regional economic integration process. The goals of EPAs are to promote economic growth and development, reduce poverty in partner countries, expand and diversify trade and increase domestic and foreign investment. In an updated overview of the EPA negotiations, the European Commission on its trade portal stated that West Africa-European Union negotiations of an Economic Partnership Agreement were closed by Chief Negotiators on February 6, 2014 in Brussels. According to the commission, the signature process is ongoing and after signature, the agreement will be submitted to the parties for ratification. Nigerian manufacturers have, however, been opposing the signing of the agreement, saying the nature of the agreements calls for caution on their part. While presenting a paper at the Africa Today’s International Conference on Economic Partnership held recently in Abuja, the President of the Manufacturers Association of Nigeria, Mr. Frank Jacobs, stated that the process, structure and perceived contents of the EPA negotiations raised serious concerns about the impact the EPA would have on ACP countries and their efforts towards poverty eradication, regional integration and economic growth. He said, “Whether EPA contributes to or detracts from the sustainable development of the ACP region, it is undeniable that their impact will be significant. “The EU is the ACP’s largest trading partner: nearly 40 per cent of all ACP exports go to the EU. The outcome of EPA will affect 39 of the world’s 50 least developed countries and the lives of over 720 million people who live in the ACP region. ‘It is therefore crucial that greater attention is paid to the development implications of this agreement. ‘It will be interesting to look at how EPA will affect Nigeria, especially the manufacturing sector.” The European Commission had stated that in order to help the ACP countries integrate into the world economy and share in the opportunities offered by globalisation, exports from ACP were given generous access to the European market for well over 30 years. It noted that the preferential access however failed to boost local economies and stimulate growth in ACP countries. And the proportion of EU imports from ACP countries dropped from seven to three per cent. Jacobs said although the agreement was such that allowed for free trade and lower duties between the EU and ACP countries, Nigeria had very limited capability to produce and export industrial goods. He said, “Most of the industries in the country are undeveloped and are plagued by lack of supportive infrastructure. ‘The production plans of industry players are constantly distorted by the interplay of macroeconomic variables such as inflation, exchange rate and interest rate variations. “EPA, therefore, may appear good in the document proposal but may be catastrophic if implemented, as it will stifle the slowly recovering manufacturing sector in the country. “This will therefore lead to untold hardship in the country as the unemployment situation and the standard of living of the people will worsen.” He argued that the agreement would confine the Nigerian economy to a mere market extension of the European Union since Nigeria cannot compete with Europe on all fronts. He said, “It is on this basis that we believe that Nigeria does not need EPA now until it has been adequately industrialised and been able to trade industrial goods competitively. “Moreover, after 30 years of preferential market access, the ACP countries still export just a few basic commodities to the EU as the ACP share of the EU market is steadily declining. “The existing trade preferences have not had the intended effect of helping the ACP countries diversify their economies into higher value products. “Today, the ACP countries attract only a small portion of the world’s foreign direct Investment.” Among the ACP countries who have signed the agreement are Cameroun, Mauritius, Seychelles, Zimbabwe, Madagascar, South Africa and the Caribbean. A foreign policy analyst and former Vice Chancellor of the University of Ado-Ekiti, Professor Akin Oyebode, recently stressed the need for Nigeria to strengthen her industrial production base in order to be able to play an important role in the global economic scene.