FG, Mkapa, MAN reject Economic Partnership Agreement

There was a vehement resistance of the European Union’s Economic Partnership Agreement (EPA) at the just concluded 46th annual general meeting held by the Manufacturers Association of Nigeria (MAN) as the Federal Government, manufacturers and Benjamin William Mkapa, former president of the United Republic of Tanzania, criticised the agreement as one that can destroy Nigeria’s industrial sector.
“Nigeria has clearly indicated that it is not happy with the EPA. Unless we have the EPA that is favourable to us, unless we have an EPA that will not endanger our businesses, we will not be signing it,” Zainab Ahmed, minister of state for budget and planning, who represented Nigeria’s president Muhammadu Buhari at the event, said.
The EPA is a free trade agreement between the 15 countries of the Economic Community of West African States (ECOWAS) and the Europe, seeking to enable West African countries access the European market and vice versa, without paying tariffs. Europe is committing 6.5 billion euros every five years beginning from 2015 to 2019, including during the 20-year transition period that will end in 2035.
The EU will open its market completely from day one, while West Africa will remove import tariffs partially over a 20-year transition period once the deal is ratified.
According to Nkapa, the EPA is antithetical to the aspirations of African countries towards becoming industrialised and adding value to their natural resources.
Nkapa said it would be wrong, as stipulated by the agreement, to ask African countries to export their raw products without taxation, stressing that this would deprive them of opportunity to add value to them.
It was also wrong for Europe to ask African countries not to tax their finished products as doing this would deprive governments of the continent of their revenue.
“EPAs will put your regional trade and integration at risk. You will find that most of the products that you are producing locally are in fact traded regionally in ECOWAS. If you acquiesce to the EPA and its corollary liberalisation, EU competitiveness will certainly jeopardise you regional trade. EU products are likely to flood your market and displace domestic and regional production,” he warned.
“EPAs also oblige your governments to undertake significant reforms and design and create new policies which will have significant costs attached, including adjustment costs and revenue loss as a consequence of tariff elimination. In our region, the EU has vehemently refused to include a Development Matrix in EPA,” he stated.
“Instead, it created the burden of third, which is the elimination of tariffs that will also have an adverse impact on state revenues. In the case of my country Tanzania, for example, a modest estimate on current trade figures is that tariff losses could be up to $62 million a year. As for export taxes, against the strident objections by many African countries, the EU continues to insist on their being eliminated. I find it logical to view this insistence in tandem with the EU’s Raw Material Initiative launched in 2008. This initiative states unequivocally that ‘access to primary and secondary raw materials is a priority in EU Trade and regulatory policy.’ Yet it is a known fact that export tax is a sine qua non of the promotion of higher value added activities and the beginnings of industrialisation,” he dosclosed.
“We were told that in order to continue to have access to European markets, Africa is required to eliminate tariffs on over 80 percent of imports from the EU. In some cases, they will have to abolish all export duties and taxes; in others, countries can retain existing export taxes but not increase them or introduce new taxes. They will be called upon to eliminate all quantitative restrictions and meet all kinds of other intrusive and destructive conditionalities that literally tie the hands of African governments from deploying the same kinds of instruments that all countries that have industrialised applied to build competitive national economies.,” he said.
He concluded that signing the EPA was an invitation to commit economic suicide, stressing that the key principle underlying them was the market access based on reciprocity.
Similarly, MAN rejected EPA completely, saying it would kill local industries and turn Nigeria into a dumping ground, as domestic firms could not compete with Europe.
“MAN has made its position clear on the need to reject the above proposal and we appreciate the Federal Government for agreeing with our position. We appeal that the government will maintain its stand because of the anticipated destructive impact of the EPA on the Nigerian economy,” Frank Jacobs, president of MAN, said in his address.
The group said the proposed admission of Morocco into ECOWAS was equivalent to signing the EPA through the back door, urging the government to vehemently oppose the move as it would spell doom to the productive sector of the economy.

ODINAKA ANUDU