Economic partnership agreements help to liberalize trade between Europe and Africa.
Trade negotiations that began in 2002 between the European Union and nations in Africa, the Pacific and the Caribbean led to the 2008 implementation of economic partnership agreements. The agreements, similar to other trade liberalization pacts such as the North American Free Trade Agreement, were designed to remove trade barriers and enable producers in Africa, the Pacific and the Caribbean greater access to European consumer markets, as well as foster economic development in these regions.
Identification
The European Union (EU) opened economic partnership agreements talks in 2002 with nations known collectively as the African, Caribbean and Pacific group (ACP). The ACP consists of six regions: the Caribbean, Central Africa, Southeastern Africa, the Pacific Islands, Western Africa and Southern Africa. Overall, these six regions include more than 70 nations.
Function
As outlined in an article from the European Commission, the economic partnership agreements aim to gradually eliminate tariffs and other obstacles to trade between the EU and the nations in the ACP. The commission further emphasized the agreements will help usher the ACP nations into the global economy by fostering sustainable economic development and easing their transition into modern world trade.
Significance
The economic partnership agreements between the EU and ACP represent part of a broader global trend toward eliminating most restrictions on trade, creating a global marketplace in which goods and services freely cross borders. The North American Free Trade Agreement (NAFTA) provides another example of this globalizing trend. In a 2008 paper that examined the impact of the economic partnership agreements on nations in sub-Saharan Africa, researchers at the University of Gottingen in Germany suggested the agreements will not only create free trade between the EU and ACP, but also boost economic development among the poorer nations in the ACP.
Effects
The Gottingen research team found the benefits of liberalized trade varied among African nations in the ACP. The study did not examine the effects of economic partnership agreements on Caribbean or Pacific Island nations. The researchers' analysis suggested that Botswana, Cameroon, Mozambique and Namibia benefited the most from liberalized trade under the agreements, while Ivory Coast, Tanzania, Ghana, Kenya and Uganda had few gains. The researchers concluded, however, that at least some of these nations had the potential to realize future benefits.
Expert Insight
Researchers at the University of Gottingen recommended nations exclude from the trade agreements any sectors of their economy that could suffer negative effects. The countries could cite the need to protect new industries from global competition or the importance of certain industries for government revenues as grounds for exclusion. Many nations often use these reasons to justify trade restrictions.
