Nigeria yesterday signed a joint declaration on economic cooperation with the European Free Trade Association (EFTA) in Buenos Aires, Argentina.
The economic cooperation will allow Nigeria and Europe to work on a framework that facilitates increased trade and investment flows.
This is coming on the heels of opposition of the Economic Partnership Agreement (EPA) by Nigeria’s organised private sector which says that trade agreement with Europe could jeopardize the country’s economy.
However, Tuesday’s declaration, signed at the World Trade Organisation (WTO)’s 11th Ministerial Conference, is seen as a boon to Nigerian economy with the areas of cooperation being trade in goods, customs, tariffs and trade facilitation, trade in services, investment, protection of intellectual property rights including enforcement, and trade and sustainable development.
Other areas of cooperation include digital economy including ecommerce; trade and investment related issues pertaining to small and medium-sized enterprises, and any other areas of cooperation as mutually agreed by the parties involved.
Members of the EFTA are Norway, Liechtenstein, Iceland and Switzerland.
“We’re delighted to see the commitment of several countries on the issue of trade and investment. This is consistent with the government’s Ease of Doing Business agenda and will help Nigeria create sorely needed jobs as well as improve productivity. We reiterate that we are happy to work with other countries in a way and manner that is mutually beneficial,” said Okechukwu Enalamah, minister of industry, trade and investment.
Chiedu Osakwe, director general of the Nigerian Office for Trade Negotiations (NOTN) and Nigeria’s chief trade negotiator, said: “At this 11th WTO Ministerial Conference, Nigeria has re-established itself on economic and trade policy leadership globally. And this is coming on the heels of Nigeria’s drive in Niamey, Niger last week, to bring the negotiations for the establishment of the Continental Free Trade Area (CFTA) agreement closer to reality.”
The EPA has raised a lot of dust in Nigeria as the private sector, especially manufacturers, say that the country cannot compete with Europe owing to infrastructure and cost of production issues in the country.
“If we open our borders and allow all manner of goods to come in here, we will not be able to sell our products,” said Frank Udemba Jacobs, president of the Manufacturers Association of Nigeria (MAN).
“We are not saying that our country should be isolated from the rest of the world. But we do not have the level of technology Europe has now,” Jacobs said.
“In any part of the world, manufacturers are protected. China closed its borders for a long time. India did the same thing. Even the United Kingdom once closed its borders to textiles until the local fabrics makers grew. “We are not saying there shouldn’t be EPA but we need to get to a certain level of development before accepting the EPA,” he explained.
Jacobs, however, said manufacturers are now looking at alternative solutions to the EPA.
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.
A closer look at the EPA shows that 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.
For agricultural products or finished consumer goods currently produced in West Africa or for which the region plans to develop production capacity, West Africa will not reduce its import duties for Europe.
The EPA document shows that West Africa has excluded all the products which are considered most sensitive and currently face a 35 percent duty under the ECOWAS Common External Tariff (CET), such as meat (including poultry), yoghurt, eggs, processed meat, cocoa powder and chocolate, tomato paste and concentrate, soap and printed fabrics.
Other products excluded from liberalisation include fish and fish preparations, milk, butter and cheese, vegetables, flour, spirits, cement, paints, perfumes and cosmetics, stationery, textiles and apparel and fully built cars. West Africa accounts for more than 38 per cent of total trade between the EU and all African, Caribbean and Pacific (ACP) regions, according to the European Commission.
“Nigeria has little to lose, but a lot to gain, from the EPA,” said Olu Fasan, visiting fellow at the International Relations Department of the London School of Economics.
Despite opposition of the EPA by manufacturers and some sections of the business community, the Lagos Chamber of Commerce and Industry (LCCI) recently expressed a different position on EPA.
“For our brothers in the manufacturing sector, our emphasis should be on competitiveness. We cannot continue to rely on protectionism,” said Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry (LCCI), at a stakeholders’ meeting held in Lagos.
“This happened in the auto industry. People said they can manufacture cars and the government moved the import duty from 20 to 70 percent, but today, it’s impossible for Nigerians to buy cars. Where are the cars people say they manufacture? We need to identify our competitiveness and rely on it,” Yusuf said.
ODINAKA ANUDU
