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Trade between Europe and Africa: how to resuscitate an ailing deal


The Guardian

By Isabelle Ramdoo

Thursday, Feb. 28th, 2013

After 10 years of negotiations, how can policymakers on both sides revive a flagging relationship?

Trade negotiations between Europe and Africa seem to have stalled. Despite both sides last year celebrating the 10th anniversary of the start of negotiations over economic partnership agreements (EPAs), their attention now appears to have shifted elsewhere.

In crisis-ridden Europe, leaders are stressing the important contribution of trade to jobs and growth for economic recovery in Europe, as they did during the last European council in early February. They call for ambitious, proactive and constructive trade engagements with their “strategic partners”. But, interestingly, these partners are located on the other side of the Atlantic and in emerging Asian economies, as a letter by José Manuel Barroso, president of the European commission to Herman Van Rompuy, president of the council, highlights.

In his address to the commission, Barroso made no mention of Africa or the controversial EPAs, which haven’t been finalised by many, despite 10 long and difficult years of negotiations. And it’s no surprise why: the negotiations have been disappointing. Of the 77 African, Caribbean and Pacific countries negotiating with the EU, only 36 finalised an agreement, of which only 18 are in Africa.

Signals from Africa have not been much better: the continent is increasingly turning east and south, towards emerging markets, and is giving less attention to Europe. Although a few countries remained truly committed to an ambitious trade relationship with Europe, the lastAfrican Union summit, held in January, made no mention of EU-Africa trade. Instead, it focused on Africa’s own domestic economic dynamics, prioritising deeper regional economic integration and increased intra-Africa trade – a logical step and one which Europe itself has followed since the 1950s.

Given the political lethargy, the eurozone crisis that legitimises inward-facing economic politics and new dynamics in Africa, should we conclude that the trade relationship between Europe and Africa is dead? No. Despite all this, there are reasons and ways to resuscitate an ailing trade deal.

The reasons are that both regions remain important to each other: Europe is still the main trade, development and investment partner of most African countries. And despite its relatively low volume of trade with the EU, Africa is nevertheless a crucial source of hard and soft commodities for Europe, and in particular of strategic metals and minerals, essential for its high-tech and green-tech industries. Furthermore, the recent new discoveries of hydrocarbons are of crucial geo-strategic importance – they represent an important alternative, given the difficult political situation in the Middle East, notably with Iran. By keeping trade talks locked in the EPA debates, Europe might accentuate resentments in Africa and therefore miss out on the emerging opportunities. Continued game playing would clearly be counter-productive for both sides.

Develop a partnership of equals

What is needed is a more mature relationship, one that is based on understanding the changing dynamics of both partners and on a real partnership of equals. Europe and Africa have to be clear on their agenda, define their expectations and priorities according to agreed values, principles and interests. The shifting international balance of power places Africa in a better position to revive its partnerships to make them more effective – the challenge will be to translate the new vision into action.

On its side, Europe’s diminishing political clout in Africa implies that it needs to rethink its strategy to become a smarter partner and its engagement with developing countries in Asia or Latin America is proof that Europe can cut its coat according to its cloth. Relationships with Asia and Latin America are more business-like in nature and reflect the priorities and ambitions of each partner. The EU–Latin America and the Caribbean summit, held in January, focused on alliance for sustainable development to promote investment of social and environmental quality. In Asia, the focus is clearly on strategic economic partnerships, with specific relationships nurtured with ChinaIndiaJapan and South Korea.

Clear, consistent communications are key

Both partners have to learn to listen to each other and avoid mixed signals and conflicting incentives. Currently, Europe does not have a coherent agenda for Africa: it has different and multispeed approaches to North AfricaSouth Africa and the rest of sub-Saharan Africa. Even towards the last segment, it has different policies as the recent desire tofocus engagement on least developed countries underlines.

Appreciate regional differences

In addition, the limited success of the EPAs should teach policymakers that insisting on comprehensive trade agreements with countries that have different expectations simply does not work. Agreements should instead reflect the real interests and capacity of countries. Botswana is not Guinea. European wonks should be careful in their engagement with North Africa so that political conditionalities do not ultimately backfire on the EU’s relationship with the whole region.

Timing is everything

The moment for change is opportune. The African Union has a new chairperson who has taken up the challenge to lift the continent into a new prosperous era. Beyond gathering her troops to deliver the “African renaissance”, Nkosazana Dlamini-Zuma will have to reboot the collaboration with international partners. The challenge for her will be to balance Africa’s geo-strategic interests to get the most of all partners. For Europe, the challenge will be to plug into the new dynamics and remain relevant. But both sides need to think of a revived partnership that goes beyond trade and effectively support Africa’s structural transformation. It is the harder ask but one that will lead to the most sustainable mutual gains, and is something worth considering at theupcoming EU-Africa Summit, scheduled for the first half of 2014.

Isabelle Ramdoo is the trade and economic governance policy officer at the European Centre for Development Policy Management (ECDPM). Follow her on Twitter: @ir_ramdoo

This content is brought to you by Guardian Professional.

Huge gas discovery off Mozambique


 

News24.com

Johannesburg – Italian oil company Eni SpA has announced the discovery of more natural gas off the coast of Mozambique, expanding the yield of a major field off the southeast African nation.

Eni said on Wednesday that the field includes at least 10 trillion cubic feet of natural gas, increasing the total yield of the area to 70 trillion cubic feet.

The company said the drill site is 60km off the Capo Delgado coast. Eni has a 70% interest in the field, with Portuguese firm GalpEnergia, South Korea’s KOGAS and ENH each having a 10% stake.

Natural gas exploration has increased in recent years in Africa, long a source for crude oil. Recent discoveries in Mozambique have made it a major regional source of liquefied natural gas.

AP

 

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