The EU wants more trade with Africa, but is it ready for the consequences?

Oreoluwa Runsewe
20% Complete
 13-Sep-2018

Coming on the back of visits from British Prime Minister Theresa May, and German Chancellor Angela Merkel to some African countries last month, the European Commission president Jean-Claude Juncker says there should be a European Union(EU)-Africa free trade pact.

He said this while speaking in his final State of the European Union speech in Strasbourg, France. “I believe we should develop the numerous European-African trade agreements into a continent-to-continent free trade agreement, as an economic partnership between equals.” He said, alluding to discussions between African countries to create an African Continental Free Trade Area.

Many African countries signed a pact in March this year to a create a giant free trade area that analysts say can only be rivaled by the World Trade Centre. After the AfCFTA has been ratified by the parliaments of at least 22 African countries, it will create a market of more than 1 billion people and a GDP of $2.5 trillion.

Read more here: AFCFTA, The Road To Regional Integration

Juncker, who will be stepping down as EU Commission president next year, is hoping to take advantage of the new AfCFTA agreement. The EU, as a body, trades with regional nation blocs on the continent, such as ECOWAS, COMESA, EAC, SADC etc. The formation of the AfCFTA will allow it to trade with Africa as one entity, and the negotiation of fairer deals for each member country.

The charm offensive from British Prime Minister Theresa May last month would seem to make these new deal more attractive to the European Union. Britain’s exit from the Union, despite being one of the three influential countries in it with Germany and France, will be finalized in 2019. It also means the former colonial power is in search of new trade partners.

Read more here: Why Africa should be worried about British gifts

 

Britain already has the Commonwealth, its own post-colonial (though many would say its actually a neo-colonial) trade bloc, which gives it little advantage over the European Union. At least one Commonwealth country is in every regional bloc on the Continent, and the three largest economies namely Nigeria, Kenya, and South Africa are also commonwealth countries. It also means citizens from many of the former English colonies can travel to Britain, a policy that has continued after the end of colonialism.

 

And for many countries, negotiating with one country is probably easier than negotiating with a nation bloc. Following Britain’s referendum announcement in 2016, many Nigerian officials expressed their satisfaction with Brexit as it allows them to negotiate “with a single country (than negotiating trade deals with the EU),… so that is the immediate advantage in that and when it is a partner, historically (colonialism and commonwealth) because we have about 2 million Nigerians in diaspora so it is a big market for export and services both in ICT and financial sector.”

 

Ghanaian government officials also expressed the same sentiment after Brexit, saying they would prefer ‘one-on-one’ deals with the UK because it would favor their local businesses.

 

With the recent rise of the European far-right, many of which have been characterized with xenophobic and racist narratives against African immigrants, will closer trade relations between Europe and Africa not lead to an increase in migration from the African continent into Europe, and in direct conflict with far-right movements? The European Union could be faced with a backlash, like it is already facing now, from some of its citizens, and could lead to more of its member countries also withdrawing from the Union. Free trade agreements usually mean open borders, and many European countries are looking to close Europe off, rather than open it the more.

Read more here: Libya, Italy Reject EU’s New Plan For Migrants

 

The opposite is the case for the African Union; African countries need to open their borders to one another because the continent has to take advantage of intra-African trade. Intra-African trade in Africa was worth $150 million in 2015, with the potential to become $2.5 trillion through the AfCFTA. Hence, the African continent would likely trade with countries/blocs that will open its borders as it is also opening its borders, because, to be honest, the AfCFTA would mean Africa needs no compulsion to trade with anyone outside the continent.

 


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