Free trade deals are back in vogue.
The European Commission plans to ‘diversify’ relations with its trading partners as it faces the reality of the Trump administration’s 25 percent tariff on its cars, steel and aluminium and 10 percent on all other goods.
That’s good news for the commission’s army of trade lawyers.
But while the EU executive hopes to start the ratification process on its deal with the South American Mercosur bloc, is fast-tracking talks with India, the United Arab Emirates and Indonesia, and hopes to join the Trans-Pacific Partnership, it’s so-called "equal partner" — the African continent — is nowhere in the queue.
Publicly, top EU officials continue to describe Africa as the "sister continent" and of a "partnership of equals".
“More than ever, we recognise the immense potential of strengthening trade and investment relations between the European Union and Africa. This partnership is not just a priority; it is an opportunity to build a future that is mutually beneficial for both continents,” European Commission trade spokesperson Olof Gill tells EUobserver.
"Through our network of Economic Partnership Agreements (EPAs) in sub-Saharan Africa and Association Agreements in north Africa we are working hand in hand to diversify trade, foster industrialisation across Africa, and attract foreign direct investment that can transform economies."
But in substance, EU-African trade relations have made little progress in almost two decades since the Economic Partnership Agreements pushed by then EU trade commissioner Peter Mandelson tried to open market access for EU and African exports.
“Agility has never been a strong suit of the EU-Africa relationship,” cautions Carlos Lopes, a former advisor to the African Union.
“The moment is ripe – but only if both sides drop their pretensions: Europe must stop projecting its model as universal, and Africa must stop negotiating from a position of vulnerability. Otherwise, the opportunity will pass, like others before,” adds Lopes.
The EU has a complex web of trade agreements with Africa. Most African states have tariff-free access to export to the EU under the ‘Everything but Arms’ agreement. The only regional EPA to have been fully-ratified and implemented is between the EU and the Southern African Development Community (SADC), a 16-member bloc which includes South Africa.
In north Africa, Morocco, Tunisia and Egypt have Association Agreements with the EU which are more ambitious than the EPAs in terms of investment and market access. However, they are now also linked to agreements on migration co-operation between the north African states and the EU Commission, as part of the EU’s bid to stem African migration via the Mediterranean Sea.
In 2019, the African Continental Free Trade Agreement was launched. It aims to create a single market and customs union but hefty barriers to intra-African trade remain and the continent’s trade policy has been shaped by a patchwork of regional economic blocs and their external deals. Intra-African trade has hovered between 15-18 percent of the continent's total trade.
A continent-to-continent agreement has been talked of as a long-term project by former commission president Jean-Claude Juncker. Because all member states in the EU and African Union would need to reach consensus, agreeing mandates, let alone brokering a deal at EU and AU level would be politically fraught. Neither is it an immediate EU priority.
The Samoa Agreement, a pact covering the trade and political relations between the EU and the 88 member states of the African, Caribbean and Pacific Community, which came into force last year, did not make any changes to existing trade arrangements.
While the EU appears to be in a holding pattern vis a vis African trade, the US is in retreat, leaving China to spy another opening.
Last Wednesday (11 June) China said it was “ready to” expand its zero‑tariff policy to cover 100 percent of tariff lines for all 53 African countries with diplomatic ties to Beijing — excluding Eswatini (former Swazilend). The offer builds on last September’s move to give the 33 countries in Africa classified as ‘least-developed’, zero-tariff treatment.
The trade offer was made alongside a 10-article declaration signed by China and African ministers urging the international community to prioritiwe Africa’s economic challenges, stressing that development aid “should be effectively increased, not unilaterally slashed,” and called for “true multilateralism.”
The Chinese offer replicates what the UShas offered to over 30 African states under the African Growth and Opportunity Act. Signed by the George W. Bush presidency in 2000, AGOA offers tariff and quota free trade.
Kenyan economist and former advisor to Uhuru Kenyatta government, Alexander Owino tells EUobserver that AGOA was “dead in the water” as a result of the Trump tariffs. Since AGOA and the Trump tariffs are contradictory, it may take a lawsuit to determine which takes precedence.
But AGOA will expire in September, and while there is still cross-party support in the US Congress for it to continue in some form, its provisions have been directly contradicted by president Donald Trump’s 10-percent duties which now land on African exports.
If the EU is unlikely to offer revised terms to basic trade, it is dangling some alternatives.
EU commission trade spokesperson, Olof Gill, tells EUobserver that there is “tremendous potential to diversify trade with Africa,”
These include lean Trade and Investment Partnerships (CTIP), the first of which was agreed in March between the EU and South Africa, which is aimed at move away Pretoria’s coal dependency to cleaner energy.
Gill describes the CTIPs as “a new kind of partnership, focused on investment and trade in clean energy, technology and raw materials.”
The EU commission says that the CTIP with South Africa could be worth up to €4.7bn in investment, with green hydrogen projects, one of the EU's new favourites, likely to be among the main beneficiaries.
“At the same time, they would support the EU’s green transition, while reducing our economic dependencies,” he adds.
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Benjamin Fox is a seasoned reporter and editor, previously working for fellow Brussels publication Euractiv. His reporting has also been published in the Guardian, the East African, Euractiv, Private Eye and Africa Confidential, among others. He heads up the AU-EU section at EUobserver, based in Nairobi, Kenya.
Benjamin Fox is a seasoned reporter and editor, previously working for fellow Brussels publication Euractiv. His reporting has also been published in the Guardian, the East African, Euractiv, Private Eye and Africa Confidential, among others. He heads up the AU-EU section at EUobserver, based in Nairobi, Kenya.