On 20th October, EU Trade Commissioner Cecilia Malmström co-hosted a high-level roundtable in Brussels, entitled ’Putting Partnership into Practice.’ At the event, participants looked at the current trade and development relationship between the EU and the 79 countries that make up the group of African, Caribbean and Pacific (ACP) countries. They also considered how to build on it so it delivers even more in future.
Ms Malmström‘s other hosts were her fellow EU Commissioner Neven Mimica, the trade ministers of Jamaica Kamina Johnson Smith and of Madagascar Chabani Nourdine, and vice-president Pim Van Ballekom of the European Investment Bank.
The event also brought together businesspeople and representatives of civil society from ACP countries and the EU. It included a discussion with a panel that included the deputy executive director of Caribbean Export, the region’s export promotion agency, the director of a textiles manufacturing firm in Madagascar, an exporter of processed fish from Papua New Guinea, and the international relations adviser of BusinessEurope, a lobby group. The panel was moderated by Dr. James Zhan, UNCTAD Senior Director for Investment and Enterprise.
Participants considered EU policy tools such as:
- Economic Partnership Agreements between the EU and ACP regions
- the External Investment Plan (EIP) for Africa, and
- trade-related development programmes.
They looked at how these tools are working at the moment to help ACP countries attract more investment, industrialise, integrate into global value chains, and create jobs in the process. And they discussed lessons that could be drawn about what more the EU and ACP countries could do to facilitate trade and investment.
EPA benefits already yielding success stories
EPAs offer ACP producers fully free access to the EU market – even if part of their production takes place outside the country they’re exporting from. And the agreements are already generating some notable success stories. One example is Madagascar: in 2012 a trade agreement between the EU and Eastern and Southern Africa came into force. By 2016 exports from Madagascar to the EU had gone up by 65%.
Another such example is South Africa. In 2016 an economic partnership agreement between the EU and Southern Africa (SADC) started. South Africa’s exports of processed fish have since risen by 16%, and flowers by 20%. And in Papua New Guinea, the EPA has helped to attract investment in the country’s fisheries industry, creating tens of thousands of jobs, especially for women.]
Remaining challenges: from attracting investment to ensuring sustainability
In her remarks, the Commissioner identified some of the challenges that EU-ACP trade policy still needs to grapple with. One is around investment: “People I meet from ACP countries tell me, ‘ACP economies need to diversify and move up the value chain.’ To do so, they need investment.” But she insisted that it needs to be the right kind: “I have often spoken about the need for development, growth and investment to be sustainable. ACP countries have had their share of footloose investment and its social consequences.”
The Commissioner added that “from my point of view, EU development cooperation remains important. And today the EU is also looking at new forms of financing that can directly address the capacity shortages and the lack of access to capital that small and medium-sized enterprises face.” She also reiterated that EU trade and development policies should work together: “We need to mobilise all our tools to improve the conditions for investment and job creation.”
Another challenge is around domestic ACP policies. The Commissioner argued that “trade and development finance can only work if our ACP partners adopt the right domestic and regional policies.”
She finished by identifying a further challenge concerning EPA implementation. “I wish to insist on dialogue as a precious tool that we have…Civil society must help monitor the way we put EPAs into practice,” she said. “They know people and places that we don’t know – and how our policies affect them.”
Increasing businesses’ awareness of the EPAs’ benefits
Escipion Oliveira is Deputy Executive Director of Caribbean Export, the region’s export promotion agency. He said that the private sector often lacks an understanding of trade agreements. To this end, the Agency’s is focusing on tools to simplify the EPA so exporters can readily interpret and use it, and workshops to provide actionable information on the agreement.
He also pointed to successes in the region already. These have included: growth in the membership of Caribbean Association of Investment Promotion Agencies (CAIPA), which Caribbean Export manages, from 7 national IPAs in 2007 to 23 in 2017; the development of a Regional Investment Promotion Strategy in 2015 under the 10th European Development Fund; and a programme to help women in particular to capitalise on the EPA.
Carrying out reforms in ACP countries
Another speaker was Sofia Bournou, international relations adviser at BusinessEurope, which represents a wide range of EU industries. She said that “ACP countries are currently becoming a very attractive destination for European companies.”
But she added that in the trade and development field “there needs to be more complementarity between EU policies and tools.” And she pointed to various other measures that governments could undertake to encourage foreign investment: “regulatory reforms, including on competition, public procurement and services; infrastructure, including digital; social security systems; and the promotion of good governance and the rule of law, including the involvement of a vibrant civil society in decision-making.”
Moving up the value chain
Olivier Cua is a director at Epsilon, a textiles manufacturing firm based in Madagascar. Speaking at the roundtable, he said, “Thanks to the evolution of the partnership agreements with Europe, the Malagasy textile industry could import raw materials from all over the world, transform them into clothing and re-export them to Europe duty- and quota-free.” All this allowed Madagascar to diversify its product range, and its know-how, he added. “It meant we could guarantee our European customers a compelling proposition for the medium and long term, which is important in business.”
Seizing the opportunities
The last speaker, Albert Carabain from the RD Fishing in Papua New Guinea, stressed the benefits of the EPA which are best felt by the tuna fishing industry, with the EU as the major market destination for processed tuna products. “Challenges remain however” according to Carabain, “since the current existing processing plants struggle to make profit”. Opportunities need to be seized : “The tuna industry is a major economic performer providing substantial revenue and economic benefit” to the country. Thus government needs to invest in specific and well-targeted infrastructure support and logistical needs of the industry.
— Source: http://trade.ec.europa.eu/