West Africa finally Adopts a 5th Tariff Band on the CET

West Africa finally Adopts a 5th Tariff Band on the CET

The just concluded meeting of the West African Ministers of Trade and Finance (Ministerial Monitoring Committee – MMC) held in Banjul – The Gambia, has finally resolved that the 5th tariff band request made by Nigeria on the ECOWAS Common External Tariff (CET) is after all a great vision for the countries in West Africa. Rising from their meeting, the Ministers adopted a highest tariff of 35% which is a step farther away from the UEMOA four bands of 0%, 5%, 10%, and 20%.

It would be recalled that the issue of the ECOWAS CET has for long remained a widening controversy among the poor countries, with series of concerted debates on the viability or otherwise of a 5th band of 50%. Despite all negotiations and entreaties, some countries were reluctant on moving the tariff band from 20%. Understandably however, the bound tariff commitments of some of the West African countries at the WTO has remained an albatross, a justifiable impediment that beclouded many to take a shot at an upper protective tariff band for their economies.

The Ministers had during the Nouakchott – Mauritania Ministerial meeting engaged in a heated argument on the acceptability, viability and possibility of a 5th band as well as its implications on the economies of member states of the region. In the end, they had decided that a study be conducted with well targeted Terms of Reference investigating the above controversies. ECOWAS and UEMOA Commissions conducted a study in collaboration with the United States Agency for International Development (USAID). In parallel however, the Federal government of Nigeria through the Technical Committee on EPA in collaboration with the DFID also conducted another study using the ECOWAS study, the ROPPA/Oxfam study and NANTS study as analytical references. Eventually, the result of both studies indicated that the existing tariff bands were not protective of the economy of West Africa. In addition, both studies also confirmed the possibility of re-negotiation of the extant bound tariffs at the WTO. Further more, the importance of ensuring coherence between the CET, the Sensitive products selected by the region and the Rules of Origin for the EPA negotiations was also stressed as a pre-requisite for pro-development EPA outcome.

The Memorandum presented to the Ministers illustrated the main results of the ECOWAS study and proposed options to include;
i. the creation of a fifth band
ii. additional protective measure compatible with WTO
iii. reclassification of a number of products in category ‘0’, and
iv. the need to put in place protective measures on drugs and their inputs

Prior to the Ministers’ resolution, the experts had argued that the MMC lacked the statutory powers to decide on the CET since the Joint ECOWAS-UEMOA Commission on CET set up for that purpose is yet to comment thereupon. The experts therefore issued a somewhat watered down conclusion recommending “that the two Commissions accelerate the validation process by the Joint Management Committee and requested that the report be forwarded to member states before the next meeting of the Committee” However, the Nigerian delegation had insisted that although the Joint Committee was established by the Authority of Heads of States on the matter, the same Authority had established the MMC which comprises of Ministers and is deemed superior to any other creation given that they are responsible for the overall negotiation of the EPA to which CET is just a component.

Ironically, experts had also noted that regional integration cannot be disconnected from CET policy. They have also asserted that most local traders still currently experience tariffs within the ECOWAS borders and double taxation as goods move through the region. The argument that with imperfect integration, any fifth band with higher tariff levels will have dangerous effects to wit; regional trade harmed by increased taxation and firms not benefiting from the infant industries protection effects since the access to the regional market will be limited, and they will not be able to expand their production to reach the efficient scale of production.

The fifth band, the Experts insisted should therefore answer precise needs and target clearly identified economic policy goals, otherwise, it will tempt agricultural and industrial lobbies to obtain high tariffs for their products, even though they were not originally slated for any tariff above 20% in the previous ECOWAS negotiations (with the exception of Nigeria).

More so, the establishment of a fifth band should be driven by the desire to provide additional protection for economic activities and their operators on a regional basis, answering regional needs and fitting regional development goals. Any implementation of the fifth band based on an infant industries argument should be backed by policy initiatives that will support growth of private enterprise in those sectors, such as policies facilitating access to capital markets, infrastructure or energy supplies. Otherwise, tariffs will simply mask the source of the lack of competitiveness and delay private sector efforts to champion policy reform and investment.

But in a swift closure of the subject matter, the Ministers had recalled that the issue was a subject of discussion and debate at the Nouakchott Ministerial, and had as a matter of fact, apart from delaying the EPA negotiations, hindered and the trade and regional integration efforts of the West African states. Relying on the fact that that the Nouakchott Ministerial had essentially concluded that the CET should be resolved at the next Ministerial (Banjul), the Ministers therefore insisted on specific decision for their conclusions. With the explanations given by the ECOWAS Trade Commissioner and the President, revealing that the study justified the need for the creation of a fifth band and that such band should be placed at 35%, the Ministers found a soft and peaceful landing on subject matter. The classification of products under the various categories shall be worked out by the Joint Commission.

It would be recalled that Nigeria had, a couple of weeks ago, based on the advice of her Technical Committee on EPA announced a descent of her 5th band proposal from 50% to 35% with the aim of facilitating a speedy resolution of the ECOWAS CET quagmire and facilitating regional integration.

Ken UKAOHA, Esq. President (NANTS)

The Changing Face of EU’s Trade Engagement?

The mixed reactions generated by the appointment of Baroness Ashton as the new Commissioner representing the United Kingdom in the European Commission is yet down. Some people have expressed reservations as to her background and experience on Trade especially given the complex nature of international trade. Whatever might have informed the choice of her appointment by the Gordon Brown’s government, the fact is that, it is not yet uhuru for the Commissioner designate as she has a number of hurdles to cross towards her eventual confirmation as the Commissioner for Trade. She faced one of the hurdles which came in form of a grilling by the European Union’s Parliamentary Committee on International Trade on the 20th of October. It is the responsibility of the Committee to recommend her endorsement or otherwise to the conference of Presidents, and eventually to the plenary at Strasbourg.

As we have noted in an earlier article, the question of who occupies the position of the EU Trade Commissioner is of great importance in the global trade circles, but more so, to the developing countries of the Africa, Caribbean and Pacific (ACP) group of countries with whom the EU are currently engaged in a somewhat controversial trade negotiations in the name of Economic Partnership Agreements. The trade Commissioner as the Chief Negotiator has a lot of influence to wield in directing the course (and even the content) of the negotiations. This has been so well played out under the immediate past Commissioner, Peter Mandelson, whose disposition towards the negotiation process and the content of the EPA raised and still raises serious concerns among different interest groups both in the North and the South. The question now is what do we expect if the Baroness is eventually endorsed?

The first important question to the ACPs who are sincerely sceptical and confused about the future of their relationship with their erstwhile colonial master is, ‘who is Baroness Ashton?’ A quick check on her background reveals that she trained as an economist and has served in the British government in the following capacities at different times: Parliamentary Under-Secretary of State in the Department for Education and Skills; Parliamentary Under-Secretary in the Department for Constitutional Affairs; and Parliamentary Under-Secretary of State at the Ministry of Justice dealing with human rights, equality and justice issues. She was until now a Labour member in the UK House of Lords, the Leader of the House of Lords and Lord President of the Council in Gordon Brown\'s cabinet since June 2007. As leader of the House of Lords, Ashton was a key figure in securing the parliamentary passage of the Lisbon Reform Treaty through the upper house of the British Parliament.

Whether this background qualifies her for the job is another issue but we are particularly interested in the issues she raised and her responses to the questions thrown to her during her maiden appearance before the Parliamentary Committee on International Trade, which took place just a couple of days ago.

On trade generally, and what should inform EU’s overall trade engagement, Baronnes Ashton expressed the view that open trade should not be measured just in macroeconomic terms of growth, jobs, efficiency, stronger economies, but that it is also “about individual people, livelihoods and communities”. Continuing, she emphasised that trade is indeed an engine of economic change which cannot be taken in isolation, hence “[W]hatever the end result of economic change, no matter how great the overall benefits for our societies, we have a responsibility to the people whose lives are changed in the process. That is why Europe’s social models matter more than ever in a world of rapid economic change”

On this particular comment, it is indeed believed that Baroness reference to ‘individuals’ includes those from the ACP. It is therefore wonderful and interesting to hear an EU Trade Commissioner talking about individuals, yes, the sun beaten, hungry and famished individuals whose faces of African origin are regularly seen on the news screens of the CNN and the BBCs of this world; yes, the crinkled faces that have been afflicted by trade injustice and lopsided rules; and yes, the faces that have remained the hewers of wood and fetchers of water that are raw materials for the fattening industries of the West.

On the link between trade and development, Baroness also asserted that: “I do not see trade as just the contents of shipping containers. I see it as creating the conditions by which investment, skills, experience and opportunity can spread around the world and into the places where they are often needed most. I think there is a role for trade in helping us meet the Millennium Development Goals and tackle climate change. The point is that trade and open markets are a means to an end, never an end in themselves. We should not allow our trade policy to produce social or environmental results here in Europe, or anywhere else, that are counter to our wider policy goals. The end of trade policy is not trade for trade’s sake: it is a more prosperous, stable and equitable world”.

The new Commissioner designate seems to have a lot of confidence in open trade on the global level and is a keen supporter of multilateral action under the WTO and the advantaged position of Europe in it. She refuses to tow what she describes as “[P]essimistic assessment of Europe’s potential in global economy which says we are running out of ways to compete with other countries like China”. According to her presentation, Baroness Ashton appears committed to promoting the ideals of open trade at the global level in spite of the current market failures, because to do otherwise according to her would amount to retreating into economic isolation which is a more costly alternative. But how far and how much can Europe delve into the global arena especially in view of the disparity between her and China in terms of manufacturing? What kind of policies are available for Europe to apply in order to meet up with the gap that has already been unwittingly created by the exodus of European manufacturing outfits to South Asia in search of cheap labour and the satisfaction of the developing world with cheaper products that meet the demand of the purchasing power and social status of the world’s poor? This is absolutely where the Commissioner designate has some hard nuts to crack.

Still on multilateral trade the Commissioner designate emphasised that “…fair trade means trade that helps build European prosperity without making other countries worse off – and which actively helps lift people out of poverty wherever it can. I believe that everybody has the right to trade their way out of poverty and that no part of our trade policy should prevent them doing that. Our trade policy should respect comparative advantage and fair competition. But it should never reward disregard for internationally accepted labour and social standards”.

It is obvious from the foregoing that the Commissioner designate recognises the need to balance trade with development needs and aspiration of the people especially in allowing enough policy space for other countries to determine the course of their national development. Secondly and essentially, Baroness has again through this statement expressed the required commitment that Europe has towards poor countries at ensuring that they are not further emasculated through European trade and agricultural policies that engender growth and not actuate trade lopsidedness and aggravate poverty. A commitment that brings hope to the poor that any trade engagement with Europe would not be targeted at one side milking the other or totally to be dependent on the other through aid in order to lift her out of poverty.

In driving home her point, she said: “…I do not think there is a single model for trade liberalisation that works everywhere and at all times. There are only tailored solutions to the specific needs and the potential strengths of different countries”. Relating this position to the Economic Partnership Agreements (EPA), she said: “I want to listen to and learn from our ACP partners how best to take forward final agreements”. It is quite interesting to see a Commissioner committed to having a listening ear to the cries, the needs and aspirations of the ACP particularly on the EPA. Every one likes to be listened to, and every relationship can be cemented with the commitment to listen. But more than this, Baroness like a mother she is, can go a step further by acting on the needs like a mother who has patiently listened to her children.

But beyond the commitment to listen, for those of us in the Africa, Caribbean and Pacific group of states, the most serious concern at the moment in our trade relationship with the EU is undoubtedly the EPA. Many Africans would want to know, what would be the approach of the new Commissioner to the concluded agreements (for CARICOM), the initialled interim agreements and the ‘no- agreement’ situations? Granted that she has a bureaucracy under her that determines the bulk of technical designs, but the final decision and general tenor and rhythm of the negotiations lie on her table.

For us in NANTS, we do not think that we need to belabour the argument from this side on the need for global trade, whether at the level of the WTO or Free Trade Agreements, to have a development face. This is in recognition of the limited role of the market in allocating resources equitably. The asymmetries are real and we do not therefore intend to start philosophising on how it came about, but suffice it to say that mainstreaming development considerations in trade relations is not really a matter of ‘help’ but a matter of collective responsibility for collective survival - enlightened self interest- if there is anything like that. In fact, the proposition should be the other way round; development should be the end and trade the means. We think this much is reflected in the new Commissioner’s presentation.

Permit us again, to use the allegory of unskilled workers in the labour market. An employer has a choice to ignore them for as long as he has those possessing the skills he needs. If for any reason, the employer fails to secure the services of the skilled workers, he may be forced to make do with the unskilled ones and he would either let the men work how best they know or decide to give them a crash training programme. In either case, he would get exactly the value of his effort – no/bad job for no/bad skill and crash job for crash skill.’ Now imagine what would have been the situation if the employer had paid more attention to understanding why the workers were not skilled in the first place and partnering with them to develop their skills – which have, of course always been there, latent? It becomes a win-win situation – the employer has his job well done and the employers have their livelihood improved. None of the two can do without the other, and that is the beauty of the commitment to listen.

The questions that followed her presentations threw up more interesting issues and help us put our fingers more concretely on her orientation on specific issues. Answering a question on the challenge of choosing to deal with a regional configuration or dealing on a bilateral basis, with particular reference to EU’s trade negotiation with Latin America, the Commissioner designate expressed the view that: “I think where nations have chosen to come together as a region and have either invited the European Union to trade or to open negotiations to trade, we need to look carefully and respect their desire to work as a group of countries. That can create difficulties in terms of developing a strategy that will bring the greatest benefits to them and to us, but that is always my preference as a starting point, where it is clear that those countries have wanted that and where we can see the economic benefits”.

Baroness however, added that the circumstances may demand that bilateral approach may be more pragmatic in achieving a good agreement for the parties concerned while allowing other nations in the regional arrangement to latch up eventually. This addition to us sounds like the approach used by the EU in navigating their way through the ACP configuration and even through the regional blocs like ECOWAS where Ghana and Cote d’Ivoire were made to break the ranks and initial an interim EPA. This expression appears to have highlighted the voice of Jacob (Mandelson?) rather than the tone of the in coming queen of trade justice, and some sort of explanation could be required.

In as much as we do not dispute the fact that individual national interests may differ even in a regional configuration - just like we saw in the ECOWAS region at the heat of the deadline, we believe that the approach should be to promote regional integration especially where the benefits to the region as a whole is obvious and alternative measures can remedy whatever losses would arise from a no-agreement. This is more pertinent where the difficulty arising out a no-agreement situation can be otherwise remedied. The challenge in this situation is the question as to, who defines the most beneficial course of action - the EU, the Region or Individual nations?

Bringing this to the ECOWAS scenario, the stakes indeed were very high for Ghana and Cote d’Ivoire in the event of a no-agreement situation. But it is equally true that there were alternative steps the EU could have taken to remedy the situation other than breaking the rank of the regional bloc and in fact making the two countries to violate the mandate they gave to the ECOWAS Commission in a way of surrendering part of their sovereignty to the region for the EPA negotiations. We dare not say our judgement of this scenario is the most pragmatic, but the point is that it takes good faith to know the right place to abandon a regional or group arrangement where the constituents have so purposed and pursue agreements with constituents individually. It would be better for the constituents to decide not to move as one any longer because of irreconcilable differences (not externally induced). If the decision comes from the other party, it may raise some questions of good faith. We may perhaps leave this judgment for Baroness’ consideration.
Now, responding to a question on the appropriateness of including the ‘Singapore issues’ in the EPA against the wish of some of the ACP countries, Baroness Ashton stated that; “It must be for individual states and nations to determine their own regulatory approach. It is not for us to impose. Having said that, there will be lessons that we have learnt, and will learn, from what has happened here that could be of value to other nations, and there may well be expertise that they wish to harness, but it must be for them to determine the system of regulation that they would wish to have”. In an earlier comment on public procurement, she had said that: “I think there are real opportunities there for us. We have to make sure there is reciprocity; we have to make sure that we take up those initiatives properly. It is not about persuading companies (sic) that want to look at how they run their own services to have to open their markets – that is for them. However, where there are opportunities – in engineering and in other services that we can provide – then we should look to that, not least as a way of potentially raising standards for populations’ right across the world”.

Still on ‘Singapore issues’, she expressed the view that some gains could accrue to the ACP countries by the inclusion of these issues and concluded that “… if handled properly, one can look at procurement from a developmental prospective. The challenge as we move from interim to full agreements is to enable us to work closely with those countries, for them to decide with us what they would wish to see included, and for the opportunities to be clear for them to hopefully take up, or in the end decide they do not wish to. That will be the approach I will take as we move from interim to full agreements”.

A question came specifically on the inclusion of services in the EPAs, hear her position: “The question is how we do it. The issues that colleagues have raised around the move beyond goods into services on EPAs are very important, as is making sure that those countries with which we are working know what it is they are doing, know the benefits and are able to diversify and grow their own base as well, and that we can help them do that”.

On the diminishing value of EU aid level despite all pledges, as one member described it, the new Commissioner’s response seem to show her understanding of aid as a means of facilitating national economic independence and integration into global trade. She acknowledged that “...in times of economic downturn as this, the propensity of nations to support others through aid will be challenged and questioned”. Continuing she said: “Therefore, it is important too that we develop our own way of supporting those nations to grow their economic capacity, to stand free and stand tall in the world, and be able to address their own concerns, whether education, poverty, health, themselves with our support. That must be our objective and especially now”.

What we see here is her proposal on aid delivery/effectiveness. We have always argued that trade is better than aid in terms of achieving development objectives. The role of aid is important only to the extent that it is crafted towards lifting the recipient out of a position of dependence. Much criticism has been made about the failure of aid to deliver tangible benefits in the recipient countries and some of the reasons are traced back to the conception and implementation of the initiative form the donor country. It yet remains to be seen whether the new Commissioner designate intends to bring some radical transformation in administering aid for trade measures both in EU’s bilateral and multilateral engagements.

Responding to a question on what would be her approach to the EPAs, with emphasis on the interim agreements; she stated that she intends to move them forward adding that: “It is important to review and keep looking at how these agreements are working. It is important with the interim agreements that, as we move to full agreements, we take the opportunity – if they so wish and we so wish – to look back and reflect on where we have come from”. This sounds like a commitment to renegotiate the interim agreements, where the occasions call for it? She actually made an outright commitment in this regard elsewhere in her responses. She said: “With the interim agreements that have been signed, I do not want to go over the past but, as we move from interim to full agreements, it may be that there are aspects of the interim agreement that we – or they – would wish to re examine because we are moving to a full agreement. I am of course committed to doing that. It would be a good, sensible approach to dealing with the policy”.

Commenting on the Caribbean EPA, she described as “very important” to her the review clause built into the agreement as a result of Guyana’s insistence and expressed her further commitment to keep a “…watching brief on how it evolves from now on”.

Would the new Commissioner want to see immediate reforms at the WTO? The answer seems to be in the negative. She feel that the best at the moment is to see how best to work with the existing structure. She said: “In terms of the WTO, my reaction is to say that what we have to do is to make, as far as we can, the structure that exists work to our advantage. My personal experience of changing structures is that they take a long time and that, in times when you have the time, that is okay, but when you are trying to deal with difficult and challenging issues it is best, in my view, for the moment, to make the structures that we have as effective as they possibly can be”. She believes that this could be achieved while still promoting the fundamental values.

More interesting issues emerged form her presentation and responses but focus has been directed on those related to the EPAs and the WTO as areas of immediate concern to the ACP and indeed Nigeria. But we would like to comment on two related issues. One, from the part of the new Commissioner, who made serious commitments to carry the Parliament along in the course of her work; and secondly on what would inform her relationship with the experts that may run the bureaucracy under her, when she said: I have always valued the expertise and advice of officials. I have absolutely no doubt that the quality of expertise and advice I will get here will be second to none. But, in the end, I am the Commissioner and, in the end, it has to be my decision – based on that high-quality advice and also on my best judgement – and I have no fear in saying at the end of the process of thinking and listening that, if I disagree, “…I will plough another course. That is certainly my experience, but I will do it in the spirit of wanting to work with my officials and not seeking to set myself up against them”.

The second point is from the part of the Parliamentarians. The session revealed that the Parliamentarians have a level of appreciation of the dynamics of the EPA negotiation than perhaps most of us ever imagined. They were consistently expressing reservations on the way the process has gone so far. The general feeling among those who spoke on the EPA is that the EU has not been flexible to the demands of the ACP countries. One of the Members described the situation thus: “It is clear that some of our partners have signed EPAs because they looked into the abyss and saw the alternative: not because of enthusiasm for EPAs themselves, but because the alternatives were so dire. That means there is, in my opinion, a lot of rebuilding to be done in terms of trust between ourselves, and some of the African, Caribbean and Pacific countries. You said that you would start to talk to them, but I think it is very important – and I wonder if you agree – that, in your new role, you start to rebuild the relationship between the EU and these countries”

We have gone this length to ask a question: is this the messiah or should we expect another? Is this a changing face of EU’s trade engagement? Did the UK government make a statement on their pro-development disposition by nominating her or was it just a case of the political lot falling on her? Would she go all out and pursue her convictions- if we could take her statements as such? What would be the attitude of the bureaucracy under her? Well, wisdom dictates that we wait and see how she translates these bold statements into action when the pressure of balancing the various national and regional political interests becomes real. Some of our older colleagues have noted that this is how they always begin- good talks- but subsequently drowned in the mix. Mandelson (I mean Lord…), they said, started that way.

We have chosen however, not to be a cynical in this matter. We believe the EU has a golden opportunity to show the world generally and the ACPs specifically that EPA is not on another colonial drive. The need to rebuild confidence cannot be overemphasised and we think this is what the new Commissioner (if confirmed) should start with, even as she has acknowledged. But as we observed earlier, it is not yet uhuru for her (neither indeed for us) as she is yet to face the full Parliament and subsequently the Council. We believe she has made a good impression on the Committee on International Affairs and we think they would recommend her endorsement. As we say in Nigeria, we siddon look!

Leo Ugbajah & Ken Ukaoha, Esq.(NANTS)

As Peter Mandelson leaves the EPA, Task before Catherine Ashton

Peter Mandelson and the EPA, Task before Catherine Ashton

The British government led by Prime Minister Godon Brown shocked political watchers and global economic observers on Friday morning when he announced the bringing back of his acclaimed oldest enemy Peter Mandelson back to the British Cabinet. It would be recalled that Mandelson has been the European Union’s (EU) Trade Commissioner where he has been at the helm of the negotiations of the Economic Partnership Agreement (EPA) between the EU and the African, Caribbean and Pacific (ACP) countries.

It is important to note that the history of EPA negotiations under the supervision of Peter Mandelson has been infested with controversies, lopsidedness and absence of development focus, - a situation which gave sleepless nights not only to the negotiators especially from the ACP side, but also to many governments involved in the negotiations, Parliamentarians, the trade Union movements and civil society organisations located within the geographic coverage of both parties in the potential agreement.

According to the Sun newspaper, the British “Prime Minister, took the biggest gamble of his career by reappointing his most bitter foe Mandy (Mandelson) to his government. Mr Mandelson will immediately give up his job as Britain\\\\\\\'s EU Trade Commissioner to become Business Secretary”. In retrospect, the pair came to blows in 1994 when Mandy – who had been Mr Brown\\\\\\\'s closest political ally – jumped ship to back Tony Blair for the Labour leadership on the death of John Smith. Mr Brown never forgave him for the act of treachery and the pair have been poisonous enemies ever since. Yet in a sign of desperation the PM has brought the arch plotter back into government in the most extraordinary reshuffle seen in years. It is reported that Baroness Scotland is tipped to replace Mandelson as the British EU Trade Commissioner.

While we do not take comfort in celebrating or exposing the personal ills or leadership style of Mr Mandelson, we however wish to express our satisfaction that his departure could bring some respite and blow some sense of ease in style and approach, while also reducing the pressure and ferocious push on the negotiations of the EPA especially within the ACP region. We want to believe that Mandelson’s departure would provide the EU with the time and space to think and rethink on certain decisions wrongly taken on the EPA.

More so, while we admire Mandelson’s intelligent and articulate posture, and his commitment to the fast conclusion of the EPAs, we however want to believe that the EU and whoever is going to replace Mandelson has a lot of work to do at re-organising the negotiating machinery at ensuring that the negotiations recognise the commitments of the EU to the development of the ACP region in line with the Cotonou Agreement’s policy trust, and in addition to their prestigious commitment to the Millennium Development Goals.

Similarly, Mandelson’s successor would do well by respecting and recognising the importance and sacrosanct nature of the powers and the voice of the Parliament in the negotiations. We recall that severally in the life of the EPA negotiations, the Parliament which ought to be a respectable voice in the negotiations have allegedly been sidelined and/or ignored.

The negotiations has witnessed moments when the voices of the Parliament mattered so much but was unfortunately ignored. The voice of the European Parliament, the UK Parliament and the French Parliament had at one time or the other through their reports been uncared for. Instances abound where the Parliament had advised against putting undue pressure on the ACP; against insisting on negotiating items (such as the Singapore issues of investment, competition, procurement) which the ACP has shown no interest or received no mandate on; against insisting on deadlines rather than development oriented outcomes; etc. Unfortunately, under the reign of Mandelson in Brussels, such advises have seemingly been dumped in the bin, forgetting that the Parliament is the statutory body responsible for the eventual ratification of the agreement. If the role of the Parliamentarians is neglected with such ignominy and they go along to ratify proposals and negotiation outcomes, what that means is that they have ultimately become rubber stamps. In this regard, Catherine Margaret Ashton, Baroness Ashton of Upholland, if and when she takes up the trade portfolio must be prepared to accommodate the opinion and respect the role of the Parliament. We are hopeful that given the antecedents of the Baroness as one who has worked with the UK Parliament as an under secretary, she would not find it difficult understanding and respecting the views and position of the Parliament as elected representatives of the people.

In the same vein, Ms Catherine Margaret Ashton needs to adopt the voice of negotiation which quite differs from intimidation which has characterised the negotiations under her predecessor. The rights of ACP ministers and negotiators must be respected especially under an EU that propagates, teaches and funds human rights education and democratic tenets among the developing countries. The era of treating ACP Ministers as if they were beggars should be over. The calling of names, the careless throwing of words, and the insistence on dogmatic positions with attributes of master-servant relationship must all be excluded from the negotiations table.

Further more, one other essential instruction that must be considered by the Baroness is the fundamental lesson of the 31st December deadline, its failures and the implications on EPA as well as on the overall relationship between Europe and the developing ACP region. Indeed, a greater percentage of the resistance and negative demonstrations presently knocking at the doors of the EPA are attributable to the suppressions on the ACP to a ‘cast in stone deadline’ that laughably was never to be. It is noteworthy that the ACP countries are still existing even after the deadline, and only few of them managed to initial interim agreements (even when such agreement have not been till date presented to the WTO – a situation that makes them no weightier than any piece of paper). This overriding comment and advise is necessary in the light of the consideration of whether these interim agreements have been able to achieve the volumes the pressures were originally targeted at or not.

The further lesson therefore is for the EU Chief Negotiator to seek ways of addressing differences in opinions in more mature manner, with a feministic, motherly approach and touch without hurting even the least fly from any side. In addition, there must be concerted attempts at building and strengthening the existing relationship between the EU and ACP countries and essentially, winning back the confidence ACPs through cordial collaborations at international fora, respect and support for their views at such fora, and the realization that these ACP region are the colonial enclave of the Europe. Such realization is what is needed to delete from the ACP’s subconscious the belief that the EPA is the hangman’s noose.

The Baroness also requires to build more intimacy with the civil society, especially among the ACP countries. Regular meetings and consultations with this group and other non state actors such as trade unions and producer groups are important and could go a long way to healing the wounds and addressing discomforts.

In technical terms, we expect a shift to a more friendly and development oriented EPAs if negotiations must continue towards fetching hopeful and reasonable outcomes. Special and Differential Treatment provisions of the WTO must be taken into account in the negotiations. Regional integration rather than the present state of disintegration must be at the heart of every item on the negotiation table. Essentially, the wordings and contents of Article 37.3 of the Cotonou Agreement must be respected to wit; building of the capacity of the ACP in terms of production and institutions.

More so, there must be adequate consideration of the impending pains before the gains being sought for through the EPAs. The supply side constraints, the resultant capital flights which could be aggravated by the present global financial crises, the potential de-industrialization and its resultant escalation of unemployment, the cost of adjustment on the economy of the ACPs, the imminent revenue loss, - all these must be placed under serious consideration before taking decisions on the EPA. In addition, answers must be provided on whether a signature on the EPA has the capacity to generate investments by relocating industries from Europe to the ACP countries as a means of creating an atmosphere for equal distribution of resources, equity and justice in international trade and, a healthy global economy. This is the only way of respecting the voice of the Cotonou Agreement which talks about ‘integrating the ACP into the world economy’.

These, in my humble view are the ways through which the UK, nay, the EU would regain her glory (lost?) which organizations like the DFID have been working hard to maintain.

Ken Ukaoha, President NANTS

Nigeria-China Trade: Impact on the Nigerian People...

Nigeria is rapidly becoming China’s second largest trading partner in Africa, with trade between the two countries reaching over $3 billion in 2006. To gauge the exponential rise in Sino-Nigerian trade relations, one may consider the fact that in 1998 its trade volume was $384 million (AllAfrica.com, April 14, 2006). By 2001, this had reached $1 billion and by 2004, $2 billion. Nigerian exports to China—excluding oil—have quadrupled.
Signifying Nigeria’s importance to China, in January 2006, Beijing signed a Memorandum of Understanding with Abuja on the Establishment of a Strategic Partnership. In doing so, Nigeria became the first African country to sign such an agreement with China.
China mainly exported motorcycles, machinery equipment, auto parts, rubber tires, chemical products, textiles and garments, footwear, cement, and etc. It is however argued that much more than is declared in the official Customs figures of Chinese imports find their way into Nigeria.
Nigeria has instituted some structures for administering the trade flows between her and other countries including China. These include:
Tariff system
As at 2007, Nigeria maintains an average tariff rate of 28.6 percent. The average tariff rate for agricultural products is 50 percent, and for non-agricultural products 25 percent. In September 2005, at a meeting chaired by Nigeria President Obasanjo, the Nigerian Federal Executive Council approved a new tariff system. The new tariff system took effect as of October 1, 2005, and expired at the end of 2007. Currently the Common External Tariff for West Africa is being adopted which puts the highest tariff at 20% mainly for manufactured goods.
As stipulated by this tariff system, pharmaceutical products, industrial machinery and equipment under Tariff Heading Chapters 84-89 are granted a one-year import duty free treatment, while raw materials, other means of production and spare parts are levied a 5 percent import duty rate, intermediate products (semi- finished) products 10 percent, finished products 20 percent, and rice 100 percent. The import duty rate for cigarettes is lowered from the original 150 percent to the current 100 percent. Chemical fertilizer imports are exempt from duties and value-added tax (VAT). Vegetable oil import is banned, but olive oil is an exception.
Import duties are collected by the Nigerian Customs Service in association with government-appointed accounting and auditing firms and paid to the Federal Treasury through the selected banks. Tariff rate for special goods is determined by the Federal Ministry of Finance.

Import and export administration
The General Import Licensing Procedure has been abolished since 1986, following the introduction of the Structural Adjustment Program. However, narcotic drugs, psychotropic substances and some pharmaceuticals harmful to health and security remain subject to import licensing.
According to the Import Guidelines of Nigeria taking effect as of April 1, 1996, all goods exported to Nigeria must obtain Clean Results Finding (CRF) and Import Duties Report (IDR). Exporters are not allowed to deal in trade unless registered with the Nigerian Export Promotion Commission (NEPC).
The Ministry of Commerce is Nigeria\'s trade authority, responsible for the administration of foreign trade, domestic trade and regional trade, the making of trade policies, and the administration of trademarks, patents, anti-dumping and other matters.
Structural impediments to Trading with Nigeria: Effect on Chinese Imports
Tariff peaks
Nigeria has high tariffs and tariff peaks. For example, the tariff rate is 98.2 percent for fruit and vegetable products, 89.4 percent for tobacco products, 150 percent for cigars, 75.3 percent for beverages and 42.7 percent for textiles and garments. Since textiles and garments are China\'s major export items to Nigeria, accounting for 15 percent of China\'s total exports to Nigeria, such kind of tariff structure has adversely affected the competitiveness of Chinese relevant products on Nigerian market.
Tariff escalation
Tariff escalation is used to encourage domestic industry and agriculture in Nigeria. Lower tariffs are applied to imports of basic raw materials and means of production (including production equipment), while industrial products, foodstuff, consumer products and luxury goods are levied a higher level of tariffs. Take textile raw materials as an example. While raw silk, wool and linen are imposed a 15 percent tariff rate, cotton 5 percent, cotton thread and cotton yarn 30 percent-40 percent, finished textile products and garments are imposed a tariff rate over 55 percent-75 percent. The tariff rate is 15 percent for log, 30 percent for dale and plywood, and 100 percent for wooden furniture. Since garments and wooden furniture are the main items of China\'s exports to Nigeria, such a tariff structure has considerately hindered China\'s exports of higher- value-added products such as semi-finished or finished products to Nigeria.
Import bans
On April 6 2005, the Nigerian Ministry of Finance issued a revised list of prohibited import items to replace Notification No.12237/S.25/V/172 released on February 25 2004. The main items subject to import ban are live or dead birds including poultry, pork and pork products, beef and beef products, birds\' eggs, flowers, cassava / tapioca products, fresh fruits and dry fruits, corn, sorghum, millet, wheat flour, vegetable fat and oil, confectionery, cocoa products, noodles, biscuits, beverages, beer, bentonite and barite, bagged cement, pharmaceuticals, toothpaste, soap, detergents, mosquito repellent coils, disinfectants, plastic sanitary appliances, household items, toothpick, renovated and second-hand tires, crepe paper and cardboard, textile fabrics, textile products and yarn, all species of footwear and bags, cutlasses, axes, pick axes, spades, shovels and similar tools, second-hand compressors, second-hand air conditioner and second-hand refrigerators/freezers, second-hand automatic vehicles, assembled bicycles and spare parts, wheel barrows, furniture, generator silencers, game players, and ballpoint pens.
Among the items listed above, approximately 20 kinds of Chinese products are affected, including textiles, footwear, cases and bags, cement, and ballpoint pens. The import ban has seriously affected China\'s export to Nigeria. China questions the justifiability of the ban and its consistency with relevant WTO rules, and expresses concerns over Nigeria\'s frequent imposition of import bans.
Import licensing
Specific licensing requirements remain in place for a number of restricted products, including petroleum products, and generators. Applications to import prohibited goods or restricted products subject to import licenses or permits must be made three months in advance of importation. The quantity allocated to each importer, or to be imported from each country, is stated in individual licenses and permits. The quantity is determined on the merit of each application. However, there is usually a lack of clarity in the dealing of these applications, and has brought uncertainty to China\'s export to Nigeria. China expresses concerns over this issue.
Barriers to customs procedures
Customs procedures in Nigeria continue to present major obstacles to trade with Nigeria. Importers face inordinately long clearance procedures and high berthing and unloading costs. The Nigeria government currently practices a double inspection system requiring both pre-shipping inspection and 100 percent on-arrival inspection. Cargoes are kept waiting for clearance at the ports, some even delayed for several months. Currently at fastest it takes a week to clear goods, and normally 2 to 3 weeks, far longer than the committed no more than 48 hours.
The Nigerian government announced on July 1st 2002 that it would remove the required pre-shipping inspection and adopt the destination inspection system. For many reasons, however, the removal has been delayed so far. Currently, in addition to tariff duties, importers have to pay 7 percent surcharges, 1 percent inspection fee on FOB price, and 0.5 percent fee on CIF price for planning trade liberalization in the West African Economic Community. Moreover, for the importation of sugar, 5 percent sugar tax on CIF price is imposed in addition to duties and for the importation of automobiles and auto parts, 2 percent National Automobile Commission fee on CIF price is collected. Moreover, the port authorities collect certain port service fee, depending on the category of products. These tax burdens have, to some extent, hindered normal trade. China expresses great concern over this issue.
Nigeria requires that all imported products must be inspected by the third-party inspection agencies appointed by the government, and also authorizes them to carry out the customs valuation. Chinese enterprises have complained that these inspection agencies often deliberately create difficulties for enterprises, and evaluate imported products arbitrarily. It has seriously undermined the interests of Chinese enterprises.
Technical barriers to trade
The WTO TBT Notification (No.G/TBT/N/NGA/1) issued on February 8, 2005, said that SONCAP certification would become mandatory for importing products such as electrical products, certain auto products and toys. SONCAP is a series of conformity assessment and certification procedures applied to certain categories of controlled products exported to Nigeria. Controlled products must meet the technical standards and regulations of Nigeria or other sanctioned international standards before loading. This measure was scheduled for implementation as of March 1, 2005. According to the conformity assessment procedures, products that are incompatible with the standards set by Nigeria will no t be able to pass Nigeria Customs. According to statistics, in 2004, China\'s export of the products involved in the conformity assessment list to Nigeria reached US$400 million, and more than 70 enterprises exported over US$ 1 million. Only one organization, INTRTEK, has been appointed to conduct the SONCAP certification. Chinese enterprises have complained that the certification fee charged by INTRTEK is quite high, especially for enterprises exporting small parts. Through representations made by the competent Chinese authorities, Nigeria decided to postpone the previously settled date of April 16 2005 to July 16 2005 for implementing the mandatory conformity assessment procedures. China is paying close attention to the development of this issue, as well as its impact on related Chinese products.

“Made In China” goods in Nigeria
Having considered the institutional structures for trade between Nigeria and other countries with China in focus, it must be noted that there is an unprecedented level of imports of Chinese goods into the country even with these impediments occasioned by the trade policies and regimes of Nigeria. The role of Smuggling by Nigerian importers and Chinese nationals can not be overemphasized.
It is not an abnormal thing to see a Nigerian girl who is basically ‘made in China’, wear Chinese blouse on Jeans with belt, bag, shoe and even accessories all made in China in spite of government’s campaign for Made in Nigeria goods. All over the country, Chinese products are the main stay in all markets no matter the size. In fact, they have found their ways into boutiques which hitherto sell only American or European products.
Initially, Chinese products were found only in one spot - the China town in Lagos. But now, Chinese products are found in every corner of Nigeria where there is a store. China town has become a buying site for retailers. It is the Dubai in Lagos and enjoys trips from people from any part of Nigeria.
Chinese products affect the local market because of their very cheap prices. This is as a result of the belief that Nigerians cannot afford expensive products. “Nigerians love cheap things, so the Chinese produce products that fit into the importers’ budget. The Chinese are only business-wise. They give each country what they can afford,” is the common language for most importers of Chinese products.
This attitude makes Nigerians pay through their noses for products that do not serve the purpose for which they are purchased. There is now a miniature of every registered product from other countries solely made in China for Nigeria and other poor developing nations. There is hardly a product that does not have a ‘Made in China’ brand. Motorcycles, handsets, baby walkers, pram and bouncers, baby toys, electric iron, television, Video sets, VCD and DVD players, refrigerators and freezers, cameras, fans, cookers, fryers, kitchen utensils, generators clothing materials and shoes all come in different brands from China.
Another aspect of Chinese imports is the fact that most products are smuggled into the country and little or no custom duties are paid. This was the major reason the Chinese Market in Ikoyi was closed down in 2003 only to be re-opened later after talks with the authorities guaranteeing control of the activities of dubious Chinese nationals involved in the Economic sabotage of importing without paying duties.
Imported Chinese goods sometimes carry the brand names of registered Nigerian products or sometimes a close variation. Examples of products that have suffered this fate are Bic biro and Jordan toothbrush. Bic biro marketed by the renowned company, CFAO has a chinese imitation known as BIG looking like the original BIC and can easily be mistaken for it. Also Jordan toothbrush produced by Rokana industries is at the receiving end of this Chinese invasion. The Chinese started the importation of toothbrush called Jordan into the Nigerian market some years back. The imported Jordan costs much less. This made it easier for it to penetrate the Nigerian market and almost made the Nigerian producer close shop.
Years back, the police raided an unknown company in Lagos where the Chinese owners are alleged to be making millions of naira weekly from pirating musical discs of popular Nigerian musicians and depriving them of their dues in terms of royalties. The warehouse of the Standard Organization of Nigeria, SON, is also brimming with made in China sub standard products worth millions of Naira.
An example of the relative cheapness of Chinese product can be seen in the difference in the price of motorcycles from China and those from Japan. Chinese products which include brands like Ferjeng, Jincheng and Quinqi despite being new are cheaper than fairly used Japanese motorcycles like Yamaha or Suzuki and they are imported into the country in large quantities.
The irrevocable fact is that china has taken over Nigerian Markets and the Chinese are here to stay. The key issue is the perception of Chinese imports by Nigerians. The understanding of this process explains the actions and behavior of Nigerian Traders (Importers) in relation to their decisions in selling Chinese goods. The general perceptions can be related to Price, Packaging and design as well as ready availability.
Impact Assessment of Chinese Imports on Nigerian Traders:
For Nigerian traders, business has been good! The Chinese products have created a whole boom in buying and selling. A common saying is “Nigerians now have a choice”. An assessment of the impact reveals as two main trend: Shifting attention from Manufacturing to Trade and higher volume of trading in New Manufactured products


Shifting Attention from Manufacturing to trade:
The enormous influx of inexpensive Chinese textiles has resulted in the shrinking of Nigeria\'s domestic textile industries as Nigerian fabrics have been unable to compete with their Chinese counterparts.
Business leaders have attributed the decline of Kano\'s manufacturing to influx of Chinese products as trade restrictions fell. Chinese companies had more modern machinery, more reliable sources of electricity and easier access to capital, said Saidu Dattijo Adhama, owner of a textile factory whose payroll has dropped from 335 workers to 24. The raw cotton produced by Chinese farmers, meanwhile, was stronger and yielded more fabric per pound.
As General Secretary of the Textile, Tailoring and Garment Union Issa Aremu notes, the mass importation of textiles—both second-hand from Europe and new garments, mostly from China—has led to the closing of 65 Nigerian textile mills and the laying off of a total of 150,000 textile workers over the past ten years (Koinonia International, February 15, 2005).
The laid off workers and business owners however, now resort to purchase and sales of Chinese products to continue living. Even when the earnings from such trading instead of manufacturing is far less than desired, trading in Chinese products have become a haven for many.
Signs of China\'s growing prominence in Nigeria are easy to spot in Kano, a bustling, thousand-year-old city of 3.5 million people that long was a regular stopover for trade flowing through the Sahara, whose sandy southern edge is nearby. Now the city\'s gaze has shifted to the Far East, with Chinese restaurants spreading across the city and Chinese goods filling shops.
Higher volume of Trading:
Though this has been argued in various quarters, it is evident that increased trade results to growth and poverty reduction for the stakeholders. Effective demand of goods and services indicates that the consuming public has purchasing power. Even when the economy of most Nigerians have not changed much, cheaper alternatives to the usually expensive products, whether locally produced or imported, are now available, enabling people to make their choices. This effective demand has increased the volume of trade with its resultant effect of increased income for the traders.
Fairly used and new products:
Traders have also benefitted from the imports of Chinese goods in that the status symbol associated with buying brand new products in Nigeria has spiraled demand for cheap new products instead of buying the popular “Tokunbo” or ‘second hand’. The demand resulting from this has justified the unprecedented level of imports of Chinese products. It is this increased trade that connotes the level f prosperity being enjoyed by Nigerian traders.

Edwin Daniel-Ikhuoria, Head Communications and Advocacy-NANTS