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It’s time for a new economic agreement between the EU and Africa – POLITICO

Muhammadu Buhari is the President of the Federal Republic of Nigeria.

As far as relations between the European Union and Africa are concerned, the inequitable arrangements have long been passed over in silence for lack of alternatives.

Increasingly unsustainable, these unilateral agreements have sparked calls on both sides of the Mediterranean for a partnership of equals. At the EU-Africa Summit, leaders from across my continent will come together with their European counterparts to turn that rhetoric into substance.

The EU is currently Africa’s largest trading partner, and Africa is the fastest growing continent on earth. While each offers the other great opportunities, as partners we also share a host of issues. Today, the EU-Africa relationship must be reoriented towards a new economic arrangement in order to deal with it.

By 2050, Africa’s population of 1.3 billion is expected to double, representing a quarter of the world’s total. My country, Nigeria, is expected to double its population to 400 million by then, overtaking the United States to become the third largest nation in the world. This means a huge youth market on Europe’s doorstep and, with increased trade, a growing middle class with money to spend.

However, despite a nascent possibility, irregular migration north from my continent is draining Africa’s talent pool, while provoking political crises in the EU. Despite all its efforts, Europe will not find a lasting remedy to this problem by further strengthening its Fortress Europe approach. Instead, more opportunities must be created for Africans at home, providing alternatives to the decision to take a life-threatening boat trip in order to seek them elsewhere.

The relationship between the EU and Africa must be rebalanced to promote job creation. Unfortunately, today’s arrangements do the exact opposite.

Where some claim that preferential trade policies with the EU help Africa, the reality is much more complicated. The Everything But Arms program grants 32 African countries duty-free access to protected European markets. In addition to the fact that this excludes many of the continent’s 54 nations, there remain barriers to European markets, even for countries that qualify.

For example, although agricultural subsidies to EU farmers are not the same as external tariffs, their effects are the same: they make African exports uncompetitive. More than 50 billion euros are invested in keeping European food products cheap. With its main export market skewed against them, African countries are starved of foreign exchange and investment in agriculture is stifled.

Conversely, Economic Partnership Agreements (EPAs) give Europe greater access to African markets. At the bottom of the value chain, these free trade agreements ensure that EU agricultural subsidies deal a further blow to African farmers, as artificially devalued products flood the market, undermining domestic competitors. For example, European milk surpluses generated by subsidies are ground into powder and sent to Africa, decimating its dairy industry. It’s a similar story when it comes to wheat and poultry production. Despite having the most underutilized arable land in the world, Africa remains a net food importer. Meanwhile, more than half of Africans work in agriculture, a sector in which sustained improvements offer the fastest route to poverty reduction on the continent.

At the upper end of the value chain, the premature trade liberalization demanded by these EPAs has put nascent manufacturers out of business. In other cases, industries simply do not materialize because there is no incentive to enter the market. Consequently, the jobs needed to satisfy the millions of young Africans who enter the labor market each year are not being created.

It is for these reasons that Nigeria decided not to sign an EPA. But this has only been possible because of our place as the largest economy in Africa. Small nations have little choice.

The unease over such agreements is not limited to Africans either. Warnings from the EU, including development ministers, said the deals were irreconcilable with promises of poverty reduction and the UN’s Sustainable Development Goals.

When subsidies and EPAs are taken together, current trade agreements are little different from what happened in the past. Africa provides natural resources. Yet extractive industries are job-light and separate Africa’s wealth from the continent.

It’s not just about rewriting the chords. We also need to change the way we interact. In 2019, the African Continental Free Trade Agreement (AfCFTA) entered into force. It has created the largest free trade market in the world and over time it will gradually eliminate tariff and non-tariff barriers between nations on the continent.

A legacy of colonial extraction, trade within the continent currently languishes at 17%, compared to 68% for Europe. In fact, Africa trades more with Europe than with itself. The free trade area must remedy this, by stimulating development while diversifying economies.

At the same time, speaking with one voice, Africa can harness its collective influence to secure better business for itself on the global stage. Today we meet as continents, and our trade relations should take this into account. Yet EPAs pit the EU against regional groupings or individual African countries, and the pursuit of these agreements has the effect of creating a multitude of varying conditions and tariff regimes across the continent. By pulling nations in different directions, it will slow down the implementation of the AfCFTA and undermine eventual efforts to achieve a customs union.

Moving forward, it is clear what a new economic agreement between our unions should entail: for Africa, it must offer a chance for a fundamental new economic agreement. For Europe, it must offer the opportunity to get rid of a trade policy that stifles job creation in Africa and hampers efforts to stem economic migration to Europe.

The way forward is clear, just get the deal done.

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