The Economic Partnership Agreements and Africa’s integration and transformation agenda: the cases of West Africa and Eastern and Southern Africa regions

Significant progress have been made recently by African countries towards the signing of the Economic Partnership Agreements (EPAs) with the European Union (EU), and following twelve years of intense negotiations. However, unilateral trade preferences granted to African economies to a WTO-compatible reciprocal –albeit asymmetric– agreement, such as the EPAs, has traditionally raised numerous concerns, notably on the potential impact on Africa’s regional integration and development prospects. These questions are all the more relevant at the current juncture, characterized by the growing momentum towards the establishment of the Continental Free Trade Area (CFTA) by the indicative date of 2017. In light of this, an empirical assessment using the MIRAGE computable general equilibrium (CGE) model was undertaken to sheds new lights on these issues, focusing on the cases of West African and ESA regions. Findings show that if trade benefits are to be expected for both Africa and the EU –following the signing of EPAs– these will esentially be concentrated in a handful of non-industrial sectors and countries as far as Africa is concerned. Moreover, it will be detrimental to intra-African trade and reducing tariff revenues for African governments. Nevertheless, the establishment of a CFTA before the EPAs are fully implemented would not only preserve gains from EPAs but reverse its negative effects on African economies. Indeed, intra-African trade would then be strongly stimulated, especially in industrial products, thereby offering positive perspectives for Africa’s structural transformation. The reduction of costs to trade across borders would enhance further the benefits. Therefore, Africa should seize the opportunity offered by the transitional period under EPAs to effectively deepen its regional integration process.