Dr Stephen Hurt, Reader in International Relations, Department for Social Sciences, Oxford Brookes University – Written evidence (ZAF0010)

Introduction

1. I am a Reader in International Relations in the Department of Social Sciences at Oxford Brookes University. I have conducted research on EU trade and development policy with African, Caribbean and Pacific (ACP) states since the early 2000s and have published on both the Cotonou Agreement between the two parties and the subsequent negotiation of EPAs.[1] The focus of this submission is on the priority of ‘driving prosperity’ outlined in the joint UK/African Union (AU) communiqué of 22 February 2019, which identifies the ‘promotion of UK-Africa trade and investment’ as a key driver. Specifically, I explore the challenges for the UK’s post-Brexit trade policy and the consequences this will have for both the African Continental Free Trade Area (AfCTA) and the AU’s longer-term vision expressed in ‘Agenda 2063’.

Africa’s vision for prosperity: the AfCTA and ‘Agenda 2063’

2. Both the AU’s ‘Agenda 2063’ and the AfCTA seek to promote industrialisation as a central component of the continent’s future development. For example, ‘Agenda 2063’ includes a call for the structural transformation of African economies ‘through industrialization, manufacturing and value addition to create shared growth’.[2] However, this vision for prosperity is not constructed onto a blank canvas. Africa’s place in the global economy and its external economic relations remain highly significant in terms of the viability of this vision.

3. The AU’s vision for the continent’s development seeks to address the fact that manufactured goods continue to constitute the vast majority of exports to Africa from the rest of the world and that most exports from Africa to the outside world are primary goods. What is notable here is that intra-regional trade within Africa offers the potential for diversification and value addition. The average for the period 2015-17 shows that manufactured goods accounted for 44.9% of intra-African exports, compared to just 20.3% for African exports to the rest of the world.[3]

4. The ability of African governments to promote such industrialisation is not influenced by domestic reforms alone. Trade agreements negotiated with external partners can play a major role in shaping the parameters of what is possible. As a result, greater reciprocity in the liberalisation of trade can serve to reinforce these long-standing historical patterns of trade between Africa and the rest of the world.

The UK’s post-Brexit trade policy and Africa

5. The UK and the AU agree in their joint communiqué of 22 February 2019 to increase levels of trade and to support the AfCTA. This will require a post-Brexit trade policy in the UK that acknowledges the need to address the problematic patchwork of trade arrangements with Africa, which the UK will inherit by virtue of its membership of the EU over more than four decades.

6. The EU’s trade arrangements with Sub-Saharan Africa are a complicated mix of different structures. Since 2001, all countries classified by the UN as a Least Developed Country (LDC) qualify for the Everything But Arms (EBA) scheme. This allows all exports from LDCs (except arms and armaments) non-reciprocal duty-free and quota-free access to the European market. Low and lower-middle income countries, meanwhile, can trade with the EU via its Generalised Scheme of Preferences (GSP). Under the GSP duties are reduced for approximately two-thirds of product lines.

7. The EU has also negotiated Free Trade Agreements (FTAs), known as Economic Partnership Agreements (EPAs) with a number of countries in Sub-Saharan Africa. EPA negotiations were conducted with seven sub-regions within the ACP group of states. Five of these are within Africa and as a result, EPAs have served to weaken the collective bargaining power of both the ACP group of states as a whole and the unity of Sub-Saharan African states within this bloc. They have also complicated the situation as EPA negotiating groups in Africa often contain both LDCs and non-LDCs.

8. The contentious nature of the EPA negotiations has been well-documented.[4] Given their non-reciprocal nature, it is African partners who will have to do the bulk of the trade liberalisation. Both civil society organisations across Europe and Africa, together with a number of African states have argued against the EU’s desire for comprehensive EPAs that go ‘beyond-the-border’ to include rules on investment, competition policy and government procurement. This would entail regulatory alignment, which would undermine the autonomy required for their development strategies.

9. So far, UK policy has been to seek to roll-over or ‘grandfather’ these arrangements. This has been deemed necessary in order to preserve access to the UK market for African exporters.[5] However, once the UK has left the EU it will be able to enter into formal trade negotiations with third countries and regions. At this point, the UK should consider alternative arrangements, which will avoid the replication of the problems associated with EPAs and instead support the AU’s vision for development.

Towards a UK trade policy that supports African strategies for development

10. There is a danger that the nature of Africa’s external trade arrangements may stifle the integrationist aspirations of ‘Agenda 2063’. With respect to UK policy, the roll-over of EPAs will mean reciprocal liberalisation of trade between the UK and African trade partners, resulting in a continuation of colonial patterns of exchange and a lack of policy space to enable diversification in many African countries.[6]

11. The landscape has changed significantly since the EU began its EPA negotiations in 2002. The decision to create the AfCTA moves us away from the approach to development central to EPAs. The UK will have a choice to make as an independent trade power after Brexit. Instead of simply rolling-over the EU’s current arrangements, the UK could develop policy that is in alignment with the development strategies of Sub-Saharan African states.

12. In the short-term, the UK could create a unilateral preference scheme for Sub-Saharan African countries that improves on the terms of the EU’s EBA arrangement with LDCs. One viable proposal would be for an extension of duty-free, quota-free access to the UK market to non-LDCs deemed economically vulnerable, which could be made compatible with the rules of the World Trade Organization (WTO) using the Enabling Clause.[7]

13. Post-Brexit the UK will also become an independent actor within the WTO. Within this multilateral forum it should advocate for rules that allow greater scope for non-reciprocity for developing countries when negotiating FTAs, rather than portraying WTO rules as fixed and immutable as the EU did when it justified the need to negotiate EPAs.

14. Then, in the medium term, the UK could consider a free trade agreement with the African continent, assuming sufficient progress has been achieved in the implementation of the AfCTA. In contrast to EPAs, this could include a number of pro-development features: limited reciprocity, flexibility so that allowances can be made for African LDCs, generous rules of origin to allow greater regional cumulation and effective safeguarding measures to protect African countries from import surges.

15. In sum, the UK needs to develop a more progressive post-Brexit trade policy that will allow the policy space for African countries to realise the aspirations of the AU for development across the continent.

Received 30th October 2019

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