5.2.1 Reciprocal trade agreements
Despite several trade and cooperation agreements between SSA countries in re-cent decades, the implementation of these RTAs is slow and the expected economic spillovers have been delayed. We argue that the powerlessness of governments with internal conflicts between political and ethnic factions, and also the relative eco-nomic marginalisation of Africa after independence (and with natural impediments), can explain this situation. African authorities quickly grasped the opportunities of regional integration with the removal of trade barriers and coordination policies without, however, managing to make the trade opportunities a full reality.
“In 2010, the 58 African countries were involved in 55 PTAs, of which 43 were South-South and 12 were North-South. PTAs have also increasingly become cross-regional. Of the 55 African PTAs, 31 are crosscross-regional.”6 This developing region did
6http://www.ferdi.fr/sites/www.ferdi.fr/files/publication/fichiers/wp93_de_
melo_web_1.pdf. Since April 2015, WTO counts 612 notifications of regional trade agreements
not spare by the spread of PTAs (Table 10). Indeed, there exist two sets of RTAs, which overlap: reciprocal trade agreements mainly with developing countries (except for Economic Partnership Agreements7) and non-reciprocal trade agreements with developed and developing economies. The motivations to belong to these agreements differ according to the kind of agreements and the concerned partners.
Figure 5.1: “Spaghetti bowl” phenomenon for SSA’s RTAs
Source: WTO database about RTAs.
We start by focusing on RTAs between SSA countries8, where the latter
coex-(RTAs) with 406 in force, where 90% are free trade agreements (FTAs) and 10% are customs unions (CUs).
7EPAs gradually replace EU-ACP agreements like Cotonou agreements.
8Economic and Community of West African States (ECOWAS), West African Economic and
ist with several regional cooperation agreements such as Indian Ocean Commission (IOC), Intergovernmental Authority on Development (IGAD), Mano River Union (MRU), Walvis Bay Corridor Group (WBCG), and Economic Community of the Great Lakes Countries (ECGLC), to name a few. Figure 1 shows the main SSA’s RTAs that intersect at a different level of integration. Based on WTO studies9, amongst the RTAs retained, three are FTAs (COMESA, SADC, and ECOWAS), two are CUs (WAEMU and EAC) and only one is a PTA (EMCCA). On average, 95% of these members are also members of another RTA, which accentuates the
“spaghetti bowl” phenomenon (Bhagwati et al., 1998). For instance, many issues appear because of this multi-membership: schemes of integration opposed, the lack of funding, the free-rider problem and duplicates. Other factors arise, such as the fear of trade diversion, the domino effect, and also the economic spillovers as the removal of trade barriers and the increasing market opportunities motivate countries to belong to RTAs. The fragmentation of SSA economies and the narrow markets are at the root of the launching of these regional integration schemes. To achieve these development objectives, two programs have been established : i) the New Part-nership for Africa’s Development (NEPAD), created in 2000, is a program developed by the African Union (AU) to promote economic and social development10 from each RTA in Africa ; ii) a Minimum Integration Program (MIP) sustains the process of re-gional integration by strengthening cooperation11between them around the principle
Monetary Union (WAEMU), Economic and Monetary Community of Central Africa (EMCCA), Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC), Southern African Development Community (SADC).
9https://www.wto.org/english/tratop_e/tpr_e/tpr_e.htm
108 sectors are concerned: infrastructure, education, health, agriculture, technologies, environ-ment, energy, and trade.
11Accelerate the implementation of priority programs under the subsidiarity principle like preferential trade liberalisation, free movement of production factors. For more details: http:
//www.uneca.org/publications/assessing-regional-integration-africa-v
of variable geometry for integration, that is, an integration at multispeed.
5.2.2 Non-reciprocal trade agreements
Non-reciprocal trade agreements result more from historical and (geo)political mo-tivations in the specific case of Africa. The first trade preferences date to the colo-nial period, when tropical products coming from colonies had privileged access to colonised markets, allowing them to secure their supplies. With the advent of de-colonisation, the fourth part of the Rome Treaty (1957) established that the Euro-pean Economic Community (EEC) granted free access to markets of former colonisers for exports of overseas countries and territories. The independence of ex-colonies led to new international trade treaties, notably the Yaound´e (1963), Lom´e (1975), and Cotonou (2000) agreements between EU and ACP countries12. In parallel, the United Nations Conference on Trade and Development (UNCTAD)13 implemented the gen-eralized system of preferences (GSP) at the end of the 1960s, and it has opened the door to a plethora of RTAs of this kind for each of the advanced economies but also with specific treatments for least-developed countries (LDCs). For example, in the case of the EU14, in which their GSP (1971) is broken down into three trade groups. First is the “classic” GSP for all developing economies around the world even if the graduation mechanism stops the preferential advantages for emerging
12Since the 2000s, EU and ACP countries have launched the negotiations for the establishment of the Economic Partnership Agreements (EPA) for each developing regions.
13The Resolution 21 of the UNCTAD II Conference in New-Delhi (India) in 1968: “The objec-tives of the generalized, non-reciprocal, non-discriminatory system of preferences in favour of the developing countries, including special measures in favor of the least advanced among the develop-ing countries, shoud be to increase their export earndevelop-ing, to promote their industrialization and to accelerate their rates of economic growth”.
14The preferential US trade system also comprises the African Growth and Opportunity Act (AGOA) since 2000. African countries have duty-free access to the US market, which is non-reciprocal, and the list of beneficiaries is renewed annually according to political and economic criteria.
countries. Second, the “GSP+” extends these preferences for developing countries that ratify conventions on human rights (which drastically reduces the number of beneficiaries). Third, the device “Everything But Arms” (EBA) is the most advan-tageous, with a duty-free access for 99% of tariff lines exclusively concerning LDCs.
Furthermore, emerging countries (India, China, Taiwan, Republic of Korea)15 have recently granted duty-free treatment for LDCs to sustain their economic expansion in the world economy and essentially in Southern countries. This conversion for RTAs is only valid with developing countries, since developed countries are more reluctant to belong to reciprocal trade agreements.