Has Cotonou Engineered a Reverse Imperial Preference?

The Lomé Convention and the Cotonou Agreement represent two distinct phases in the partnership between African, Caribbean, and Pacific (ACP) countries and the European Union (EU). Even in their differences, the phases appear to align effortlessly with Best’s (1968) Imperial Preference which posits that Hinterland Economies enjoy an imperial preference as it concerns finding markets for their goods. In other words, Metropolitan Economy has made it so that metropolitan markets are the preference of hinterland producers by wooing them with incentives such as lower tariffs. The idea here is that if Hinterland Economy is given preferential access in metropolitan markets, it is less inclined to trade with Southern partners which do not show them preference. Thus Metropolitan Economy shows preference to ensure guaranteed fulfillment of their demands for goods and services, and to entice hinterland economy with ease of trade.

The main characteristic of trade cooperation under the Lomé Convention was the non-reciprocal trade preferences granted to ACP countries by the EU, which allowed these countries to have preferential access to the EU market without having to reciprocate the preferences to EU imports. In response to the World Trade Organization (WTO) rules, which found the Lomé Convention’s preferential treatment incompatible, the Cotonou Agreement adopted a new framework, the Economic Partnership Agreements (EPAs). 

EPAs are reciprocal free trade agreements intended to gradually liberalize trade between ACP countries and the EU, while still providing special provisions for ACP countries to protect their economies (Gathii, 2014). In accordance with Article 36 of the Cotonou Agreement, the ACP and EU countries were tasked with negotiating and formulating trade agreements that would remove “barriers to trade between them and enhancing cooperation in all areas relevant to trade’.  This proved a matter of extreme difficulty for all of the countries that form part of the ACP bloc because applicable resolutions would mean that ACP markets and products would be placed in a position where they are equally exposed to European goods and products. This requirement placed ACP countries in a conundrum where their products would have to assume a level of competitiveness against European products. The fear of African and Caribbean governments, a valid one, was that local products had not yet arrived at a level of competitiveness that would be able to contend with the quality of products coming in from Europe. 

Some may choose to counter with a logical argument that asserts that the Cotonou Agreement has effectively dismantled the long-standing principle of Imperial Preference. Proponents of this view will contend that the agreement has transformed trade relations between the EU and African Union (AU) and the Caribbean Community (CARICOM) member states from a state of dependency to a more balanced and equitable partnership. This, they say, should essentially give AU and CARICOM states impetus to explore new trading relationships with entities that are not the EU. Nevertheless, an examination of the net export and import trends that encompass trade flows from the AU to the European Union (EU) and vice versa, as well as those between CARICOM and the EU pre and post-Cotonou, unveils a rather intriguing revelation. The Cotonou Agreement appears to have inadvertently given rise to a reverse form of Imperial Preference, in which the importation of goods originating from the erstwhile imperial powers is granted precedence in both AU and CARICOM domestic markets.

According to the European Council (n.d.), the first provisional application of EPAs in African countries took effect on May 14, 2012 in Mauritius, Seychelles, Zimbabwe and Madagascar. The trade data in Figure 2 above shows that prior to 2012, for the period 2002-2011, for 5 years (2005, 2006, 2007, 2008, 2010) the African Union maintained its status as a Net Exporter in its trade relations with the EU. However, this relationship underwent a transformation during the period 2013-2022. Following the inauguration of the first provisional application of EPAs with merely four AU member states, the AU shifted to Net Importer status in its dealings with the EU. By 2014, coinciding with the second provisional application of EPAs, it became apparent that the AU’s Net Importer designation would remain unaltered (European Council, n.d.; World Integrated Trade Solutions, 2022). Current trends indicate that as more AU member states ratify EPAs and initiate provisional applications, the AU is likely to persist as a Net Importer in its relationship with the EU. This nuanced yet consequential evolution raises concerns regarding the true efficacy of the Cotonou Agreement in cultivating a more equitable trade environment between participating nations. Furthermore, it brings to light the continued marginalization of not only domestic producers within the AU market but also producers and exporters from Southern regions such as the AU who may struggle to rival their more prosperous counterparts (exporters) from Northern markets.

Graph 3 below will show that a similar trend abounds where trade flows between the CARICOM and the EU are concerned.

The European Council (n.d.) reveals that the initial provisional application of Economic Partnership Agreements (EPAs) in the CARIFORUM region commenced on December 29, 2008. Upon examining the trade data presented in Graph 3, it is evident that during the period preceding the EPAs’ implementation (2002-2007), the CARICOM consistently imported a higher volume of goods from the European Union (EU) than it exported to the bloc. This trend only intensified following the introduction of the EPAs, entrenching CARICOM’s position as a net importer in its relationship with the EU. Despite fluctuations in the net import balance between 2008 and 2022, the general trajectory indicates a persistent increase in imports from the EU, culminating in an import volume that exceeded exports by an astonishing 216.55% in 2022. As these trends suggest that CARICOM’s status as a net importer will continue to deepen, one must question the effectiveness of the EPAs in promoting a fairer trade environment between the participating nations. This subtle yet significant development not only highlights the potential disenfranchisement of domestic producers within the CARICOM market but also underscores the challenges faced by producers and exporters from the Southern regions, such as the African Union (AU), who may struggle to compete with their wealthier counterparts in the Northern markets.

Ultimately, the Lomé Convention and Cotonou Agreement play a pivotal role in upholding Lloyd Best’s overarching institutional framework, particularly the rule of Imperial Preference. Consequently, the presence of Imperial Preference within these agreements influences the political landscape of the Global South in a manner that constrains the possibilities for forging stronger alliances and partnerships between the AU and CARICOM.

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