NigeriaandtheEuropeanUnion TradeforDevelopment An In t roduct ion totheEconomicPartnershipAgreement(EPA)Nigeria and the European Union

Trade for DevelopmentAn Introduction

to the Economic Partnership Agreement (EPA)

ECONOMIC

PARTNERSHIP

AGREEMENT

This brochure has been published in English by the European Commission, Directorate-Gen-eral for Trade, Directorate-General for Development and European Commission Delegation in Nigeria

Neither the European Commission nor any person acting on behalf of the European Commis-sion is responsible for the use which might be made of the following information.

A great deal of additional information on the European Union is available on the Internet.This can be accessed through the Europa server (http://ec.europa.eu)

Layout: Mostra CommunicationDesigned by: Caroline DoyenConceived and written by Tom Millar and Jenny Lovbom

© Photos: European Commission Delegation in Nigeria

Luxembourg, Office for Official Publications of the European Communities, 2007

ISBN: 978-92-79-05669-8

© European Communities, 2007Reproduction is authorised provided the source is acknowledged.

< � >

Statement fromPeter Mandelson,

EU tradecommissioner

Globalisation brings real economic chal-lenges for the West African sub-region. Global economic change can be a positive force for development in West Africa, provid-ing new markets for exports and new possi-bilities for trade and investment. But it also brings challenges, not least the pressures of integrating into the global economy. In or-

der to help the states of West Africa harness and benefit from global economic change, the EU and West Africa need to build a new economic partnership which strengthens the re-gion economically and helps equip West African countries for a changing economic world. Our work starts with an effective reduction of poverty. Without greater economic opportuni-ties, few West African countries will have the revenues they need in the long term to deliver basic services or even maintain the economic and social fabric of their societies. Boosting economic opportunities will also be a key factor in achieving the Millennium Development Goals.Building on a long history of excellent co-operation the groundwork for this new EU-West Africa partnership has already been laid. The Cotonou Agreement is unique in linking de-velopment assistance and trade relations and ensuring that they reinforce each other. The Economic Partnership Agreements we are currently negotiating to replace the original trade chapters of the Cotonou Agreement will reflect the same balance. The challenge for the Economic Partnership Agreements is to add a third dimension: fostering regional integration and helping to create the conditions for attracting vital investment. That is the vision for each of the Economic Partnership Agreements the EU is negotiating with the six ACP regions.

This brochure describes what has been done so far to make the vision for Economic Part-nership Agreements a reality. As the EU and West Africa are now entering this final phase of substantive negotiations, the issues at stake are complex and often sensitive, and a well-informed debate among all those who have a stake in this process is essential. This brochure shows that the EU is firmly committed to putting trade at the service of develop-ment in West Africa. I hope it will be a useful contribution to the future debate on EPAs.

April 2007

< � >

Europe and

Nigeria

in a changing world5 Introduction

6 WhatisanEPA?

9 Nigeria|ThegiantofWestAfrica

10 Thecontext

Nigeria’stradewiththeworld

Globaltraderules

12 TheEPA

Apossiblesolution

Howwoulditwork?

NigeriaandtheEU

15 TheFuture

16 FactorFiction

19 Frequentlyaskedquestions

22 Appendix

EUTradeRelatedTechnicalAssistance

< 5 >

Europe and

Nigeria

in a changing world

Whoever you are, the way that Nigeria trades with its neighbours and the wider world will have some effect on you. It may be the cost and choice of goods at your local store. It may be the level of employment opportunities in your area. It may be the ease with which you can find markets for the goods you make or the services you provide.

For this reason, it is critical that all Nigerians understand the basic arguments about the Economic Partnership Agreements (EPA) now being negotiated between the European Union and the ACP (African, Caribbean and Pacific) states.

Unbiased and comprehensive information on the EPAs can be difficult to find. As this docu-ment is published by the European Commission, we will not claim to be a disinterested party. However, this brochure aims to answer some of the questions that we are most often asked, and dispel some of the myths.

Please see our website (http://www.delnga.ec.europa.eu/), which has a dedicated trade section, for more information, or contact us directly. You can also find more information on

the EU’s EUROPA website (http://ec.europa.eu).

Introduction

< 6 >

MAURITANIA MALINIGER

NIGERIABENIN

BURKINAFASO

TOGO

GHANA

COTED’IVOIRE

LIBERIA

SIERRALEONE

GUINEA

CAPEVERDE

GUINEA-BISSAU

SENEGAL

THEGAMBIA

WESTAFRICA:Benin, Burkina Faso, Cape Verde, Ivory Coast, the Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone, Togo

EU:Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, The Netherlands, United Kingdom

< 7 >

Economic Partnership Agreements (EPAs) are currently being negotiated between

the EU and all six regional groupings of the ACP states. The EPA between the EU

and West Africa involves two regions, each with its own long history of regional integration. The EPA pro-

vides a unique opportunity for trade integration between the EU and West Africa, by building on existing

efforts to promote greater economic integration in the sub-region.

The EPA is a joint response to the challenges of globalisation and development. It aims to help West Africa

become more competitive, diversify its exports and build a regional market with the uniform, transparent

and stable rules needed to reinforce economic governance and attract investment. The eventual goal is to

build a genuine partnership for development between the EU and West Africa, tailored to the region’s

specific circumstances. It will go far beyond the benefits and limitations of the current trade arrangements, which are

largely confined to ensuring access to the European market for West African products.

West Africa will also receive significant additional financial support from the EU in preparation and imple-

mentation of the EPA. The trade aspects of the agreement will also be asymmetrical. In other words, West

Africa will have twelve years or more to open up its economies, and will also have the opportunity to protect

sensitive sectors. In return, the EU will grant full market access on all products immediately following the

signing of the agreement with a phase-in period for rice and sugar.

It is crucial that trade relations between West Africa and the EU evolve and adapt to the changes that are

currently transforming the international economy. These developments bring new challenges, including tougher

competition from newly developed economies, especially from Asia, in some sectors traditionally occupied

by West Africa. The changes also bring new development opportunities in, for example, the service sec-

tors.

What is an Economic Partnership Agreement?

< 8 >

Why trade?

International trade is the exchange of goods and services between countries. Trade improves con-

sumer choice and total welfare. Countries have different factor endowments e.g. climate, capital,

labour and natural resources vary between nations. Therefore some countries are better placed

to produce certain goods than others. Most critically, even if a country does not produce anything

more efficiently than its trading partners, it can still benefit from trade [Comparative Advantage].

The production of goods and services requires these resources. Some goods require more capital

– technical equipment and machinery – and are called capital intensive. Examples of these goods

are cars and computers. Other goods require less equipment to produce and rely mostly on the ef-

forts of the workers. These goods are called labour intensive. Examples of these goods are shoes

and textile products.

By specialising in production, and by trading with other countries, it is possible for countries to increase

their incomes. Even though countries as a whole benefit from specialisation and international trade,

some groups in society, providers of labour or capital, might lose. If international trade leads a country

to specialise in producing goods that require lots of workers and little capital, such a specialisation

increases wages (which benefits the workers) but decreases the income of the capital owners, but the

country as a whole benefits because the gain of the workers is bigger than the loss of the capital owners.

< � >

Nigeria The giant of West Africa

Nigeria maintains a huge influence over the West

African region, both politically and economically.

About half of the West African population is Nigerian,

and current figures estimate that the Nigerian GDP

amounts to about 60 percent of the region’s GDP.

Nigeria is also the largest trader in the region, accounting

for almost 60 percent of West African external trade. How-

ever, this trade is limited both in terms of products and in

terms of destination markets. Fossil-fuel products are by far the dominant export, making

up about 94 percent of exports towards the EU in 2006, followed by foodstuffs and animal

products at about 3 percent. The EU absorbs about 22 percent of all Nigeria’s exports,

and overall accounts for 25 percent of Nigeria’s trade, second only to the US. Like most

West African states, only a small fraction of Nigeria’s trade is with its regional neighbours.

Ghana is its biggest trade partner in the region, accounting for just over 1% of total trade.

Trade between Europe and West Africa

Of the ACP regions negotiating EPAs, West

Africa is the biggest in terms of trade, ac-

counting for about 40% of all EU ACP trade.

The EU in turn is West Africa’s leading trad-

ing partner, accounting for about one third

of the region’s trade. Bilateral trade between

the EU and West Africa totalled about €32

billion in 2006. The region’s exports to the

EU totalled €16.5 billion in 2006, of which

about 64% was Energy and 22% Agricultural

products.

< 10 >

CONTEXT the Context

Nigeria’s trade with the World

Even though Nigeria is a large regional player, its share of world trade is very small, ac-

counting for about 0.7 percent of global exports and 0.4 percent of global imports. The fig-

ures for Europe are a little higher - 0.8 and 0.6 percent of EU exports and imports respectively.

Nigeria’s share of world trade may have received a boost from recent oil price rises, but the overall trend is

for an ever decreasing share of world trade.

In this Nigeria is not alone - West Africa’s

share of world trade has decreased from ap-

proximately 5% in 1980 to less than 1% in

2004.

There are many views of why this might be

the case. Whatever the reasons, any solu-

tion will relate to the rules governing Nige-

ria’s trade relations.

Global trade rules

Since 2000, trade relations between Nigeria and the EU have been governed by the Cotonou Agree-

ment.

The current regime grants Nigeria unilateral preferences i.e. the EU is giving Nigeria better conditions for its

trade with Europe than the EU gets in return. This arrangement is not formally in compliance with the World

Trade Organisation’s (WTO) rules for international trade. Consequently, when the Cotonou Agreement

entered into force, the signatory countries asked for, and received, a waiver from the other members of the

WTO. A new trade arrangement must now be agreed before this waiver expires at the end of 2007.

Adam Smith – An Inquiry into the Nature and Causes of

the Wealth of Nations 1776

“What is prudence in the conduct of every private family

can scarce be folly in that of a great kingdom. If a foreign

country can supply us with a commodity cheaper than we

ourselves can make it, better buy it of them with some part

of the produce of our own industry employed in a way in

which we have some advantage.”

< 11 >

The Cotonou Agreement

The European Union (EU) and the African, Caribbean and Pacific

(ACP) countries signed their cooperation agreement in Lomé, Togo, in

1975. After four successive Lomé conventions, a broader partnership

agreement was signed in Cotonou, Benin, in June 2000. Known as

the Cotonou Agreement, it was signed by the Heads of State of all EU

and ACP countries. This international treaty defines how the EU and

ACP will cooperate on political, development and trade issues.

The World Trade Organisation (WTO) is the

only global international organisation deal-

ing with the rules of trade between nations. At

its heart are the WTO agreements, negotiated

and signed by the bulk of the world’s trading na-

tions and ratified in their parliaments. The goal

is to help producers of goods and services, ex-

porters, and importers conduct their business.

Source: www.wto.org

Location: Geneva, Switzerland

Established: 1 January 1995

Created by: Uruguay Round negotiations (1986-

��)

Membership: 1�� countries

Director General: Pascal Lamy

Functions: administering WTO trade agreements,

forum for trade negotiations,

Handling trade disputes, monitoring national trade

policies, technical assistance for developing coun-

tries, cooperation with international organisations

What is the WTO?

< 12 >

the Economic Partnership AgreementS

A possible solution

With the expiration of the waiver in mind, the

Cotonou Agreement provided for the Negotiation

of Economic Partnership Agreements (EPAs)

between the EU and ACP states. These would

be negotiated with existing regional trade areas,

and aim to govern trade relations from the end of

the Cotonou Agreement onwards.

It is important to note that the Cotonou Agree-

ment was signed by all ACP states, including Ni-

geria, and the EPAs were specifically provided

for in the agreement. Nevertheless, no country will be forced to accept the EPA if they feel it is not in their

best interests. There are provisions in the Cotonou Agreement to investigate alternatives, but to date, no

ACP country has requested this.

This is partly because the EPAs are intended to be far more than trade agreements. Earlier trade regimes

have focused almost exclusively on trade aspects, customs duties and quotas, but this has proven to be

not enough to boost economic growth. Why? Over 98% of exports from West Africa already enter the EU

without the payment of customs duties. Despite this market access, the region is still unable to maintain its

market share, or diversify its exports.

The EPA approach is to concentrate first and foremost on building unified regional markets.

EPA and the WTO

The EPA will create a new trade regime which will

have to be compatible with the requirements of Article

XXIV of the General Agreement on Tariffs and Trade

(GATT) and Article V of the General Agreement on

Trade in Services (GATS). It is required that the ACP

liberalise towards the EU – but not immediately and

not on all imports. The details of the agreement are to

be negotiated and the parties will apply these flexibili-

ties to determine the extent and timetable for liberali-

sation.

< 1� >

How would it work?

The EPA promotes the creation of larger markets through its focus on regional integration. The West African

sub-region will have a single market instead of many fragmented markets. This larger market allows for

economies of scale, specialisation, and a more efficient allocation of resources. This can lead to increased

competitiveness that will make the markets more attractive to investment.

This is particularly true where a market is governed by a stable, transparent and predictable policy frame-

work. The European Union itself is a historic example – peace, security and stability are fundamental for

trade creation.

The region has set itself ambitious targets for opening up its markets: free movement of goods and estab-

lishment of a single common external tariff for the whole of the West African region. The EPA will support

these existing integration processes, and is not an alternative, nor an obstacle.

When the process of integration has advanced, a gradual and partial opening-up of West African markets to

European products will take place (at least 12 years or more). A well sequenced opening will boost economic

development, enhance consumer welfare by increasing purchasing power, make firms more competitive and

meet the legal obligations in the WTO. In return the EU has undertaken to give full market access to all ACP

states on all products as soon as the EPA is signed with a phase-in period for rice and sugar.

Two WTO compatible alternatives to the EPA

One is the ‘Enabling Clause’ that allows developed countries to grant unilateral trade preferences to developing countries. The problem with this is that it may be difficult to justify within the WTO a regime that applies only to the ACP (given their economic heterogeneity) or to design one that, if granted to many other countries too, would maintain the value to the ACP of the status quo.

A second is to obtain a new ‘waiver’ to succeed the one on which Cotonou is currently hung that expires in 2007. The problem with this is that waivers are more difficult to obtain than in the past as ’less-preferred’ developing countries are unwilling to acquiesce in their discrimination.

< 1� >

Nigeria and the EU

The EU believes that Nigeria could benefit greatly from an EPA. It provides the time and space to learn and

grow before having to deal with the full weight of global competition.

The EPA’s regional market provides an opportunity for countries like Nigeria to develop and strengthen their

commercial operations before accessing the global market. It will help firms develop their business, address

supply side constraints (such as expensive inputs), and provide excellent opportunities for diversification

and specialisation. The EPA’s stable and transparent rules will also encourage much needed investment.

The EU stands ready to support the negotiation and implementation of the EPA in the West African re-

gion. The EU is already providing development assistance under its existing regional programme, much of

which is focused on regional economic integration. Our new programme, commencing in 2008, has doubled

available funding to €477m (approx 82bn Naira)

over five years. In addition there is a €120m in-

centive tranche available, specifically to support

the EPA.

In concrete terms, the EU will support the upgrad-

ing of competitiveness of the West African econo-

mies, and will help to compensate for the short

term loss of tariff revenue associated with trade

liberalisation, before the longer term benefits are

felt. Technical assistance will also be provided to

implement the rules contained in the EPA. The EU

supports the creation of an EPA Regional Fund

for West Africa, managed by the region itself, which will channel and oversee EPA support

For more details of our development cooperation programme, please consult our website at http://www.deln-

ga.ec.europa.eu. Globally, the EU has also recently agreed to raise Aid for Trade to developing countries to

€2bn per year by 2010, much of which will be targeted to the ACP states and EPA related activities.

What will be the end result of these negotiations?

A single trade regime at the regional level, with com-

mon and modern custom procedures, that give suf-

ficient protection to larger markets enabling them to

expand as trade grows. To attain this, what matters is

the political will of EPA regions to cooperate internally

and respect their own intra-regional treaties. But we

stand ready to help.

Peter Mandelson, European Commissioner for Trade,

in a speech to the Joint Assembly, Bamako, 19 April

2005

< 15 >

the Future

Being part of the globalised economy is widely regarded as essential to eco-

nomic growth. The fact that Nigeria’s share of the global trade is reducing is

therefore a cause for great concern. Europe is, and will remain, an impor-

tant development and business partner for Nigeria. We believe that the EPA

could be an essential component of this partnership.

< 16 >

Fact or Fiction?Nigeria is being forced into something it is not prepared for and does not want

Nigeria is not being forced into anything. When signing the Cotonou Agreement, Nige-

ria agreed to negotiate an Economic Partnership Agreement. More importantly, if Nigeria

comes to the conclusion that the costs outweigh the benefits, then Nigeria can choose not

to sign.

Nigeria will lose large amounts in tariff revenue

Trade liberalisation will lead to lower tariffs and therefore a possible loss of revenue. In

response, the EU will be contributing to funds specifically designed to absorb the impact

of this loss of revenue.

In the case of Nigeria, tariff revenue is a small part of national income (5-6%). Lower tariffs

also mean that the incentive for smuggling is reduced, leading to an increase in official

imports, partly compensating for the revenue loss. Furthermore, liberalisation towards Eu-

rope will have a long transition period, giving time for other forms of revenue to be devel-

oped, such as VAT and companies tax.

It should also be remembered that one of the main aims of the EPA is to generate trade

- although tariffs will be lower in the transition to fully liberalised trade, the amount of

trade on which it is charged will be higher. Most importantly, trade itself brings wel-

fare gains which are far more significant than the small amounts gained from tariff

revenue - dynamic gains from increased economic activity, more jobs and lower prices for

consumers.

Nigeria will be flooded with goods from EU

It is true that opening up borders will allow more foreign made goods to be imported. How-

ever, EU exports to Nigeria and Nigerian products are very complementary, insofar as few

exports by the EU are also produced by Nigeria. There is thus little competition between

EU products and Nigerian products - in fact local industry should benefit from cheaper

input.

In addition, the EU is not seeking full reciprocity in market opening, and any new market ac-

cess requested would be subject to flexibilities and long transition periods. Trade liberalisa-

< 17 >

tion for European goods will have a long transition period – at least 12 years and probably

more – so it will be many years before Nigerian goods will have to compete with European

imports. WTO rules also allow for protection for sensitive industries and products. In return,

the EU will be offering full market access on all products with immediate effect.

We shouldn’t forget what imports actually are – goods which consumers want at a price

they can afford. Trade gives consumers more choice at lower prices.

Nigeria will not get any support from the EU to assist in the transition

The EU stands ready to support the negotiation and implementation of the EPA in the

West African region. The EU is already providing development assistance under its existing

regional programme, much of which is focused on regional economic integration. Our new

programme, commencing in 2008, has doubled available funding to €477m (approx 82bn

Naira) over five years. In addition there will be a topping up to the focal sector “economic in-

tegration and EPA” of the regional programme in order to reinforce support the EPA needs.

Globally, €2billion per year in aid for trade has been pledged by the European Commis-

sion and EU Member States, a substantial part of which will go to ACP countries ne-

gotiating EPAs. These funds will be additional to the European Development Fund.

Nigeria’s industries will collapse under the weight of competition

Nigeria’s industries will face more competition from other West African states, and some in-

dustries will have difficulties to meet the new requirements. There could thus be job losses,

at least in the short term. However, there will be the possibility to exclude a number of Nige-

rian sensitive products from the scope of liberalisation. In addition, the EU will be contrib-

uting to a programme for upgrading competitiveness of the sectors concerned by the EPA.

Nigerian firms will become more efficient through competition, and bigger through access

to larger markets and investment. The transition period of the EPA should allow them to

become bigger and more efficient in their regional markets, before being exposed to the

full force of global markets. Bigger, better regulated markets will also increase investment

– more capital means more growth and more jobs.

< 18 >

Nigeria does not need to decide now - there is time

Time is running out. The current regime is expiring end of 2007 and a new trading regime

needs to be negotiated if Nigeria is not to lose its preferences. Without these preferences,

Nigeria will have to immediately start competing on equal terms with other producers from

the rest of the world.

Nigeria does not need trade liberalisation - it can rely on oil

Continuing to rely on oil leaves Nigeria in a very precarious position (even if oil prices are at

an historic high) as the economy is extremely vulnerable to changes in the economics of the

oil sector. A more liberalised and diversified economy is not so sensitive to changes in the

price of a single commodity, allowing for better policy decisions and stable growth.

Nigeria should concentrate on providing for its own needs before sending goods

abroad

Providing for its own people is important, but production of certain products, and trading with

others for the rest, is more efficient and will lead to higher standards of living. No country has

ever developed by cutting itself off from trade -indeed most successful developing countries

have grown while gradually opening up their economies.

Nigeria does not need an agreement with just the EU - it should have a global agree-

ment.

Both regional and multilateral agreements are important. They should be seen as comple-

ments rather than substitutes. In the absence of a WTO agreement, the EPA is increasingly

important.

< 1� >

Frequently asked questions

What does the EU get out of the EPA?

The EPA is a development tool, and is aligned to the development objectives of the Cotonou

agreement – namely poverty eradication.

A larger and more prosperous Nigerian market is also in the interests of the rest of the world,

including the EU. A stable and diversified Nigerian economy is in the interests of the rest of

the world, including the EU. The political stability that economic growth brings is also in the

interests of all of us.

All of these advantages come as a result of Nigeria’s development, not at its expense.

Why can’t we just leave things as they are?

The economic and institutional environment has changed, and we must deal with these

changes. Trade and investment in West Africa must increase in the interests of faster growth,

job creation and sustainable development. A well designed EPA is an opportunity to achieve

this development. Current agreements with the EU provide access to Europe’s markets but

contribute too little to the West Africa’s economic competitiveness. They also depend on a

WTO waiver. Since that waiver expires in December 2007 and a new waiver would require

the agreement of all other WTO members and come at too high a price, an agreement com-

plying with WTO rules has to be concluded by 2007.

What if an EPA is not agreed by the deadline?

We could ask for another waiver, but it would be difficult to get, and in the meantime, exports

to Europe would be worse off. Nigeria would have to pay higher customs duties on an esti-

mated 15% of non oil exports to the EU, including shrimps, cocoa and textiles. This may lead

to Nigeria losing these export markets altogether, to lower cost competitors.

Even if a waiver were possible, other WTO members of the developing world are likely to

demand that they get similar preferential treatment for their exports.

But does this new arrangement have to be an EPA?

In theory, no. But after careful consideration the EU and the ACP states, including the West

< 20 >

African countries, have decided that this is the best option for linking trade policy and de-

velopment goals.

How will they be different from previous initiatives?

EPAs will draw on previous experience: (i) for full impact, trade cooperation must be pro-

moted within the ACP states, not just between the ACP and the EU (ii) the past has shown

that removing trade barriers and giving trade preferences is not enough. The EPAs com-

prehensive approach includes, for example, improvements to ACP production, supply and

trading capacities, the removal of non-tariff barriers, and the improvement of the investment

climate (iii) economic and trade cooperation is not an end in itself. It must be geared to

overall cooperation goals – namely sustainable development and poverty eradication.

Some people say the EPA is just a way for the EU to force open the markets of West

African countries. Is there any truth in this?

“Some people” are mistaken. The EU’s priority is to help West Africa make a success of

its regional integration, so boosting growth and making the region attractive to local and

foreign investors. It is on this basis, against a background of continuing access for West

African products to European markets, that African markets will open up. The arrange-

ments and timetable for opening up will be tailored to the region’s needs and development

factors, while bearing in mind the WTO rules for international trade. Selling more European

goods and services to West Africa is not a priority for the EU negotiators. Both sides to

these negotiations are pursuing the same overriding goal: development.

I’ve heard that government revenue will plummet if we lower our customs tariffs. Will

this not have an economic and social impact?

In Nigeria customs duties average about 6% of government revenue, about a third of it

from imports from the EU. So, even if duties on these imports were abolished overnight, the

budget impact would be limited. However, the EPA does not require cuts to be made over-

night. Instead it provides for the gradual and partial reduction of tariffs, allowing the time

< 21 >

needed for tax reforms to replace external revenue with domestic revenue, and to improve

tax collection methods. At the same time the EPA will boost economic activity, including im-

ports, and therefore government revenue. In the short term, the EU will also be contributing

to funds to help absorb the financial impact.

The EU’s very strict health standards for food imports constitute a de facto barrier for

West African producers. How can the EPA help here?

The EU health standards are indeed very strict, since they reflect the demands of European

consumers and safety requirements. The EPA will not change these standards or adapt

them to West Africa’s circumstances. It will, however, comprise technical and financial mea-

sures and support to help the region’s exporters meet the standards applicable, including

measures to build the region’s capacity to set and enforce health and other standards. After

all, healthy, safe food is as important to Nigerian consumers as it is to Europeans.

< 22 >

EU-Trade related Technical Assistance

Programme to support the Integration of the ACP states in the Multilateral Trading

System

> Objective:

Its objective is to provide trade-related technical assistance to African,

Caribbean and Pacific States, regions and non state actors.

> Contact details:

Programme Management Unit to Support the Integration of the ACP

States into the Multilateral Trading System (MTS)

rue Archimède 17 –1000 Brussels - Belgium

Tel: (+32 2) 282 03 33

Fax: (+32 2) 282 03 10

http://www.mtsacpeu.org

Capacity Building Programme in support of the preparation of Economic Partner-

ship Agreements (EPA)

> Objective:

The purpose of the Capacity Building Programme is to ensure that the

ACP States are well prepared to conduct the negotiations on EPAs.

> Contact details:

Project Management Unit

1�a avenue de Tervueren

1040 Brussels

Tel: (+32 2) 237 09 70

Fax: (+32 2) 237 09 70

http://www.euacpepa.org

The Trade.Com Facility Program

> Objective:

The specific objective of the Trade.Com Facility Program is to improve the ca-

< 23 >

> Contact details:

Trade.Com Facility Programme, PMU

20, rue des Gaulois

1040 Brussels

http://www.tradecom-acpeu.org/eng.htm

Centre for Development of Enterprise

> Objective:

The mission assigned to the CDE under the Cotonou Agreement is to contribute to

poverty reduction by fostering wealth creation by lending support to the various types

of operator that make up the private sector in the ACP countries; in this role it draws

extensively on the capabilities of enterprises in EU countries.

> Contact details:

CDE

52 avenue Herrmann-Debroux

1160 Brussels, Belgium

Tel: (+32 2) 679 18 11

Fax: (+32 2) 675 26 03 and (+32 2) 679 18 31

http://www.cde.int/

Pro€Invest

> Objective:

The Pro€Invest objective is to promote investment and technology flows to enterprises

operating within key sectors in the ACP States. This will be achieved through a two dimen-

pacity of ACP countries and regional organisations to design and implement their own

trade strategies and effectively participate in international trade negotiations. As a

result, the ACP member states will also be able to formulate effective strategies for

negotiation strategies on trade matters.

< 24 >

sional approach: to support intermediary organisations and professional associations

and to develop inter-enterprise partnerships.

> Contact details:

Pro€Invest Management Unit

Centre for the Development of Enterprise (CDE)

avenue Herrmann-Debroux 52

B-1160 Brussels

Belgium

Tel: (+32 2) 679 18 50/51

Fax: (+32 2) 679 18 70

http://www.proinvest-eu.org

SEM International Associates Limited

�th Floor, Trust Towers, Farrar Avenue

P.O.Box CT2069

Accra, Ghana

Tel: (+233) 21 240664/5

Fax: (+233) 21 240666

Email: proinvest@semfinancial.com

Contact: Sam Mensah and/or Ebenezer A. Barnes

Strengthening Fishery Products Health Conditions in ACP/OCT Countries

> Objective:

The general objective is to make the best use of ACP fish resources by strengthening

their production and external marketing capacities (Cotonou Agreement Article ��.�).

The aim is to facilitate access for local fishery products to the global market by du

rably strengthening health surveillance systems for export and production conditions

in all beneficiary countries. It should be stressed that fish products from small-

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scale fisheries are taken into account in a significant way; this can be seen further on in

the description of activities.

> Contact details:

PMU - Strengthening Fishery Products Health Conditions in ACP/OCT

Countries

c/o CDE

52 av. Herrmann Debroux

B-1160 Bruxelles

Belgium

Tel: (+32 2) 679 18 65

Fax: (+32 2) 679 18 73

http://www.sfp-acp.org

Pesticides Initiative Programme

> Objective:

The PIP intends to respond to applications from private companies in the ACP fresh

fruit and vegetable export sector to the European Union. They are confronted with

strengthening of European buyers’ requirements in terms of food safety (pesticide resi-

dues) and traceability.

The PIP programme became operational on 11 July 2001, based on a five-year

funding contract in the amount of € 28,807,000. COLEACP set up a Management Unit

in Brussels. For the Programme’s strategic orientation, COLEACP takes into account

the recommendations of the Consultative Committee composed of representatives of

the sector and technical and regulatory experts. The ACP Group of States, the European

Commission and the COLEACP Board of Directors are also represented in the Commit-

tee

> Contact details:

COLEACP-PIP

rue du Trône, 98 (box 3)

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B-1050 Brussels

Belgium

Fax: (+32 2) 514 06 32

http://www.coleacp.org/

EU ACP Microfinance Framework Programme

> Objective:

The Microfinance Framework Programme was launched to help the poor

in ACP countries get better access to appropriate financial products

and services. The Programme is taking a three pronged approach to

improve the effectiveness of microfinance operations in ACP countries:

by strengthening the capacity of microfinance actors; supporting micro-

finance ratings and improving efficiencies and transparency in the micro-

finance market.

> Contact details:

http://ec.europa.eu/europeaid/where/acp/regional-cooperation/microfinance/index_

en.htm

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Glossary and acronyms

Absolute Advantage

ACP

Autarky

Comparative Advantage

Cotonou Agreement

Customs duty

Customs Union

EBA

Economies of Scale

When a country is able to produce a good more efficiently than another country it has an Absolute Advantage: that is, assuming equal inputs, the country with an Absolute Advantage will have a greater output (see also Comparative Advantage).

African, Caribbean and Pacific States a group of 77 states with a partnership agreement with Europe (the Cotonou Agreement).

An autarky is an economy that minimises trade with the outside world and relies entirely on its own resources. Also called a closed economy.

The theory explains why it can be beneficial for two to trade, even though one of the producers may be able to produce every kind of item more cheaply than the other. What mat-ters is not the absolute cost of production, but rather the comparison between ‘how easily’ the two countries can produce different kind of goods. ‘How easily’ can be under-stood as the Opportunity Cost of producing this good rather than another (see also Absolute Advantage).

Partnership Agreement between the EU and the ACP states signed in 2000 at Cotonou, Benin.

A duty or charge on imports.

A customs union is a Free Trade Area with a Common External Tariff. Objectives in establishing a customs union often include increasing economic efficiency and establish-ing closer political ties between the member states.

Everything But Arms: the European Community initiative granting LDCs full duty free access to its market without any quantitative limits whatsoever.

Economies of Scale refer to a situation where an increase of input factors will lead to a larger than one-to-one increase

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ECOWAS

EDF

EIB

EPA

EU

Free Trade Area

GATT

GDP

GSP

LDC

Lomé Convention

Most Favored Nation

in output. The production cost per unit falls as the quantity increases.

Economic Community of West African States

European Development Fund, the EU development financ-ing mechanism for the ACP under the Cotonou Agreement.

European Investment Bank

Economic Partnership Agreement

European Union

A Free Trade Area is an area where a group of countries have agreed to eliminate tariffs, quotas and preferences on substantially all trade.

General Agreement on Tariffs and Trade

Gross Domestic Product

The Generalised System of Preferences is a formal system of exemption from the more general rules of the WTO. Spe-cifically, it’s a system of exemption from the MFN principle. GSP exempts WTO member countries from MFN for the purpose of lowering tariffs for developing countries (without the need to do the same for developed countries).

Least Developed Country

Predecessor to the Cotonou Agreement signed in Lomé, Togo.

Most Favoured Nation (MFN) is a status accorded by one nation to another in international trade. It means that the re-ceiving nation will be granted all the trade advantages, such as low tariffs, that any third nation also receives. In essence, MFN requires WTO member countries to treat imports com-

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Non Tariff Barriers

Opportunity Cost

Quota

RPTF

Single market

SPS

Trade Creation

Trade Diversion

Non Tariff Barriers to trade are restrictions to imports that do not entail a tariff. A common example is restrictions based on the manufacturing or production requirements of goods, such as how an animal is caught or a plant is grown, with an import ban imposed on products that don’t meet the require-ments. Some non-tariff trade barriers are expressly permit-ted in very limited circumstances, such as to protect health, safety, sanitation, or natural resources.

The cost of something in terms of opportunity foregone. The Opportunity Cost to a country of producing a unit more of a good, such as for export or to replace an import, is the quantity of some other good that could have been produced instead.

A limit on the quantity of goods that can be imported.

Regional Preparatory Task Force, the body responsible for linking the EPA negotiations to development financing.

A single market is a Customs Union with common policies on product regulation, and freedom of movement of all the four factors of production (goods, services, capital and labour).

Sanitary and Phytosanitary Standards, measures to protect human, animal and plant health and life.

Trade Creation refers to a situation when a customs union is formed and trade increases thanks to the fact that it is now easier to trade.

Trade Diversion refers to a situation when a customs union is formed and trade is diverted from a country outside the customs union to a country within the customs union.

ing from all other WTO member countries equally, that is, by imposing equal tariffs on them, etc.

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Trade in goods

Trade in services

UEMOA

WTO

Trade in physical goods such as agricultural products and machinery.

Trade in services such as insurance, training and marketing.

Union Economique et Monétaire Ouest Africaine - West African Economic and Monetary Union

World Trade Organisation

http://ec.europa.eu/trade/issues/bilateral/regions/acp/index_en.htmhttp://ec.europa.eu/trade/issues/bilateral/regions/acp/index_en.htm

NG

-78-07-093-EN

-C