Afin d’aplanir les divergences de point de vue en matière de commerce international : La Chambre de commerce et d’industrie du Mali initie une rencontre d’échange entre les différents acteurs

The unforeseen Consequences of the Continental African Free Trade Area.Proposals for strengthening the African economic integration process.Document intact Louis Sangare Introduction African countries have established a Continental Free Trade Area (CFTA) to boost inter-country and inter- regional trade within the continent. However, this Economic Partnership Agreements (EPAs) between African States and European Union, appear to facilitate the easy importation of goods from the EU member countries, and drive profits away from small and much less efficient African producers to cheaper European imports. Hence, far from encouraging African production, the CFTA unintentionally jeopardizes the continent’s economic well-being and future economic growth. The importation of European products into Africa is favorable under two circumstances: 1) When these products do not compete domestically with the products of African countries, there is no negative effect on the economic integration process. 2) When they have competitive prices, these EU products contribute to economic welfare gains. But when they are cheap goods exported by EU traders, they can undermine African local production or displace more competitive producers in other parts of the world market. One significant concern that must not be overlooked is how the Economic Partnership Agreements (EPAs) between the EU and African countries will affect the outcomes of the CFTA in promoting intra-African trade. Under the EU’s Economic Partnership Agreements (EPAs), regional groupings of African countries and EU member States offer reciprocal trade preferences to each other. This opening up of the markets of small, inefficient African economies to EU exports will displace domestic production and generate adverse effects. It will also result in a loss of revenue for ACP countries due to the elimination of tariffs on EU imports. The main objectives of regional economic integration are: increasing inter-country trade, the expansion of the size of regional markets, and attracting foreign direct investment to these larger trading entities. However, since the EU is more competitive, the integration of small African countries with larger developed EU nations will promote a beneficial trade creation in favor of the European Union. Because CFTA countries can import goods more cheaply from more efficient extra regional suppliers than they can from their own inefficient manufacturers, there will be trade diversion in favor of the EU, leading to welfare losses for African countries. The long term adverse effects will be even more destructive for Africa. 1-The Potential Impact of the Continental Free Trade Area on Africa’s Integration and Development Prospects Given the large spectrum of production of EU countries, a broad array of European goods, ranging from cereals and livestock to metal products and transport equipment, will have access to the African markets. The production and trade capacities of EU and African nations are totally asymmetric. For example, while 20% EU exports go to eastern and southern African countries, these countries account for only 0.1% of total European imports. West Africa account for 0.5% of European imports. European exports comprise mainly manufacture items, capital goods, fuels, and foods stuffs, while African exports are confined to a narrow range of primary products. Due to this disparity, EPAs based on reciprocity, with their ensuing tariff cuts would benefit the EU. Its export gains would exceed by far any gains Africa could potentially make. In terms of the economic integration process, EPAs would lead to trade diversion from Africa, with adverse effects on intra-African commerce. Their impact on African countries’ real income would be negative due to the significant decline in tariff revenues. The importation of goods from the EU would increase dramatically, while African exports to the EU would only increase slightly. The lack of coordination of EPA provisions within the African Union’s economic space could jeopardize the adoption of the EU’s Common External Tariff, (CET), which could derail the African economic integration process. Unilateral preferences discourage food self-sufficiency in Africa, slow down the pace of diversification, and distort or dislocate fragile industrial structures. The high trade costs due to lack of heavy transport systems could make imported goods even more expensive and nullify the gains of African countries. Reducing trade barriers in favor of the more developed EU member countries across all the territories of the African Union, even though these countries are more developed competitors, will result in slower economic growth in Africa. Indeed, the past economic relations between Africa and the EU attest to the poor effect of aid on economic prosperity and the neglect of critical sector development, such as manufacturing, heavy transport systems, constructing a regional

The Consequences of the Continental African Free Trade Area African countries have established a Continental Free Trade Area (CFTA) to boost inter-country and inter=regional trade within the continent. However, this Economic Partnership Agreements (EPAs) between African States and European Union, appear to facilitate the easy importation of goods from the EU which is at broader reach, and drive profits away from small and much less efficient African producers to cheaper European imports. Hence, far from encouraging African production, the CFTA unintentionally jeopardizes the continent’s economic well-being and future economic growth. The importation of European products into Africa is favorable under two circumstances: 1) When these products do not compete domestically with the products of African countries, there is no negative effect on the economic integration process. 2) When they have competitive prices, these EU products contribute to economic welfare gains. But when they are cheap goods exported by EU traders, they can undermine African local production or displace more competitive producers in other parts of the world market. One significant concern that must not be overlooked is how the Economic Partnership Agreements (EPAs) between the EU and African countries will affect the outcomes of the CFTA in promoting intra-African trade. Under the EU’s Economic Partnership Agreements (EPAs), regional groupings of African countries and EU member States offer reciprocal trade preferences to each other. This opening up of the markets of small, inefficient African economies to EU exports will displace domestic production and generate adverse effects. It will also result in a loss of revenue for ACP countries due to the elimination of tariffs on EU imports. The main objectives of regional economic integration are increasing inter-country trade, the expansion of the size of regional markets, and attracting foreign direct investment to these larger trading entities. However, since the EU is more competitive, the integration of small African countries with larger developed EU nations will promote a beneficial trade creation in favor of the European Union. Because CFTA countries can import goods more cheaply from more efficient extra regional suppliers than they can from their own inefficient manufacturers, trade will be trade diverted to the EU, leading to welfare losses for African countries. The long term adverse effects will be even more destructive for Africa. The Potential Impact of the Continental Free Trade Area on Africa’s Integration and Development Prospects Given the large spectrum of production of EU countries, a broad array of European goods, ranging from cereals and livestock to metal products and transport equipment, will have access to the African markets. The production and trade capacities of EU and African nations are totally asymmetric. For example, while 20% EU exports go to eastern and southern African countries, these countries account for only 0.1% of total European imports. West Africa account for 0.5% of European imports. European exports comprise mainly manufacture items, capital goods, fuels, and foods stuffs, while African exports are confined to a narrow range of primary products. Due to this disparity, EPAs based on reciprocity, with their ensuing tariff cuts would benefit the EU. Its export gains would exceed by far any gains Africa could potentially make. In terms of the economic integration process, EPAs would lead to trade diversion from Africa, with adverse effects on intra-African commerce. Their impact on African countries’ real income would be negative due to the significant decline in tariff revenues. The importation of goods from the EU would increase dramatically, while African exports to the EU would only increase slightly. The lack of coordination of EPA provisions within the African Union’s economic space could jeopardize the adoption of the EU’s Common External Tariff, (CET), which could derail the African economic integration process. Unilateral preferences discourage food self-sufficiency in Africa, slow down the pace of diversification, and distort or dislocate fragile industrial structures. The high trade costs due to lack of heavy transport systems could make imported goods even more expensive and nullify the gains of African countries. Reducing trade barriers due to the more developed EU The Creation of a common market for a full-fledged integrated regional industrial structure Simultaneously, the same approach will be adopted for the integrated industrial development of each regional community. The industrial base will be composed of the processing chains of four intermediary industries: iron and steel, bauxite, alumina and aluminum, and chemicals and petro-chemicals. Related studies will be conducted in conjunction with the promotion of these vital sub-industrial programs to determine: - The definition of African multinational indust