Little notes on the story of African Caribbean Pacific – European Union agreements

Treaty of Rome 1957- It was this treaty that associated trade and commerce of manyACP countries with Europe until independence occurred

Yaoundé I and II 1963, 1969

Lomé I 1975 - Had a focus on agriculture development and infrastructure financing, it introduced STABEX (a system for guaranteeing agricultural revenues)

Lomé II 1980 – More profound, it introduced SYSMIN, a trade mechanism for mining products

Lomé III 1985 – it introduced a political dimension, it also added aid efficiency

Lomé IV 1990 – reinforced the political dimension, it introduced the principle of conditionality

Cotonou 2000 - It tried to take into account the importance of new actors in the international system. This new deal tried to fight the disinterest of the EU regarding Africa in detriment of central and eastern Europe

Economic Partnership Agreements 2008 - Cotonou has been substituted by Economic Partnership Agreements since it expired in 2007 in countries like the Cote d’Ivoire. A regional deal was aspired to but failed so these EPAs are currently temporary and bilateral in nature.

Generally, the upsides of these trade agreement with the EU for developing countries are greater competitiveness, greater fluxes of EU investment and greater volumes of commerce. The downside usually resides with the opening up of markets to EU products and the possible inability of local commerce and industry to compete with these imports.

Insights from UNIWAX into doing business in Cote d'Ivoire

UNIWAX was created in 1968, it is part of the Gama Holding Groups as are for example Vlisco and GTP.

UNIWAX’s competition rests of course with the other brands of the GAMA holding groups who target however slightly different market segments. In the last few years the company has felt first hand competition from Chinese imports to Cote d’Ivoire. From all the different Gama holding brands in West Africa, UNIWAX was quickly the brand the most copied by the Chinese. Why? Because it corresponded more to the target-market within the reach of cheaper forgery than it was for example the VLISCO brand, one which targets higher-end consumers. These consumers with greater purchasing power are more copy-adverse. In the case of UNIWAX’s market segment, price competition is more important. When Chinese copies could be purchased by a third or a fourth of the price UNIWAX started running into trouble, even if the quality of these pieces was not so good. The company has even run a campaign against counterfeit products. In this campaign it tried to show consumers the differences between our real wax prints and counterfeit copies.

At the same time African consumers have now started to take notice of this and are becoming more demanding as they realize they can actually save money by buying a product with more quality that lasts for longer. In addition, the trend is for international regulation when it comes to quality standards in exported textiles to be strengthened. Increasingly Chinese businesses exporting counterfeit products will not be able to do whatever they want. Stronger regulation will only favor a company like UNIWAX.

At the end of the 1990s, Cote d’Ivoire went through a crisis, with the fall in cocoa prices, UNIWAX endured through all these stuff conditions, including the crisis in 2002 and the big crisis in 2004. UNIWAX registered positive growth even throughout these tough challenges. The strategy of the company passes through offering the consumer a product of quality loaded with maximum creativity. UNIWAX has the first centre for wax prints design in Western Africa, it creates 2000 designs per year. The company also sees as central to always seek the best price-quality ratio, adapting to the lower purchasing power in Africa. Distribution is also a focus now, Cote d’Ivoire is set to be used as a distribution platform for the region.

Regarding the Economic Partnership Agreement with the European Union, this agreement will not be particularly beneficial to UNIWAX. In fact, there is the risk that some Chinese companies or other unethical exporters and businessmen take advantage of the deal to export zero-tariff to Europe by stopping by Cote d’Ivoire and “trade launder” their goods. This already happens as well the other way around. There are products that arrive to Cote d’Ivoire from China via Germany, with German labels.

From 2006 to 2008 UNIWAX has had a positive outlook with important investments being made. The company’s headquarters is large, well-organized one can tell from visiting it that it looks after its workers; it even has a health center on the factory site exclusive for them.

The signing of the Côte d’Ivoire-European Union Economic Partnership Agreement

The drivers of the economic growth of ECOWAS area are, among others, employment and investment. The potential is there with a market of 300 million people, vast natural riches and considerable geostrategic importance. For now and after some markedly turbulent years with political conflict around the whole region, ECOWAS now seeks above all stability. A stability that is a pre-condition to any attempt at integration. 2009 will be a landmark year for the economic history of the region as free circulation of its citizens is expected to come into place.

It was the final objective of the EU and Cote d’Ivoire officials have worked in the terms of the Economic Partnership Agreement (EPA) with the whole region, such was not possible. Catherine Ashton, European Trade Commissioner was not at the signing of the EPA and it was in fact the French ambassador in Cote d´Ivoire, M. André Janier, signing on behalf of the EU and Mr. Koné Amadou, Minister of Integration and a key player in the success of the negotiation. It remains unclear if the absence of Catherine Ashton was a sign of a certain lack of appreciation by the EU Commission of the significance of the agreement. Messieur André Janier brought attention to three particular points: first that the EU remains, by far, the first commercial partner of the Cote d’Ivoire; secondly, that the deal represented a win-win situation for the two trade partners; thirdly, that all the key forces of the Cote d’Ivoire had participated in the negotiation process, including representatives from Civil Society.

The deal itself will allow Cote d’Ivoire, one of three non-LDC countries in West Africa (Ghana, Cote d’Ivoire and Nigeria), to keep exporting to the EU at zero-tariff. In return the Cote d’Ivoire will be progressively opening its markets over the next 15 years to European products, progressively complying to the guidelines of the World Trade Organization. The deal has been divisive of African political opinion with some considerable voices, such as Cameroon, condemning the deal as being European-dominated. The group of Least Developed Countries however have less to worry about than non-LDC countries since they benefit from the “everything but arms deal”, an accord that circumvents the zero-tariff inclining tendencies promoted by the WTO and gives the opportunity for this group of countries to keep exporting at zero-tariff to the EU market. Koné Amadou, Cote d’Ivoire’s minister of Integration expects the deal to accelerate the sub-regional and regional integration of West Africa but also recognizes that there have been difficulties regarding the implementation of the free circulation of people and products.