Analytical Note, October 2013
Ratification of the Economic Partnership Agreement: The Case of Cameroon
This Note looks at the Costs and Benefits of an EPA for Cameroon if it would ratify the interim-EPA.
The main benefit of the EPA would be the avoidance of duties that EU importers would have to pay. If Cameroon would fall back to EU GSP, these duties would amount to USD 42.5 million / year (top-30 exports under EU GSP). In the case of the GSP+, only two key products will face tariffs: bananas and malt extract/food preparation with low cocoa contents.
The products that could be displaced by EU imports after ratification of EPA include: petroleum-derived products, products that serve the petroleum industry, packaging material (e.g. boxes, bottles), soups, cement, batteries and light manufacturing products from the iron/steel industry, among others.
In 2014, Cameroon would face a tariff revenue loss of USD 77 million (more than 37 CFAF billion), if it would ratify the EPA. This figure would increase to over USD 230 million per year (around 113 CFAF billion) by the end of the implementation period.
Cameroon should not ratify EPAs out of fear or pressure of time geared towards averting the risk of trade disruption as there are bigger issues such as the country’s existing industries as well as industries that could be developed in the future at stake. Cameroon’s primary focus must be to maintain the policy flexibilities they need for their development and the building of their production capacities. Importantly, Cameroon, alongside other CEMAC states should focus on other alternatives to EPAs and policies to boost both intra-African and South-South trade.
This article was tagged: Agriculture, Economic Partnership Agreements (EPAs), Most Favoured Nation (MFN), Subsidies, Tariffs, World Trade Organization (WTO)