Notes and Memoranda: Some Aspects of Common Market Trade with Africa

By JACQUELINE MATTHEWSMISGIVINGS HAVE BEEN expressed regarding the Association*(1) agreements between the European Economic Community andcertain African countries, because of their apparent opposition to the rules of the General Agreement on Tariffs and Trade. Themain purpose of this paper is to discuss this problem, in view of the possibility of South Africa entering into such an agreement, ifBritain joins the Common Market.In a recent article dealing with the Nigerian Association with the EEC, Soper*(2) suggested (a) that these agreements contradict theGATT rule of non-discrimination, and (b) that the EEC should not expect reciprocity from the less-developed associated countries.These criticisms will be examined in the first part of this paper.A comparison between the external trade of Francophone and Anglophone*(3) Africa was also made in Soper's article, and reasonswere given for the closer commercial links existing between France and Francophone Africa. An alternative explanation will beconsidered in the second part of this paper.

I. Eec Association Agreements and Gatt(a) The principle of non-discriminationThe Treaty of Rome, 1957, which established the European Economic Community or Common Market, provided for an Associationbetween the EEC and overseas territories. Four such agreements have since been signed: the Yaounde Convention in 1963*(4) with18 Francophone territories of Africa; the Lagos Convention in 1966, with Nigeria; more recently, the Arusha agreement with theEast African territories of Kenya, Tanzania and Uganda in July 1968; and in March 1969 the Tunis and Rabat agreements withTunisia and Morocco respectively.

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Although there are some differences between these agreements (for example, the institutions set up by the Yaounde Conventionbinds the '18' more closely to the EEC) the principle is the same: free entry into the Common Market for most products of theless-developed countries (duty-free quotas in some cases), and in exchange, some tariff reductions on EEC products entering theassociated territories.*(5)As expressed by Soper, "a new preferential arrangement has been set up"*(6) and this has been viewed critically by those who feelthat it contradicts the principles of GATT.The Association between the EEC and the less-developed countries of Africa can be regarded as another Commonwealth. One ofthe main advantages of membership of the British Commonwealth, from the point of view of trade, was the system of preferentialtariffs, although in some cases this was precluded by other arrangements, such as the Congo Basin Treaties in Kenya and Uganda.The principle established by the Ottawa Conference of 1932 was nevertheless reciprocal preferential treatment.Yet Britain could support GATT's principle of non-discrimination, because art. I of the General Agreement specifically authorisedtariff preferences of long-standing, so that existing preferences were allowed, but new ones were forbidden. Thus, preferencesbetween Commonwealth nations, between members of the French Union, and others, were allowed to remain, despite themost-favoured-nation clause of GATT, i.e. equality of treatment in customs matters, between Contracting Parties.Bearing this in mind, one can question Soper's statement that: "It is thus hardly surprising that Britain, when she first knew of theEEC Association arrangements in the late 1950's, was opposed to them."*(7) Was Britain really in a position to oppose preferentialarrangements essentially similar to those of the British Commonwealth?Soper pointed out that the "new preferential arrangement . . . seems to be neither a common market nor a free trade area and . . . thusconflicts with the rules of the GATT".*(8) It is suggested here that the EEC Association arrangements may be against the letter,but not against the spirit of GATT.The General Agreement on Tariffs and Trade, established in 1947, stands for liberalisation of trade and non-discrimination. But astudy of art. XXIV, sec. 5, suggests that the former is the more important of the two aims. It allows for the establishment of `acustoms union or of a free-trade area or the adoption of an interim agreement necessary for the formation of a customs union or of afree-trade area' under certain conditions. These are 'that the duties and other regulations of commerce . . . applicable to the trade ofcontracting parties not included in the . . . union or agreement, shall not on the whole be higher or more restrictive than

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before'. Customs unions and such agreements liberalise trade between members of the union, and discriminate againstnon-members. Thus, GATT allows a certain amount of discrimination, when this is accompanied by trade liberalisation andprovided that tariffs against outsiders are not increased. It seems reasonable to conclude, therefore, that liberalisation of trade, in

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the form of tariff concessions, is more important to the Contracting Parties of GATT than non-discrimination.Preferential treatment introduced by reducing tariffs between members of an agreement should be viewed differently from apreference established by raising tariffs against third countries. The four Association agreements of the EEC did not lead to a risein tariffs against outsiders and they liberalised trade to a certain extent between the EEC and some less-developed countries ofAfrica. Although these arrangements are not specifically mentioned in art. XXIV, they are sufficiently similar to an `interimagreement' to assume that the Contracting Parties to GATT could not reasonably single them out as being against the spirit of theGeneral Agreement.(b) The principle of reciprocityEEC Association agreements with under-developed countries have been criticised because the Common Market expects somereciprocity in tariff concessions. This could be regarded as contrary to art. XXXVI (sec. 8) of Part IV of GATT, which reads:'The developed contracting parties do not expect reciprocity for commitments made by them in trade negotiations, to reduce orremove tariffs and other barriers to the trade of less-developed contracting parties'.It is understandable that Nigeria was reluctant to agree to tariff reductions for EEC products, in the Lagos Convention, asexpressed by Nigeria's leading negotiator.*(9) It must be remembered, however, that in this case, as in the Arusha agreement, thereciprocity was `nominal and token'.*(10)Whether art. XXXVI (sec. 8) refers to full reciprocity or to any degree of reciprocity is open to doubt. The Common Marketcountries could therefore argue that token reciprocity is not essentially against the rules of GATT, and that some concession bythe other party transforms the agreement into a more authentic form of Association.It is too early to assess the impact of these agreements on the external trade of the countries involved. They must be regarded aspart of a trend towards economic groupings prevalent in Africa today.*(11)A development which may further affect African exports to Europe is the scheme recently agreed to by the EEC:'They are offering to grant tariff-free entry, within quotas fixed product by product, for imports from all developing countries ofmanufactures and

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semi-manufactures, and tariff preferences for agreed quantities of their processed farm products'.*(12) This is in accordance withthe appeal to the industrialised nations of the world by the United Nations Conference on Trade and Development (UNCTAD), in1968, to grant developing countries generalised tariff preferences.

II. Commercial Ties Between France and Francophone AfricaAttention was drawn by Soper to the fact that Francophone African territories have been, and have remained, in closer commercialcontact with France, than the Anglophone African countries, with Britain. The reasons offered are "the power of the Frenchlanguage, familiarity with French commercial and administrative procedure and laws, an established taste for French products,"etc.*(13)However, similar reasons probably account for the fact that Britain is often the main trading partner of Commonwealth Africancountries. To explain the closer links between France and ex-French territories, one must look elsewhere, and it is suggested herethat two important factors are:(a) The existence of a world-wide Commonwealth; and(b) The Congo Basin Treaties.*(14)(a) As members of the Commonwealth, Anglophone African territories have for many years been members of a large group ofnations in various parts of the world. Thus certain links were formed with other countries besides Britain, due to a uniformlanguage, similar institutions and many other historical, social and administrative contacts. This increased the diversity of theirexternal trade, thus reducing Britain's share. The French territories, on the other hand, did not experience this 'universality'. MostFrench possessions were in Africa, and, apart from North Africa, at a similar stage of economic development. They were also moreclosely linked to France, from the point of view of administration. This resulted in a certain isolation with regard to external trade,since there was less incentive to trade with other countries besides France.(b) The other factor-the Congo Basin Treaties-is mentioned in Soper's article, but in a way which may suggest that there was achoice between free trade and discrimination,*(15) whereas, for a substantial part of Commonwealth Africa, there was no choice.Kenya, Uganda, Tanzania, Malawi and part of Zambia were subject to the 'open door policy' of the Congo Basin Treaties, andtherefore were prohibited by international agreement from establishing reciprocal preferences with Britain. The Mandatessystem-later the Trusteeship system-also forbade preferences in the Cameroons and Togoland.If we compare this with Francophone Africa, only a small part of the French

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colonies (namely the south-eastern part of French Equatorial Africa) were in the so-called Conventional Basin of the Congo, andFrance was therefore free to establish preferential treatment with most of her overseas territories, except with the French Mandatesof Togoland and the Cameroons.Without the Congo Basin Treaties, it is probable that Imperial or Common-wealth preference would have been introduced in EastAfrica, and this may have altered substantially the pattern of their external trade.University of Natal, Durban.July, 1969.

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Endnotes1 Article 131 of the Treaty of Rome reads: "The Member States hereby agree to bring into association with the Community thenon-European countries and territories which have special relations with Belgium, France, Italy and the Netherlands." This waslater extended to other territories who wished to become associated with the EEC.

2 Tom Soper, "A note on European trade with Africa", African Affairs, Vol. 67, no. 267, April 1968, pp. 144-151.

3 Francophone and Anglophone Africa refer to French-speaking and English-speaking African countries, respectively.

4 This was in fact the second Convention. The first convention, drawn up in 1957, preceded the independence of 'the 18', as they arecommonly called namely Mauretania, Senegal, Mali, Upper Volta, Ivory Coast, Togo, Dahomey, Niger, Chad, Cameroun, Central.Áfrican Republic, Gabon, Congo Brazza, Congo Kinshasa, Rwanda, Burundi, Somalia and Madagascar.

5 For a comprehensive survey of the background to the EEC Association agreements, see J. J. van der Lee, "Relations between EECand African States," African Affairs, Vol. 66, July 1967, pp. 197-212.

6Soper, op. cit., p. 147.

7 Soper, op. cit., p. 149.

8 Soper, op. cit., p. 147.

9 P. N. C. Okigbo, "Africa and the Common Market" (Longmans, 1967), pp. 167-168.

10 P. N. C. Okigbo, op. cit, p. 121.

11 Peter Robson, "Economic integration in Africa", European Community, March 1969, pp. 14-16.

12 European Community, May 1969, p. 17.

13 Soper, op. cit., p. 146.

14 The Berlin Act of 1885, the Declaration of Brussels of 1890, and the Convention of St. Germain-en-Laye of 1919 constitute what iscommonly known as the Congo Basin Treaties. See Jacqueline Matthews, "Free trade and the Congo Basin Treaties", SAJE 1959v27(4) p293-300. (Map on p. 294).

15 "Commonwealth Africa has developed much more on a free-trade basis in the spirit of the Congo Basin Treaties than hasFrancophone Africa", op. cit., p. 146.

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