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Conclusion


This chapter is divided into two parts. The first part demonstrates the relationship between the EPA and domestic political survival in West Africa. West African countries negotiated and signed EPAs in an effort to maintain the trade advantages of the Lomé Convention, the absence of which would eradicate certain export sectors in Ghana and Cote d’Ivoire and in turn pose a threat to ruling political elites (given the link between political and economic order). The absence of this dependency in Nigeria delayed the acceptance of the regional EPA. Although some scholars have stressed the importance of transnational factors, such as advocacy groups, to the apparent limitation of EU market power, it was the absence of Lomé-sustained sectors in Nigeria that led to the initial rejection and subsequent prolongation of the negotiation process. Nigeria later agreed to sign the trade system following a massive increase in financial aid and, more importantly, due to the fear that refusal to sign the trade agreement would lead to the disintegration of the ECOWAS region.

The advantages of the EPA are unclear, especially for Nigeria. There has been no increase in market access; on the contrary, preferences that the EPA was signed to preserve have been eroded. Unrelated developments in the EU have further reduced these preferential advantages. A reduction in GSP accompanied by a change in standard in the early 2000s led to the extirpation of the West African pineapple sector. In this chapter, the examples of the banana and fishery sectors are used to demonstrate the gradual erosion of the trade preferences that the EPA was signed to preserve. The ultimate outcome of the liberalisation process will be assessed in future studies, but the pattern of preference erosion is clear at this point.

In the long term, the erosion of the preferences provided for suboptimal sectors could positively affect West African countries in terms of local resource allocation or the selection of sectors for development. With the complete erosion of these preferences, factors will have to be reallocated to better and higher-performing sectors, not on the basis of EU trade protection but in light of other considerations, such as local factor endowment or increasing demand. In Côte d’Ivoire, bananas and pineapples have been produced since the end of the colonial era, yet these products have never been internationally competitive. Their collapse could bode well for West Africa in terms of factor reallocation to promising sectors. The World Bank argued that the collapse of the pineapple sector following changes in EU market arrangements in 2002 led the government of Côte d’Ivoire to find a replacement: cashew nuts. Whereas Ivorian pineapples have not been competitive outside the protected environment of the EU since the late 1950s, cashew nuts represent an organic sector whose survival is not dependent on artificial trade or price advantages. The destination of cashews is Asia (India and Vietnam), and within a short time Côte d’Ivoire has become the world’s second largest exporter of cashew nuts.

As shown above, a reduction in the protection provided by the Lomé trade systems will force West African countries to diversify into other systems of specialisation. However, the EPA has also reduced the space for diversification. This led Nigeria (to the irritation of the EU and other ECOWAS countries) to reconsider the ratification and implementation of the EPA at the national level. More than two years after the regional agreement was completed and signed, the most populous West African country refused to sign a national EPA due to the recent reduction in the price of crude oil and the consequent necessity for diversification.



The EPA greatly reduces individual countries’ opportunities to diversify, due not only to the liberalisation of 75 percent of imports from the EU but also to the internal restructuring created by the regional exclusion lists. The products on the exclusion lists, which are often cited by the EU to counter the accusation of limiting diversification, were chosen specifically to protect existing production system, and thus cannot be regarded as conducive to diversification. Furthermore, in excluded products in which one West African country has obtained a production advantage (through years of protection, for example), such advantages may be eroded due to regional obstruction. What I term regional obstruction is a process whereby every country in the region pursues the same development policy based on a list of common excluded products. The government of Côte d’Ivoire recently rescaled its plan to develop chicken due to the introduction of identical plans by all of its neighbors, which blocked the regional market. The products excluded under the regional EPAs are almost identical to those excluded under the CET. As a result, most ECOWAS countries pursue the same economic policies on the basis of the trade system with the EU.

Chapter 8: Conclusion

Introduction


The aim of this thesis is to examine the effects of the EU-devised trade system with West African countries. This trade and development relationship has been in place, albeit in different forms, since West African countries gained independence in the 1960s.The central argument of the thesis is that the EU-devised trade system altered the political rationality or political strategies for survival of West African ruling elites, resulting in the extension of the colonial division of labor, which in turn perpetuated an outdated mode of production and prevented a political drive towards economic diversification. A theory based on the political survival of ruling elites is used to advance this argument (Whitefield et al., 2015, 11; Doner et al., 2005; Geddes, 1994; Acemoglu and Robinson, 2006; Bueno de Mesquita et al., 2004; Booth and Therkildsen, 2010; Khan, 2010). This theory shows how ruling elites’ pursuit of survival is “translated into incentives to behave in one way rather than another as a result of the specific characteristics of the political and socio-economic system of the country” (Booth and Therkildsen, 2010, 8). The argument of the thesis is that the interaction between the EU trade and development systems (especially given their installation at the end of the colonial system/beginning of independence) and ruling elites’ bid for political survival led to system of “permanent extraversion,” whereby local economic problems were solved through assistance from the EU rather than endogenous institutional change. The core contribution of this thesis is to show how this interaction led to the absence of economic change in West Africa and postulate a more diversified and developed region in the absence of the EU trade system.

The absence of change is thus the empirical focus of the thesis. At every stage of the trade and development system (the Yaoundé Convention, the Lomé Convention and the Cotonou Agreement, respectively), ruling elites in West African countries negotiated with the EU to protect their existing economic systems against crisis (through price support and market preferences). Uncompetitive products thus formed the basis of several West African export sectors. The counterfactual argument regarding the EU trade system, demonstrated clearly in the comparative study of Ghana and Côte d’Ivoire in Chapter Five, is that in the absence of the EU trade system, ruling elites would have had to negotiate their survival differently – that is, by promoting economic change (see Evans, 1997, 5; Doner et al., 2005; Leftwich, 2008, 13) – or face dislodgment. As political survival requires elites to achieve a minimum level of economic performance, the failure to do so threatens their position (Khan, 2010, 44). In this thesis, the trade systems are assessed separately and somewhat disjointedly. The Yaoundé Convention is the subject of the Fifth chapter, via a comparative study of Ghana and Côte d’Ivoire. The Lomé Convention is the focus of the sixth chapter, and the Cotonou Agreement is the focus of the seventh chapter.

This concluding chapter mainly revisits and highlights some of the main themes from the main body of the thesis. It is structured as follows: restating the theoretical propositions in the first section; summarizing the main findings in the second section; and drawing conclusions regarding both the EU trade system and international development at large in the third section. In the concluding remarks, I suggest directions for future research and deal with the question of the counterfactual.

Theoretical Restatement


In this section, I restate the theoretical position adopted in the study and outline its main theoretical contribution. Drawn out from Douglass North’s Limited Access order, the theoretical approach taken in this work is derived from the argument that the motivations of ruling elites and the calculations and strategies undertaken to ensure their survival offer significant insights into domestic development trajectories (North et al 2009; Whitefield et al., 2015; Khan, 2010; Doner et al., 2005). Politically induced economic change (pursued by ruling elites) is more likely to occur when such deviations serve the power interests of ruling elites; for example, when diversification is necessary to correct or deflect an economic threat to political power (Evans, 1997, 5; Doner et al., 2005; Leftwich, 2008, 13; Booth and Therkildsen, 2010). Peter Evans captured this sentiment in the following submission. “As political survival and internal peace are more often defined in economic terms, states have become responsible for economic transformation” (Evans, 1997, 5). In this formulation, Peter Evans linked political survival on the one hand with economic transformation or diversification on the other. In other words, the pursuit of political survival in the face of economic threat leads to economic transformation (see Doner et al., 2005). The theoretical literature used in this study explains the political origins of economic transformation in terms of the attempt to avert political disorder (actual or prospective) in pursuit of political survival (Mann and Berry, 2016; Whitefield et al., 2015).

With recourse to extraversion, the use of foreign assistance to maintain domestic power, political elites can guarantee their political survival without having to go through the arduous process of economic transformation. Foreign aid and the bail-out systems operated by international financial institutions have been criticised as systems of extraversion that remove the political motivation to implement institutional and economic changes (see Moss et al., 1996; Bueno de Mesquita et al., 2004, 42). In this thesis, however, extraversion is treated slightly differently from aid and bail-out systems: it is defined as the use of foreign assistance to preserve domestic industries on which political systems are based. In the EU-devised trade and development system, African ruling elites have repeatedly negotiated to ensure that existing (at the time of installment) export systems are protected against crisis. Ruling elites in West African countries use the trade and development system to guarantee their position against internal threats arising from economic uncertainties. As uncertainties threatening ruling elites are necessary to instigate changes – as indicated in the above quotation from Peter Evans, and long documented in the literature on the origin of the developmental state (Naseemullah and Arnold, 2012; Doner et al., 2005) – the EU trade system has become a conduit for the extension of existing economic systems, irrespective of their viability or competitiveness. As a result, the production of some uncompetitive export products, such as bananas and pineapples, has been perpetuated for half a century under the trade and development system.

The theoretical literature does not explicitly take into account the EU’s side of the trade and development system (neo-colonialism or co-development), in terms of the gains accrued by the EU. But in essence, there is a reciprocal connection between the use of the trade systems by domestic ruling elites for extraversion on the one hand, and by the EU to fulfill neo-colonial as well as paternalistic ambitions in West Africa on the other. For example, in the Yaoundé Convention (1963-1975), ruling elites entered the trade negotiations in a colonial context (Rivkin, 1967), and thus wanted the colonial economic system to persist to ensure their political survival (Jalée and Klopper, 1969). The EEC, on the other hand (under the direct direction of France), entered the negotiation process with the declared intention to maintain its colonial influence in West African countries (Zartman, 1972). This merging of interests produced the provisions of price support and market preferences (requested by West African political elites) and the opening of the West African market to EEC products (requested by the EEC, particularly France).

This conjunction was much more pronounced in the negotiations that led to the Lomé Convention in 1975. As John Ravenhill argued, ruling elites from the former colonies wanted the EEC to provide price guarantees for their raw materials (Ravenhill, 1985, 21). However, the negotiations commenced in an era of great commodity uncertainty in the Western world, following the commodity crisis of 1973-74 (Brown, 2002, 49). The EU thus entered the Lomé negotiations with a view to securing raw materials (Ravenhill, 1980, 150; Gowland et al., 1985, 81; Adebajo, 2012, 89; Torrent, 2012, 239). As a result, the Lomé trade provisions reflected both extraversion and neo-colonialism. They included provisions designed to guarantee the supply of raw materials for the EEC while at the same time guaranteeing the prices of these raw materials. Whereas writers such as Michael Dolan and Lynn Mytelka argued that the Lomé Convention was an extension of the colonial division of labour (Dolan, 1978; Mytelka, 1977), others have seen it as a triumph for the ruling elites of the former colonies (Ravenhill, 1985; Frey-Wouters, 1980). Both positions are fairly accurate when viewed from different perspectives.

Finally, there was also a give-and-take transaction in the negotiations that led to the Cotonou Agreement. During the Cotonou Convention, the EU proposed a free-trade system (the EPA) that most West African countries opposed outright (due to the supposedly devastating outcomes of previous liberalisation attempts). However, the EPA was predicated on the continuation of Lomé trade advantages, in which ruling elites in several West African countries had an interest. The EPA has therefore been seen as both an aggressive commercial bid by the EU (Heron, 2004; Soludo, 2012; Langan and Price, 2015; Canterbury, 2010) and as a means of preserving previous trade advantages that are important to West African societies and ruling elites in particular (Czapnik, 2014; IMF, 2008; EU, 2014). This interactive relationship between neocolonialism and extraversion has been present throughout the series of trade systems. Extraversion can therefore be seen as a license for neo-colonialism. The absence an extraversion strategy to Nigerian political elites led to the delay in Nigeria’s acceptance of the EPA.

My main theoretical contribution to the literature on the political survival of ruling elites is the use of minimum economic performance to explain political changes and to draw attention to the potential contaminating effect of foreign development interventions on domestic political survival strategies, with the ultimate outcome of preventing political and economic change. If, as Peter Evans argued, the pursuit of political survival directs ruling elites towards economic transformation, economic transformation will be prevented if political survival is provided for or guaranteed exogenously. Development interventions designed to avert domestic crisis can be detrimental to progressive institutional change, as such crises (or the threat of crisis) are critical junctures leading to institutional and developmental changes (Mann and Berry, 2016). The implication of this contribution is that whilst foreign development interventions might be a direct conduit to political order in developing countries, they are also likely to impede developmental change. Indeed, one of the empirical findings reported here is that West African countries associated with the trade system experienced less political crisis and more political stability in the 1960s than the unassociated West African countries. The ruling elites of the unassociated West African countries attempted to diversify because their survival depended on it, supporting Peter Evans’s submission.



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