Trade Competition between the European Union and Emerging Economies in Africa

Abstract

The European Union is the most important trading partner for Africa. However, since the beginning of the global financial crisis it has been steadily losing its advantage over emerging economies in merchandise trade with African countries. Trade in goods between China, India, Brazil, Turkey and 34 Africa’s least developed countries has been surpassing trade between the EU and Africa’s LDCs since 2007. Emerging economies not only compete between themselves for access to African resources, markets, and influence on the African continent but also pose a threat for the EU’s position and interests in Africa. The paper shows the level and trends in merchandise trade between the EU and 54 African countries, and between four emerging economies (China, India, Brazil, Turkey) and Africa in the years, from 2000 to 2013. The analysis is based on the data retrieved from the UN Comtrade Database. Trade relations between the EU and Africa are very complicated. The EU negotiates agreements with individual African countries, groups of countries, and the African Union. It declares partnership, insists on multilateral trade liberalization by African countries but at the same time protects its own market. The EU provides more and more development assistance to African countries. However, its assistance is highly conditional. The emerging economies treat African countries as equal partners, they develop the South-South cooperation and do not interfere in domestic affairs of their trading partners. Besides, they systematically increase their development assistance to Africa without any political conditions. Both, the EU and emerging economies combine trade policy with development and investment policies. However, it seems that the emerging economies do it more efficiently.