Response on Economic Partnership Agreements (EPAs)

December 2007

We believe that Economic Partnership Agreements (EPAs) can be good for development and help countries trade their way out of poverty. For example we want EPAs to increase access to European Union (EU) markets, make it easier to export goods (through simpler rules of origin), increase trading opportunities and collaboration within the African, Caribbean and Pacific (ACP) regions themselves, and promote integration into the global economy.

To date we have seen a significant number of countries from the ACP sign interim EPAs which will safeguard their trade with the EU allowing for negotiations on other areas to continue in 2008. These countries have received improved access to EU markets and better Rules of Origin from 1 January 2008. This is welcome news. However, there are still a number of countries which have not signed, some of which trade substantially with the EU. I hope they will sign in the near future.

On Monday 10 December, EU Ministers approved the regulation which will provide completely free access for goods coming into the EU from those ACP countries which have signed an interim EPA. I am concerned of course about what happens to those countries which do not meet the requirement to provide a WTO compatible market access offer to the EU. Therefore I have continued to press the Commission to show flexibility when considering which countries should receive the benefits of this Regulation and I, along with my Irish, Danish and Dutch colleagues released a Political Declaration on Monday 10 December calling for no ACP country to receive worse market access into the EU from the beginning of this year.

I continue to support EPAs, which will provide some of the poorest countries in the world with the best conditions with which to trade with the EU and therefore develop their economies. I recently heard from the President of the Lesotho Textile Exporters Association that the new EPA with more relaxed Rules of Origin will present Lesotho clothing manufacturers with new market opportunities; preserving existing jobs and creating new ones. These new rules will mean that manufacturers will have more choice over where they buy the products they need to make their garments and they will be able to purchase these at the most competitive price.

We continue to stand by the commitments we made in our position paper in 2005. These agreements will only work if they are development focussed in the interests of the ACP countries negotiating them. We have always been clear that the ACP should decide upon the content, scope and timing of their EPA and other issues such as services and investment provisions should only be included at the request of the ACP region or country concerned.

Concerns have been expressed about the pace of these latest negotiations. However, the EU and ACP signed the Cotonou Agreement in June 2000 and have known since then that the Cotonou regime of preferences would come to an end in December 2007. The 31st December deadline is not set down by the European Commission. The Cotonou agreement has been deemed World Trade Organisation-incompatible, and a continuation of Cotonou would thus be in breach of our WTO commitments. The UK believes in a rules based international trade system and that we should stand by the commitments we have made.

Concerns have also been raised about the consequences for regional integration and yes, some of these countries have not been joined by the rest of their regional groups. However we do have a full agreement with the East African Community and the Caribbean region. For those other countries, they have had to make a tough choice between sticking with their regional partners or guarding against trade disruption which could affect the livelihoods of their people and I am glad they have chosen the latter. We must remember that these agreements are the first step in the EPA process. All the agreements being signed now allow other countries to join at a later date and I hope that more will do so.

We have recently seen 2 debates in Parliament on EPAs. I encourage this Parliamentary involvement and believe that debate will be key to ensuring that these agreements are properly scrutinised and consistent with UK policy.

The UK Government will continue to work to make sure that trade brings benefits to the poor and serves as a real tool for growth and poverty reduction.

I hope this is helpful.

Gareth Thomas
Parliamentary Under Secretary of State for International Development

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