Sections:
A Rough Guide to Economic Partnership Agreements (EPAs)
What are EPAs?
EPAs are regional trade agreements between the European Union (EU) and African, Caribbean and Pacific countries (ACPs). Thirty-five countries in seven ACP regions signed up to EPAs in December 2007.
Why are these negotiations needed?
In short: To ensure that the trade relationship between the EU and ACP is in line with current World Trade Organisation (WTO) rules.
Since 1976 an agreement between the EU and ACPs (which include 77 developing countries) has allowed ACP countries one way access to EU markets. This means that while ACP producers are able to export to the EU, they have remained protected from European competition at home.
However, under WTO rules, developed counties – such as those in the EU – can only give this kind of one way access to two groups. It must either be available to all developing countries or only to the very poorest group, known as “Least Developed Countries”. As a result, several developing countries outside the ACP regions successfully challenged the EU to comply with this rule. The EU and the ACP were given until the end of 2007 to implement new arrangements that will fit in with WTO rules. These are now EPAs.
What are the EPAs intended to achieve?
Sustainable development and the reduction of poverty in the ACP regions.
While complying with WTO rules was obviously a key factor in initiating the EPA negotiations, there is also a realisation that the old system of trade preferences has not worked. EPAs are therefore intended to be instruments for development, as opposed to standard trade agreements.
The aim is to establish a stepping stone process in which ACPs will gradually build their ability to compete in world markets:
- Integrated regionally in the ACP: Reduce trade barriers within the ACP regions
- Integration with the EU: ACP flexibility and slowly open up to the EU market
- Integration multilaterally: Then integrate as a whole with the world economy
Does everyone agree that the EPAs are a good idea?
Not everyone. Some UK non-governmental organisations (NGOs) argue that the EPAs are an example of the European Commission (EC) prising open poor countries’ markets for their own interests. Make Poverty History also said that EPAs should not be used to force liberalisation on poor countries.
What does the UK government think?
EPAs are not examples of the EC forcing poor countries to open markets for their interests, nor should they be used to force liberalisation. The Government supports the EPA process, while agreeing with the NGOs that they must be used primarily to benefit the ACP countries. Liberalisation can benefit ACP countries in the long run, but only if they are able to make their own decisions on the timing of how this should work. Only in this way will they be able to build up their infrastructures and be able to compete with global producers.
What has DFID done to ensure this happens?
We have consistently used our influence with the European Commission to ensure the development needs of the ACP countries have been the priority in these negotiations. We have also engaged extensively with other EU member states to ensure that the message coming from EU countries is supportive of the needs of the ACP.
We have also built close relationships with the ACP countries themselves, to find out what they need, and have provided them with technical assistance to improve their ability to negotiate.
We are also supporting a monitoring mechanism that will check the progress of the EPAs against the development objectives, ensuring the optimum outcome for the ACP countries.
What about the countries which haven’t signed?
Of the original 77 countries which were negotiating EPAs with the European Union, to date 35 countries have signed and EPA. This leaves 42 countries which are not protected by either an EPA or by the previous trade arrangement; Cotonou. However, the majority of these countries are in the UN’s Least Developed Country (LDC) category and are covered by the Everything But Arms scheme, which allows duty free access into the EU for products from all LDCs the world over. The remaining few non-LDCs will utilise the Generalised System of Preferences (GSP) scheme which will provide duty-free access on non-sensitive items and a 3% point reduction in duty on sensitive items.
What is in these EPAs?
Of the seven EPAs which have been signed, only one is considered a ‘full’ or ‘comprehensive’ EPA by the Commission. This is the Caribbean EPA which includes not just provisions on trade in goods which were essential to comply with WTO rules, but services, investment, competition and public procurement aspects, among others. The remaining six ‘interim EPAs’ all focus on trade in goods only, but mostly include clauses to continue negotiations on these other areas this year.
Links
Below is a range of material on EPAs including UK Government policy and DFID supported research projects:
- Statement from Trade and Development Minister Gareth Thomas on Economic Partnership Agreements (26 September 2007)
- Response to the campaign on EPAs from Hilary Benn
Consensus on Economic Partnership Agreements between EU and ACP Countries (14 March 2007)
- Written ministerial statement - Economic Partnership Agreements between the European Union and African, Caribbean and Pacific countries
(12 kb) (16 February 2006)
- A rough guide to Economic Partnership Agreements (EPAs): Questions and answers
- UK policy on EPAs
- Institute of Development Studies (IDS) - press release
- European Union (EU) - African, Caribbean and Pacific Countries (ACP) EPAs: The effects of reciprocity
- Preparing for EPAs
- Generalised System of Preferences (GSP)
Last updated 11 June 2008