EPAs from opposite angles
30 November 2001
At the third ACP Ministerial Trade Committee meeting in Kenya on October 1st 2001, EU Trade Commissioner Lamy sought to highlight the benefits of the proposed EPAs to ACP countries. These included: the creation of larger markets; a reduction in transaction costs; a reduction in non-tariff barriers; the locking in of policy reforms and hence the creation of more stable and transparent environments for the attraction of long term investment. Commissioner Lamy also sought to highlight how least developed countries would also have an interest in EPAs, since the EPA framework provided " a firm, long-term trade and investment framework".
Commissioner Lamy recognized that major supply side constraints (human resource development, infrastructure provision and the promotion of good governance) would all have to be addressed in parallel if the full benefits of EPAs were to be enjoyed by ACP countries. In this context considerable emphasis was placed on the availability of Cotonou development assistance. Commissioner Lamy acknowledged that EPAs would need to be cloaked in the mantle of WTO-compatible free trade area arrangements but that differentiation would be possible. Overall, Commissioner Lamy expressed optimism over the progress of preparations for REPA negotiations.
ACP representatives were, however, far more sanguine, with pessimism being expressed over delays. Concern was also expressed over the purely educational nature of the regional workshops which had been held to date, with this process contributing little to a serious analysis of the issues faced. The view was expressed that the ACP would not be able to take any decision on the geographical basis for negotiations at the December 2001 ACP Council meeting. It was felt that detailed impact studies would be required before any meaningful decisions could be taken.
ACP representatives also expressed concerns over the erosion of ACP preferences through the GSP arrangements and other trade concessions the EU was making. ACP representatives pressed the Commission to extend the market access made available to least developed countries under the Everything But Arms (EBA) initiative to all ACP countries.
Editorial comment
Assessing the impact of moves towards free trade with the EU - is particularly important in the agricultural sector where the impact of the reform of the CAP also needs to be fully factored into the equation. The issue of extending the EBA to all ACP countries also has an important bearing on ACP-EU agricultural trade since the recent EU initiative was concerned exclusively with improving access to the EU markets in agricultural and processed agricultural products. A number of non-least developed ACP countries would be well placed to capitalize on EBA access under any such moves. For least developed ACP countries it would continue to allow cumulation with non-ACP countries (e.g. Madagascar using Mauritian cloth to produce textiles for export to the EU) and avoid the creation of a division in the trade treatment accorded ACP countries, which would discourage this kind of cross ACP co-operation and investment flow. The EU insistence on "clear and quite strict rules" on WTO compatible free trade areas would appear to run counter to the EU's commitment to differentiation in economic partnership arrangements cloaked in the mantle of WTO compatibility.
