economic partnership agreements eu-acp: facts and key issues

80 Pages·2012·2.63 MB·English

ECONOMIC
PARTNERSHIP
AGREEMENTS EU-ACP:
FACTS AND
KEY ISSUES
UPDATED EXTENDED EDITION
SPRING 2012
OFFICE FOR PROMOTION OF PARLIAMENTARY DEMOCRACY (OPPD)
in co-operation with the Policy Department of DG EXPO
OPPD Publisher: Dick Toornstra
OPPD Coordination & Editing: Helen Collins / Christian Meseth
Research and manuscript produced by :
Policy Department of DG EXPO:
Roberto Bendini
Marika Armanovica
Willem De Goede
Manuscript completed in March 2012
© European Parliament, OPPD 2012
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This publication is available in English and French at http://www.europarl.europa.eu/oppd
EuROPEAN PARLIAMENT
ECONOMIC
PARTNERSHIP
AGREEMENTS EU-ACP:
FACTS AND
KEY ISSUES
UPDATED EXTENDED EDITION
SPRING 2012
OFFICE FOR PROMOTION OF PARLIAMENTARY DEMOCRACY (OPPD)
in co-operation with the Policy Department of DG EXPO
ECONOMIC PARTNERSHIP AGREEMENTS EU-ACP: FACTS AND KEY ISSUES — 1
Table of ConTenTs
INTRODUCTION ......................................................................................................................... 6
CHRONOLOGY & REGIONS ........................................................................................................... 8
• GLOBAL CHRONOLOGY ............................................................................................... 8
• CARIFORUM REGION .................................................................................................. 9
• EASTERN AND SOUTHERN AFRICAN (ESA) REGION ............................................................ 10
• EAST AFRICAN COMMUNITY (EAC). ................................................................................ 11
• CENTRAL AFRICAN REGION. ......................................................................................... 11
• WEST AFRICAN REGION .............................................................................................. 12
• SOUTHERN AFRICAN DEVELOPMENT COMMUNITY (SADC) ................................................... 12
• PACIFIC ACP REGION ................................................................................................. 13
1. LEGAL FRAMEWORK (WTO AND COTONOU). ...................................................................... 14
1.1 ARTICLE XXIV OF THE GATT AND THE REGIONAL TRADE AGREEMENTS (RTA) ............................. 14
1.2 THE 1979 ENABLING CLAUSE ......................................................................................... 15
1.3 WTO WAIVERS ............................................................................................................. 16
1.4 THE COTONOU AGREEMENT. ........................................................................................... 17
2. ECONOMIC PARTNERSHIP AGREEMENTS: PRESENTATION AND CONTENTS ............................ 19
2.1 CARIFORUM EPA .......................................................................................................... 19
2.1.1 Development issues and basic principles. ......................................................................... 19
2.1.2 Trade in goods ............................................................................................................ 20
2.1.3 Trade in services ......................................................................................................... 20
2.1.4 Innovation and Intellectual Property Rights (IPRs). .............................................................. 21
2.1.5 Foreign Direct Investments (FDIs) ....................................................................................21
2.1.6 Public procurement ...................................................................................................... 22
2.1.7 Competition. ............................................................................................................... 22
2.2 SUSTAINABILITY IMPACT ASSESSMENTS (SIA) .................................................................... 22
3. POSITIONS AND ROLES OF KEY ACTORS. ......................................................................... 24
3.1 MAIN DIFFERENCES IN POSITIONS ................................................................................... 24
3.2 KEY ACTORS: ROLES, MOTIVES AND POSITIONS. ................................................................ 24
3.2.1 The European Commission ............................................................................................. 24
3.2.2 ACP regions and countries. ............................................................................................ 30
3.2.3 EU-ACP Joint Parliamentary Assembly. ............................................................................. 34
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3.2.4 The European Parliament ...............................................................................................34
3.2.5 The Council and Member States. ..................................................................................... 34
3.2.6 Non Governmental Organisations (NGOs) .......................................................................... 35
3.3 RELATIONSHIP BETWEEN TECHNICAL QUESTIONS AND POLITICAL IMPLICATIONS ....................... 35
4. OVERVIEW OF THE CURRENT STATE OF NEGOTIATIONS ...................................................... 37
4.1 STATE OF PLAY - CENTRAL AFRICA REGION ....................................................................... 37
4.1.1 Countries and status .................................................................................................... 37
4.1.2 Bilateral trade in goods ................................................................................................ 37
4.1.3 Reduction of tariffs on trade in goods .............................................................................. 38
4.1.4 Perspectives and sensitive issues ................................................................................... 38
4.2 STATE OF PLAY - EAST AFRICAN COMMUNITY (EAC) ............................................................ 39
4.2.1 Countries and status .................................................................................................... 40
4.2.2 Bilateral trade in goods ................................................................................................ 40
4.2.3 Reduction of tariffs on trade in goods .............................................................................. 40
4.2.4 Perspectives and sensitive issues ................................................................................... 41
4.3 STATE OF PLAY - EASTERN AND SOUTHERN AFRICA REGION (ESA). ......................................... 41
4.3.1 Countries and status .................................................................................................... 41
4.3.2 Bilateral trade in goods ................................................................................................ 42
4.3.3 Reduction of tariffs on trade in goods .............................................................................. 43
4.3.4 Perspectives and sensitive issues ................................................................................... 44
4.4 STATE OF PLAY - WEST AFRICA REGION ............................................................................ 44
4.4.1 Countries and status .................................................................................................... 44
4.4.2 Bilateral trade in goods ................................................................................................ 46
4.4.3 Reduction of tariffs on trade in goods .............................................................................. 46
4.4.4 Perspectives and sensitive issues ................................................................................... 46
4.5 STATE OF PLAY - PACIFIC .............................................................................................. 47
4.5.1 Countries and status .................................................................................................... 47
4.5.2 Bilateral trade in goods ................................................................................................ 48
4.5.3 Reduction of tariffs on trade in goods .............................................................................. 48
4.5.4 Perspectives and sensitive issues ................................................................................... 49
4.6 STATE OF PLAY - CARIFORUM REGION .............................................................................. 50
4.6.1 Countries and status .................................................................................................... 50
4.6.2 Bilateral trade in goods ................................................................................................ 50
4.6.3 Reduction of tariffs on trade in goods .............................................................................. 52
4.6.4 Perspectives and sensitive issues ................................................................................... 52
4.7. STATE OF PLAY - SOUTHERN AFRICAN DEVELOPMENT COMMUNITY (SADC). .............................. 53
4.7.1 Countries and status .................................................................................................... 53
ECONOMIC PARTNERSHIP AGREEMENTS EU-ACP: FACTS AND KEY ISSUES — 3
4.7.2 Bilateral trade in goods ................................................................................................ 53
4.7.3 Reduction of tariffs on trade in goods .............................................................................. 53
4.7.4 Perspectives and sensitive issues ................................................................................... 54
4.8 OUTLOOK 2012: NEW DYNAMICS IN EU-ACP TRADE RELATIONS ............................................. 56
4.8.1 Sunset for ACP trade preferences under the Market Access Regulation? ................................. 56
4.8.2 Generalised System of Preferences ................................................................................. 57
5. POSSIBLE ALTERNATIVES TO EPAS ................................................................................. 59
5.1 STATUS QUO ............................................................................................................... 59
5.2 NEW WTO WAIVER ........................................................................................................ 59
5.3 CHANGE OF WTO RULES ................................................................................................ 60
5.4 GSP PLUS .................................................................................................................. 60
5.5 SIMPLIFIED EPA. .......................................................................................................... 62
5.6 CONCLUSIONS. ............................................................................................................ 62
ANNEX 1: ACRONYMS ................................................................................................................ 64
ANNEX 2: GLOSSARY . ................................................................................................................ 66
ANNEX 3: OPPD SEMINAR ON PARLIAMENTARY SCRUTINY OF INTERNATIONAL AGREEMENTS .................................... 69
ANNEX 4: RECENT DG EXPO POLICY DEPARTMENT STUDIES . .................................................................... 70
ANNEX 5: SELECTED BIBLIOGRAPHY .............................................................................................. 70
1. THE WTO AND DEVELOPMENT ......................................................................................... 70
2. EU-ACP DOCUMENTS .................................................................................................... 71
3. ACP DOCUMENTS AND DECLARATIONS ............................................................................. 71
4. IMPACT ASSESSMENTS (INCLUDING SIA) ........................................................................... 71
5. EU-ACP TRADE STATISTICS ............................................................................................ 71
6. CARIFORUM EPA .......................................................................................................... 72
7. INTERIM EPAS ............................................................................................................. 72
8. RELATIONS EU-ACP IN GENERAL .................................................................................... 73
9. ALTERNATIVES TO EPAS ................................................................................................ 74
10. PAPERS IN FRENCH ...................................................................................................... 74
ANNEX 6: GATT ARTICLE XXIV ...................................................................................................... 75
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ECONOMIC PARTNERSHIP AGREEMENTS EU-ACP: FACTS AND KEY ISSUES — 5
InTroduCTIon

Economic Partnership Agreements (EPAs) are basically
trade agreements, within a multi-layer development strat- In a nutshell: Economic
egy vis-à-vis African, Caribbean and Pacific (ACP) countries
Partnership Agreements (EPAs)
which also include extensive funding (European Develop-
ment Fund) and other initiatives aimed at fighting poverty
EPAs are meant to be WTO-compatible Free
and underdevelopment. They should therefore be analysed
in the context of the overall EU development policy and the Trade Agreements with a strong development
evolving global trade regime. component. They reflect the economic dimension
of the EU-ACP relationship as set out in the Co-
EPAs have been criticised by many stakeholders both in
tonou Agreement. EPAs provide for progressively
the EU and in the ACP countries. The agreements were
removing barriers to trade and enhancing coop-
often depicted as an instrument of economic penetration of
the EU in Africa and the sincerity of their development goals eration in all areas relevant to trade between the
was questioned. parties in view of the integration of ACP countries
into the world economy, thus promoting sustain-
It is therefore important to keep in mind that EPA negotia-
able development and eradicating poverty. EPAs
tions were launched by the EU in agreement with the ACP
are based on the principles of promoting regional
governments, and for two essential reasons:
integration and taking into account the different
• The trade regime adopted in the Lomé Conventions (and needs and development levels of the ACP coun-
the subsequent Cotonou Agreement) gave non-recipro- tries and regions.
cal, preferential market access to the ACP countries but
discriminated against other developing countries which
did not enjoy the same preferential treatment and there-
fore had to pay higher custom duties for their products
exported to the EU. The ACP preferential trade regime
was in breach of the rules governing international trade Since the conclusion of the Cotonou Agreement in 2000
and the World Trade Organisation (WTO) requested that the EU’s international trade agenda has changed dramati-
it be repealed and replaced with a WTO-consistent one. cally. The promising perspectives of a rapid conclusion of
the Doha Development Round have waned. Although the
• The extensive funding and preferential trade regime WTO negotiations are not officially terminated, it is unlikely
accorded by the EU was de facto a failure because it that they will yield a positive outcome in the foreseeable
proved unable to effectively alleviate poverty or secure future.
sustainable development in the ACP region.
This is certainly not good news for the EU and other
The EPA process was launched in the framework of the developed countries and it is terrible news for developing
Cotonou Agreement of 2000 and an extension (waiver) of countries, as the Doha Round tried to secure a privileged
the old regime was granted by the WTO until 31 December treatment for them in an increasingly competitive world.
2007. This period was supposed to be sufficient in order Failure to find an agreement in Geneva may therefore
to negotiate the new bilateral agreements replacing the old prevent ACPs from profiting from a set of rules expressly
trade regime. tailored to their needs. A failure of the Doha talks might also
weaken the role of the WTO in the long run, and while it is
However, negotiations proved to be longer and more dif- true that the ACP were not always able to profit fully from
ficult than expected. To cope with the deadline and to avoid the WTO’s internationally-negotiated trade rules, it is also
trade disruption resulting from the end of the preferential evident that a transparent system of mutually agreed rules,
trade regime, the EU pushed for Interim EPAs that only cov- although somewhat incomplete, generally benefits the
ered trade in goods. The majority of ACP countries which weaker contracting party.
were not least developed (and could therefore profit from
alternative privileged market access to the EU) agreed to The economic and political scenario has also been
either initial or sign such agreements. After 2007, negotia- changed by emerging economies. China will soon be the
tions progressed very slowly and their conclusion is still not first world economic power, while India has made huge pro-
within reach. The only “full” EPA which has so far been gress in technologically advanced economic sectors. The
completed is the CARIFORUM EPA. The CARIFORUM EPA once-poor Brazil now produces high quality aircraft and, for
entered into force in 2008. the first time in its history, has a strong trade surplus. Similar
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— ECONOMIC PARTNERSHIP AGREEMENTS EU-ACP: FACTS AND KEY ISSUES
EuROPEAN PARLIAMENT
success stories are shared by countries such as Malaysia, It is hoped that the document will bring about a better
Indonesia and South Korea. Crucially, all of these countries understanding of the key issues at stake and enhance par-
have one thing in common: they have never benefitted from liamentary scrutiny of the EPAs negotiations and implemen-
asymmetrical trade preferences. On the other hand, and tation in the future.
despite massive financial assistance and generous tariff
cuts, many ACP countries meanwhile were left behind and
often became more dependent on external aid.
Dick Toornstra
It is not easy to predict what will be the ultimate impact
of EPAs on the economies of ACP countries. Certain cor-
rections (sensitive product exclusions, long interim periods
before full implementation, safeguard clauses) may certainly
help to reduce the negative effects. Similarly, ad hoc finan-
cial assistance has been foreseen to face the loss in cus-
toms revenues. However, without real domestic reforms,
the situation is not likely to change, with or without EPAs.
This reader starts by explaining the relevant WTO and
Cotonou provisions that set up the legal framework of
EPAs. What follows is a detailed presentation of the
CARIFORUM EPA – the only one concluded so far. A short
comment on impact assessments is also included in this
chapter. Subsequently, Part 3 presents positions and roles
of main EPA actors. Particular emphasis is given here to
the role and actions of the European Commission. Part 4
summarises all the steps of the EPA negotiations and gives
a detailed presentation of the economic and trade aspects
in the seven EPA regions. The text then concludes with a
review of possible alternatives to the EPAs in Part 5.
A selected bibliography and a glossary are included at the
very end of this document. The reader has been based both
on documents that are accessible to the public online and
on studies previously executed by the Policy Department
of the Directorate General for External Policies of the Euro-
pean Parliament (DG EXPO) which prepared this reader in
support of a seminar organised in October 2011 by the EP’s
Office for Promotion of Parliamentary Democracy (OPPD).
A brief report on this seminar can be found in the annex.
On 30 September 2011 the European Commission put
forward a proposal to cease by 2014 those trade prefer-
ences extended since January 2008 via the Market Access
Regulation, in the continued absence of, at least, ratified
interim EPAs. This initiative, intended to speed up EPA
negotiations, is almost certain to rekindle interest in these
agreements during 2012 and 2013. More and more parlia-
ments in Africa and the Pacific, as well as the European
Parliament, will be confronted with ratification procedures.
For these reasons, upon the depletion of original stocks of
this reader (originally published in September 2011), the
OPPD decided not only to reprint it, but to enhance it with
a new chapter (4.8) to reflect these developments and to
update other parts as required.
ECONOMIC PARTNERSHIP AGREEMENTS EU-ACP: FACTS AND KEY ISSUES — 7
CHronoloGY & reGIons
Global chronology
The Cotonou Agreement is signed in Cotonou, Benin, between the European Union
and the African, Caribbean and Pacific Group of States (ACP countries). The agreement
June 2000
stipulates that non-reciprocal trade preferences granted by the EU will be replaced by
Economic Partnership Agreements (EPAs).
The first negotiation phase which takes place at an “all ACP” level is launched in
September 2002
Brussels. The first phase addresses horizontal issues of interest to all parties.
The European Council adopts a regulation applying the arrangements for products
originating in certain states which are part of the African, Caribbean and Pacific (ACP)
December 2007
Group of States provided for in agreements establishing, or leading to the establishment of,
Economic Partnership Agreements.
At the Africa-EU summit in Tripoli the parties commit to concluding EPAs that support
November 2010 socio-economic development, regional integration and the integration of Africa into the
global economy.
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