Economic Partnership Agreements (EPAs) are a scheme to create a

free trade area A free-trade area is the region encompassing a trade bloc whose member countries have signed a free trade agreement (FTA). Such agreements involve cooperation between at least two countries to reduce trade barriers, import quotas and tariffs, and ...

(FTA) between the

European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are located primarily in Europe, Europe. The union has a total area of ...

and other countries. They are a response to continuing criticism that the non-reciprocal and discriminating preferential trade agreements offered by the EU are incompatible with WTO rules. The EPAs date back to the signing of the

Cotonou Agreement The Cotonou Agreement is a treaty between the European Union and the African, Caribbean and Pacific Group of States ("ACP countries"). It was signed in June 2000 in Cotonou, Benin's largest city, by 78 ACP countries (Cuba did not sign) and the t ...

. The EPAs with the different regions are at different states of play. The EU has signed EPAs with the following countries: the

Southern African Development Community The Southern African Development Community (SADC) is an inter-governmental organization headquartered in Gaborone, Botswana. Its goal is to further regional socio-economic cooperation and integration as well as political and security coopera ...

(SADC),

ECOWAS The Economic Community of West African States (ECOWAS; also known as in French and Portuguese) is a regional political and economic union of fifteen countries located in West Africa. Collectively, these countries comprise an area of , and in ...

(16 states), six countries in Eastern and Southern Africa,

Cameroon Cameroon (; french: Cameroun, ff, Kamerun), officially the Republic of Cameroon (french: République du Cameroun, links=no), is a country in west-central Africa. It is bordered by Nigeria to the west and north; Chad to the northeast; the ...

, four Pacific states, and the

CARIFORUM The Caribbean Forum (CARIFORUM) is a subgroup of the Organisation of African, Caribbean and Pacific States and serves as a base for economic dialogue with the European Union. It was established in 1992. Its membership comprises the 15 Caribbean ...

states. Their defining characteristic is that they open up exports to the EU immediately, while exports to the partner regions is opened up only partially and over transitioning periods. There is also an EU-Japan EPA, which is however symmetrical in opening markets, and thus only an EPA in name.

Key elements

Reciprocity

Due to the continuing WTO incompatibility of previous arrangements, the EPAs' key feature is their reciprocity and their non-discriminatory nature. They involve the phased out removal of all trade preferences which have been established between the EU and the

ACP countries The Organisation of African, Caribbean and Pacific States (OACPS) is a group of countries in Africa, the Caribbean, and the Pacific that was created by the Georgetown Agreement in 1975. Formerly known as African, Caribbean and Pacific Group o ...

since 1975 as well as the progressive removal of

trade barriers Trade barriers are government-induced restrictions on international trade. According to the theory of comparative advantage, trade barriers are detrimental to the world economy and decrease overall economic efficiency. Most trade barriers work ...

between the partners. In order to fulfil the criterion of being a non-discriminatory agreement, the EPAs are open to all

developing countries A developing country is a sovereign state with a lesser developed industrial base and a lower Human Development Index (HDI) relative to other countries. However, this definition is not universally agreed upon. There is also no clear agreem ...

, thereby effectively terminating the ACP group as the main development partner of the EU. The establishment of a reciprocal trade agreement confronts the EU with the problem of how to reconcile the special status of the ACP group with the EU's obligations to the WTO. The solution proposed for this dilemma is an agreement which is only as reciprocal as necessary to fulfil WTO criteria. In reality, the ACP countries will have some room to manoeuvre and to maintain some limited protection of their most vital products. The extent to which

trade Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market. An early form of trade, barter, saw the direct exc ...

must be liberalised under the new EPAs is still a widely debated issue and it remains to be seen whether the WTO provisions regulating regional trade agreements will be revised in favour of the EPA scheme at the end of the

Doha Round The Doha Development Round or Doha Development Agenda (DDA) is the trade-negotiation round of the World Trade Organization (WTO) which commenced in November 2001 under then director-general Mike Moore. Its objective was to lower trade barriers ...

Regionalism

True to the Cotonou principle of ''differentiation and regionalisation'' the

are encouraged to enter into the EPAs in regional groupings. So far the

have formed seven regional groupings in which they intend to enter into EPAs with the European Union. These regional groupings are *the

Economic Community of West African States The Economic Community of West African States (ECOWAS; also known as in French and Portuguese) is a regional political and economic union of fifteen countries located in West Africa. Collectively, these countries comprise an area of , and in ...

*the Economic and Monetary Community of Central Africa *the

* the

East African Community The East African Community (EAC) is an intergovernmental organisation composed of seven countries in the Great Lakes region of East Africa: the Democratic Republic of the Congo, the United Republic of Tanzania, the Republics of Kenya, Buru ...

* the Eastern and Southern Africa (ESA) *the Caribbean Community + Dominican Republic (

) *the

Pacific The Pacific Ocean is the largest and deepest of Earth's five oceanic divisions. It extends from the Arctic Ocean in the north to the Southern Ocean (or, depending on definition, to Antarctica) in the south, and is bounded by the contine ...

region.

Special treatment

The new regional grouping established due to the EPA scheme causes the problem of how to reconcile this approach with the previous special treatment of the group of least developed countries (LDCs) among the

. Currently, 40 of the 79 ACP countries are defined as LDCs by the

United Nations The United Nations (UN) is an intergovernmental organization whose stated purposes are to maintain international peace and security, develop friendly relations among nations, achieve international cooperation, and be a centre for harmoni ...

. The LDCs constitute a special group among the developing countries and have usually been treated separately. Therefore, the EPAs will provide special arrangements for this particular group. As opposed to the other ACP countries, the group of LDCs will be invited to reject the EPAs and continue trade relations under the " Everything But Arms" (EBA) regulation. Launched in 2001 by the Council of Ministers, this amendment to the EC's

Generalized System of Preferences The Generalized System of Preferences, or GSP, is a preferential tariff system which provides tariff reduction on various products. The concept of GSP is very different from the concept of " most favored nation" (MFN). MFN status provides equal tre ...

has since then regulated the trade relations between the EU and the LDCs that have chosen to use this facility, granting

duty-free A duty-free shop (or store) is a retail outlet whose goods are exempt from the payment of certain local or national taxes and duties, on the requirement that the goods sold will be sold to travelers who will take them out of the country, w ...

access to all products from LDCs without any

quantitative Quantitative may refer to: * Quantitative research, scientific investigation of quantitative properties * Quantitative analysis (disambiguation) * Quantitative verse, a metrical system in poetry * Statistics, also known as quantitative analysis ...

restrictions – except to arms and

munition Ammunition (informally ammo) is the material fired, scattered, dropped, or detonated from any weapon or weapon system. Ammunition is both expendable weapons (e.g., bombs, missiles, grenades, land mines) and the component parts of other wea ...

s. While this provision facilitates the situation of the LDCs under the new trade scheme, it has also been criticised because the EBA initiative prevents LDCs from opening up their markets for EU products within the context of an EPA. Another weakness of the EBA initiative is that it utilises the

rules of origin Rules of origin are the rules to attribute a country of origin to a product in order to determine its "economic nationality". The need to establish rules of origin stems from the fact that the implementation of trade policy measures, such as tar ...

of the GSP which require double stage transformation for textiles and clothing. The rules of origin of the EPAs on the other hand allows single stage transformation for the exports of these sectors. This is one of the reasons why Mozambique and Lesotho (both LDCs) initialled the SADC EU Interim EPA in November 2007, and then went on to sign this agreement in July 2009. Angola (the other LDC in the SADC EPA configuration) has chosen to continue trading under EBA as their main exports to the EU are oil and diamonds which as 'wholly obtained' originating products enjoy duty and quota free entry under the EBA rules of origin.

Predicted impact

Researchers at the

Overseas Development Institute ODI (formerly the 'Overseas Development Institute') is a global affairs think tank, founded in 1960. Its mission is "to inspire people to act on injustice and inequality through collaborative research and ideas that matter for people and the ...

predict the impact of the EPAs, however, to be rather minimal.Christopher Stevens, Mareike Meyn and Jane Kennan (2010
Duty-free, quota-free access: What is it worth?

Because most African, Caribbean and Pacific (ACP) group states already enjoyed duty and tariff free access of about €1.4 billion from the

that expired in 2007, there was little new that could be offered. The expected impact described by the ODI: * The transfer of the import tax levied by the EU (€12.7 million in 2006) to parts of the ACP export supply chain, making exports more profitable. * Accrued revenue transfer could induce ACP members to increase levels of trade between each other and increase their supply of competitive products without substantial new investment. * Removing tariff barriers may make it economically feasible to export additional products to the EU that are already exported to other markets. * The most significant, but not necessarily most likely effect, is that there could be increases in foreign exchange earning and positive effects for the rest of the economy.

References

External links

Slamming the Door on Development: Analysis of the EU’s response to the Pacific’s EPA negotiating proposalsEuropean Centre for Development Policy ManagementPartnership under Pressure - an assessment of the EU's conduct in the EPA negotiationsACP-EU trade website''Agritrade'' policy analysis of ACP-EU trade issuesEU déjà vu in the CaribbeanEuforic
makes information on Europe's development cooperation more accessible
Economic Partnership Agreements briefing from Transnational InstituteDeal on Economic Partnership Agreements expected at ACP-EU talks
EUX.TV
The European Union's Agreements with the Group of African, Caribbean and Pacific countries
{{Foreign relations of the European Union Treaties entered into by the European Union Foreign relations of the Caribbean Trade blocs Proposed treaties Organisation of African, Caribbean and Pacific States