(Source: James O´Connor)

Farmers in Ghana staged a “Global Day Against Economic Partnership Agreement” in Accra on September 29th, 2008. Amid the protests, they called on their government to re-evaluate the EPA and expressed concerns that this agreement could hurt their livelihood and threaten food security in their country and that their country had gone far enough in liberalizing trade.

In the East African Community (EAC), parliamentarians have called for a renegotiation of the EPA and have expressed a desire to evaluate opportunities for greater regional economic cooperation in Africa and with global emerging economies such as China, India and Brazil. Civil society representatives in the Commonwealth called for a suspension of EPAs at the Commonwealth Finance Ministers Meeting held in St. Lucia on the basis that reductions in tariff income will hurt some countries budgets and thus their abilities to provide services to their citizens. Fear of the impact of EPAs has been felt throughout the ACP countries.

Many are concerned that it has divided the ACP between those that have signed and those that have not, LDCs and non-LDCs and by regional groupings; there is also concern that they have pushed some to seek greater cooperation in South-South trade agreements; some have even likened the agreements to a sort of neo-colonialism. Many countries have also expressed concern about the lack of parliamentary and stakeholder input into the EPA negotiation process. Concern, of course, is natural in any new trade agreement and, as the EPAs call for a major change to trade patterns that have governed the EU-ACP relationship for 3 decades, it is understandably present in these negotiations.

In order to continue to build upon our important relationship with the ACP, agreements must be found to ensure access to the EU market for their products during their transition to full integration in the global economy. During the negotiations, it is important to consider that the encouragement of deeper regional integration as well as solidification of the EU-ACP relationship is central to the process.

In December 2007, the waiver granted by the WTO for the trade related aspects of the Cotonou Agreement expired. Contonou built upon the earlier Lome Conventions that offered duty-free, quota-free, non-reciprocal, preferential trade access for ACP countries’ products to the EU market. This agreement was ruled incompatible with WTO rules, specifically article XXIV of the GATT and therefore, new agreements had to be found to continue the important trading relationship that exists between the EU and ACP. As a solution, EPAs provide for a creation of a Free Trade Area (FTA) between the EU and regional trading blocs in the ACP (including amongst members of those blocs).

Besides promoting regional economic integration, EPAs are also meant to serve as tools for development, provide for aid and technical assistance, good governance and peace. The negotiating process has however been difficult; the ACP countries have expressed concern that imports will hurt their domestic production and that they will loose tariff revenue.

Negotiations are further complicated because those countries classified as Least Developed Countries (LDCs) will continue to have duty-free, quota-free access to the EU and may be less motivated to sign a regional EPA, hurting the very regional integration that is one of the EPA pillars.

At its 6th summit in Accra, Ghana, on October 2, 2008 the ACP discussed the possibility of a ACP Free Trade Area amid their concerns that the EPA negotiations were splitting the ACP region by regional groupings and also into countries that had signed some form of EPA and those that had not. The president of Ghana and the incoming president of the ACP group, John Kufuor, stated that “the EPAs divide the solidarity that used to bind the ACP countries together under the pretext of giving regional emphasis to the relationship between the EU and the six ACP regions.” The reason for this split of the ACP into smaller regional groups was to facilitate the negotiation process as the EPA creates not only an FTA between the EU and individual countries, but also within regional groups; it was thought that this would be more difficult to bring about for the entire ACP.

EPAs are currently in various states of negotiation, but so far eight full or step-stone agreements have been initialled between the EU and various ACP countries. There is one comprehensive agreement with a full regional and sectoral coverage between the EU and CARIFORUM. There are seven so called interim agreements that are agreed with subregions or only specific countries of a region and/or covering only limited soctors.

In the case of CARIFORUM (full agreement) and Côte d'Ivoire (interim agreement), the European Parliament has given its assent and has thus ratified the agreements.

For Cameroun and the Southern African Development Community (SADC), the European Parliament is waiting for the assent procedure to be initialled by the Council. For the remaining four regions interim EPAs are still in negotiation.

“It’s not perfect. But it’s a good agreement and it gives us a lot of opportunities to do things to help develop our economy,” said Errol Humphrey, Ambassador from Barbados to the EU.

On October 15, 2008, the first full EPA was signed by the countries of the CARIFORUM trading block and the EU. The run up to the signing has seen significant disagreement between members of the bloc and in the end, both Guyana and Haiti decided not to sign. Haiti, as an LDC, continues to benefit from access to the EU market under the Everything But Arms (EBA) agreement, however, Guyana could face tariff increases for its goods if it does not participate in an EPA. Guyana’s president, Bharrat Jagdeo said he wanted the EPA to include a clause that would allow the Caribbean states to revise the EPA within five years if they decided that the impact of the agreement did not match their developmental needs. Facing the prospect of having trade governed by the WTO’s GSP agreement, Guyana eventually decided to sign the Caribbean EPA on October 20, 2008.

At the signing ceremony, Siim Kallas, European Commission Vice President said, “This marks a new era in EU-Caribbean economic relations. The EPA puts the Caribbean firmly on the map for trade and investment.”

Despite the fact that the EPA offers up-front market access for Caribbean products to the EU while gradually opening the Caribbean market over the next 25 years, some continue to be sceptical. In the Bahamas, where 83% of goods exports go to the US and Canada and where the service industry, specifically tourism, is dominant, many questioned the need for an EPA. “There are few Bahamian companies or individuals currently equipped or ready to compete in an EU market…with over 400 million people,” said Richard Lowe of the Nassau Institute. Being dwarfed by competition from Europe is a concern that has been echoed across the Caribbean and, indeed, the ACP. It is hoped for, however, that provisions for aid and the longer time horizon for the opening of markets will offer relief for ACP producers as well as create more competitive economies and companies.

In the Dominican Republic, Faustino Jimenez, director of the National Sugar Institute, has said that the EPA could triple the country’s exports to the EU by 2010. Many hope that the EPAs and the accompanying aid and technical assistance they offer will help ACP countries, particularly Africa, to upgrade their infrastructure and help them develop more value added industry that will make them better able to compete in the world market and less subject to fluctuations in the international commodity markets. In a paper about the achievement of the Millenium Development Goals, Tongkeh Fowale reiterates that the biggest challenges for African countries are “political instability, conflicts, poverty, disease, economic stagnation and lack of infrastructure.” In their design and implementation, the EPAs should help to address these concerns.

Encouraging developing countries, in particular those in the ACP, to become more fully integrated into the global economic and trading system is an important goal. We want to see our partners in the ACP reaping the full benefits of the global economy, but we also want to listen actively to their concerns during the transition. EPAs should be designed to make this transition as smooth as possible including making sufficient aid available to governments and effected industries to help them adapt. The focus during the transition should be to assist companies in the ACP to become more competitive and help bring about truly deeper integration at the regional level. We should emphasize technical assistance and help ACP countries build the infrastructure they need to help them take advantage of trade. This aid should be made readily available as these countries gradually open their markets under the terms of the EPA. We also must ensure that the EU-ACP relationship continues to be strong and mutually beneficial. The development and assistance portions of the EPAs must highlight our cooperation and involve stakeholders more closely in the negotiations. With the ACP countries fully integrated into the global trading system, there will be benefits for all and foremost for the ACP countries themselves, the EPAs should be a tool to help bring this about as well as help make the adaption as smooth as possible.

• Further background information about the Economic Partnership Agreements can be found here.