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The ACP and WTO: Ambitions in trade and development

16-07-2015

Medinilla Aldana, A. 2015. The ACP and WTO: Ambitions in trade and development. ECDPM Talking Points blog, 16 July 2015.

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By now the discussions on the future of the African, Caribbean and Pacific (ACP) group beyond 2020 are picking up speed. One area in which the ACP leadership sees a clear added value for further collective action is “promoting trade, industry and regional integration, in particular through industrialization policies and private sector development”.

The group also recently presented its priorities for the next World Trade Organisation (WTO) ministerial conference in December 2015. The document lists the group’s positions on a number of remaining items on the Doha Development Agenda (DDA).

What can we learn from almost four decades of ACP engagement in multilateral trade negotiation? And what can we expect in terms of ACP collective positioning in the WTO’s trade and development agenda?


Geneva “atmospherics” seen from Brussels


In the negotiating rooms and corridors of the WTO there is very little talk about unity and solidarity, and even less about partnership with the EU. Negotiations are done on the basis of interests, tactics and strategy. In fact, to the untrained eye, Geneva seems to operate with its own value system, in which the fine art of persuasion, wrapped in technical arguments rather than simply value-driven ones, is held in the highest esteem.

The WTO not only has its own language, it has its own champions league. Some of these champions have led the ACP group in negotiations for many years, and are still praised for their knowledge and skills. Development cooperation and finance in this trade-negotiating environment is seen as little more than a compensating measure, as part of a negotiated compromise.

The ACP group in the WTO is therefore first a functional negotiating vehicle, and only in the second place a political group. It has a fierce history of holding down the fort when it comes to maintaining preferences and special and differential treatment (S&D). The group draws its strength from numbers, with 60 voting members and eight observers, any action taken jointly will get the attention of the inner circles e.g. the infamous green room of the WTO. This has been the case in the past with high profile dossiers such as the banana dispute settlement, and the consecutive waivers that were granted for EU preferences for the ACP. All of which turned out largely in favour of the ACP countries.


The Bali ministerial conference of 2013


History shows that the ACP in the WTO is a natural alliance for defending preferences and securing S&D. In the latest round on trade facilitation in Bali (2013), the group showed a slightly different side. Instead of merely holding down the fort, the group negotiated in a creative and proactive manner, proposing S&D based on countries’ own capacity to implement and with guarantees for support from more developed WTO members. This safeguards countries from being overburdened by legally binding reforms. Optimists see this more pro-active and technical approach as a new benchmark for ACP collective action, while critics say that the trade facilitation deal was a case of low-hanging fruit and that only minor difficulties had to be overcome. Whichever is the case, the ACP’s proposal only covered the S&D provisions of the deal.

Perhaps the real question is: how many of those battles are still left in the WTO? Preferences are now, more than ever, a thing of the past, or are being handled in regional agreements, outside the WTO. Since negotiations collapsed in 2003, and again in 2008, the DDA is moving ahead just enough to avoid failure. It is difficult to see if a tour de force is being prepared already since the next work package is still being put together. The three core areas are now understood to be agriculture, non-agricultural market access (NAMA), and services, all of which are areas with extremely high stakes.

Fisheries subsidies may be one opportunity for ACP collective action, as many of the group’s members have a strong stake in the matter. In other areas it will be much more difficult to convene positions of such a large group. More importantly, for many of the core issues, countries prefer to pursue their interests in the smaller, yet more homogeneous negotiating groups, which can be more easily maneuvered to consensus. Most countries in the end are rather pragmatic and invest in various coalitions depending on the topic of negotiations.


Implications for the ACP in Brussels


In Brussels, the ACP-EU partnership is now under review from both sides. While this has more components than trade alone, the simple truth remains: since the end of the unilateral EU preferences to ACP imports, and with the conclusion of economic partnership agreements (EPAs) with sub-groups of ACP countries, trade with Europe is no longer a collective issue for the ACP group. Within the ACP, trade between the regions has always remained rather modest, and has failed to pick up pace as the ACP economies integrated into the world economy. The group has also not entered into regional negotiations with other players outside the EU.

What is left on the table is development cooperation to support trade and industry development, which has been the orientation of many ACP-wide cooperation programmes over the years. Industrialisation and diversification have been on the ACP’s agenda since 1975, and come back now as key objectives of the group’s trade, industry and regional integration promotion. The ACP now sees its role much more as a knowledge management institution and a facilitator for international cooperation. The question is whether this is enough to deliver on the now 40 year old ambitions of diversification and strengthened intra-ACP trade?

Perhaps one key lesson we can draw from the group’s collective action in Geneva, is that building a coalition around a more defensive agenda (i.e. maintaining trade preferences and securing S&DT) is easier than around more offensive interests or real economic integration across regions. In particular for a group as large and diverse as the ACP group. Is the ACP as a political body equipped for this kind of task, which requires a much stronger political cohesion and proper mobilisation of resources for delivering the necessary accompanying technical input/preparation?


Read dossier: The future of ACP-EU relations post-2020

Read A ‘political economy analysis’ (PEA) of the future of ACP-EU relations


In addition to structural support by ECDPM’s institutional partners Austria, Belgium, Finland, Ireland, Luxembourg, The Netherlands, Portugal, Sweden, and Switzerland, this article also benefits from funding from the Department for International Development (DFID), United Kingdom.

This blog post is partly based on interviews conducted by ECDPM in Geneva in February 2015.

The views expressed here are those of the author, and not necessarily those of ECDPM.

Photo courtesy of United States Mission Geneva.

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Cross-cutting TopicsEconomic Transformation and TradePolitical Economy AnalysisTrade Policy and Economic Partnership AgreementsACP Group of StatesWorld Trade Organisation (WTO)