Economic Partnership Agreements (EPA) are ‘development-focused’ trade agreements negotiated between the African, Caribbean and African (ACP) countries/regions and the European Union (EU). They are reciprocal, but asymmetric trade agreements, where the EU, as one regional block, provides full duty free and quota free market access to EPA countries and/or regions and where ACP countries/ regions, commit to open at least 75% of their markets to the EU.
As of 1 October 2014, EPAs have been concluded by: 28 countries of the EU with 49 ACP countries, covering over 900 million people, on 4 continents
EPAs are trade instruments that replace the unilateral trade regime that governed the trade relationship between EU and ACP countries for almost forty years. The Cotonou Partnership Agreement (CPA), established in 2000, was the last one that granted unilateral preferences to ACP countries. In fact, this unilateral trade regime was considered in breach of a fundamental principle of the World Trade Organization (WTO) because it granted more favourable treatment only to ACP countries but not to other developing countries, members of the WTO.
In this context, the EU was granted in 1996 a first waiver at the WTO, which expired in 2000. A request for extension of this waiver was granted in 2001, in parallel to the launch of the WTO Doha Round, after much debate, until 31st December 2007, under the condition that the discriminatory trade Cotonou regime in favour of the ACP only would be replaced by WTO-compatible trade regimes, that is either free trade agreements (i.e. EPAs), a non-discriminatory and arbitrary preferential trade regimes to developing countries (i.e. the general system of preferences – GSP), or non-preferential treatment (i.e. trading under the most-favoured nation clause –MFN- of the WTO) this time compatible with the rules of the WTO.
EPA negotiations started on 27th September 2002. After months of preparation and consultations at the all-ACP level, at the end of 2003, it was decided that EPAs would be negotiated at the regional level. In this context, 6 EPA groups were constituted, namely in:
In 2007, a 7th EPA group was constituted, comprising of the 5 members of the Eastern African Community.
EPAs, as envisaged in the Cotonou Agreement, were meant to build on and foster regional integration processes in the ACP. Existing ACP regional groupings were the basis for EPA negotiations. However, due to overlapping membership of countries in several African Regional Economic Communities (RECs), countries had to make a choice. Therefore, with the exception of ECOWAS and EAC, which are at a more advanced state of integration (they have a Customs Union), the other African RECs did not negotiate with all their members. Countries members of COMESA, negotiated as Eastern and Southern Africa (ESA), with 11 members out of their 19 members. It is important to note that two COMESA members, namely Egypt and Libya are non-ACP states, and therefore did not take part in EPA negotiations. The remaining COMESA states negotiated within SADC (Swaziland), EAC (Burundi, Kenya, Rwanda and Uganda) or Central Africa (DR Congo) configurations. Similarly, the SADC EPA group consisted of 7 countries out of the 15 members. Of these, the Southern African Customs Union (SACU), which is a customs union, negotiated as a group, when South Africa joined the negotiations in 2007. The others negotiated in Central Africa (DR Congo), EAC (Tanzania) and ESA (Madagascar, Malawi, Mauritius, Seychelles, Zambia and Zimbabwe). In Central Africa, the EPA group consists of 8 members in total. These are the 6 members of Central African Economic and Monetary Community (CEMAC), a customs union, namely Gabon, Cameroon, CAR, Chad, Rep. of Congo and Equatorial Guinea plus two other countries, DR Congo (non-CEMAC but member of the Economic Community of Central African States – ECCAS, SADC and COMESA) and Sao Tome and Principe (observer status only in CEMAC and member of ECCAS). West Africa negotiated with the full 15 member of ECOWAS (Benin, Burkina Faso, Cape Verde, Gambia, Ghana, Guinea, Guinea Bissau, Cote d’Ivoire, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, Togo) plus Mauritania. East Africa negotiated as a block within the East African Community as part of ESA until 2006, and from 2007 as an independent grouping, with its full 5 members.
Entry into force of an agreement is a lengthy process: it requires signature, ratification and implementation and may sometimes take years. Therefore, to prevent trade disruption pending the entry into force of EPAs, on 20 December 2007, a Market Access Regulation (MAR 1528/2007) was adopted by the EU, to provisionally apply EPA preferences as from 1st January 2008 from the EU to countries that have concluded such a deal, but have yet to sign, ratify and implement their agreements. The EU later decided, in May 2013 with the EU Regulation 527/2013, to amend the MAR to exclude, as from 1st October 2014, countries that have not taken the necessary steps to ratify the EPA concluded in 2007. Thus, these countries had to do so or conclude a new (regional) EPA to be reintegrated under the MAR 1528/2007. For those not having done before 1st October 2014, they automatically fall, after that date, under the Generalised System of Preferences (GSP), a differentiated preferential trade regime that the EU gives unilaterally to all developing countries. Least-developed countries (LDCs) can trade under the Everything But Arms (EBA) Initiative under the EU GSP, which provide duty free quota free access to the EU market for all exports, except arms, from LDCs. Non-LDCs have a less favourable regime under the GSP. Besides, according to the new EU GSP that entered into force on 1st January 2014, any upper middle-income countries would no longer have trade preferences on the EU market as from 2016.
No, the “deadline” of 1st October 2014 does not mean the end of EPA negotiations. The deadline only refers to the coverage of countries under MAR 1528/2007 after that date, as discussed above. EPA negotiations can still continue as necessary (i.e. for countries that have not yet concluded an EPA but would still wish to do so, and for EPA countries/regions that have rendez-vous clause to pursue negotiations on a broader scope in terms of content, such as trade in services, investment and other trade-related issues).
With the exception of the CARIFORUM EPA, which is a comprehensive Agreement covering investment, services and a number of trade-related regulatory issues (from public procurement to competition and intellectual property rights, among others), all remaining EPAs cover only trade in goods and development cooperation. The rest are contained in a rendez-vous clause to continue negotiations on a number of issues, but there is no specific timeline for the finalisation of the negotiations.
Key statistics (2013) | ||||
EU Trade with West Africa EPA Group | Imports | Exports | Total | |
value (mio€) | total |
38273 |
30471 |
68744 |
share (%) | total |
2,3 |
1,8 |
2 |
Mineral products |
81,8 |
37,1 |
||
Foodstuff, beverage tobacco |
9,2 |
5,8 |
||
Vegetables products |
1,6 |
|||
Products of the chemical or allied industries |
1,6 |
|||
Machinery and appliances |
17,6 |
|||
Transport equipment |
8,7 |
|||
Products of the chemical or allied industries |
8,3 |
|||
West Africa trading partners | ||||
share (%) | EU |
24,6 |
37,6 |
30,5 |
Chiina |
21,4 |
12 |
14 |
|
US |
7,9 |
10,3 |
9 |
|
India |
4,9 |
12 |
8,1 |
|
EU Trade with SADC EPA Group | Imports | Exports | Total | |
value (mio€) | total |
21677 |
27091 |
64283 |
share (%) | total |
1,2 |
1,5 |
1,9 |
Mineral products |
12,7 |
|||
Pearls, precious metals and articles thereof |
34,7 |
|||
Base metals and articles thereof |
13,7 |
5,1 |
||
Vegetables products |
7,6 |
|||
Machinery and appliances |
7,0 |
32,3 |
||
Transport equipment |
19,3 |
|||
Products of the chemical or allied industries |
11,7 |
|||
Foodstuff, beverage tobacco |
3,1 |
|||
SADC EPA Group trading partners | ||||
share (%) | EU |
28,7 |
17,4 |
23,1 |
China |
17,2 |
33,5 |
25,3 |
|
US |
7,3 |
6,9 |
7,1 |
|
Saudi Arabia |
7,9 |
4,4 |
||
India |
6,0 |
5,0 |
5,5 |
|
EU with EAC | Imports | Exports | Total | |
value (mio€) | total |
2154 |
3519 |
5673 |
share (%) | total |
0,1 |
0,2 |
0,2 |
Vegetables products |
61,5 |
|||
Foodstuff, beverage tobacco |
14,6 |
|||
Live animals, animal products |
6,6 |
|||
Machinery and appliances |
4,8 |
31,6 |
||
Mineral products |
4,2 |
|||
Products of the chemical or allied industries |
19,8 |
|||
Transport equipment |
14,2 |
|||
Foodstuff, beverage tobacco |
4,4 |
|||
Base metals and articles thereof |
4,1 |
|||
EAC trading partners | ||||
share (%) | India |
21,5 |
9 |
18,9 |
China |
20,2 |
7,3 |
17,5 |
|
EU |
12,3 |
24,7 |
14,9 |
|
U.A. Emirates |
8,1 |
7,4 |
7,9 |
|
US |
3,6 |
5,5 |
4 |
|
Source: http://ec.europa.eu/trade/policy/countries-and-regions/statistics/ |
The EU provides immediate duty free and quota free market access to all products to EPA signatories (with the exception of South Africa, which has a less open regime with a longer time frame for liberalization). On the ACP side, markets are not fully liberalized. The degree of liberalization varies between 75% for ECOWAS countries and 98% in the case of Seychelles over up to 25 years, reflecting countries’ and regions’ level of development and capacity to open up their goods market. Regions excluded mainly products deemed sensitive for their domestic economies. These include agricultural products and some industrial products that are being produced at home.
SACU |
ECOWAS |
|
|
A number of issues were considered to be ‘contentious’, given their critical importance for industrial, development, food security and foreign policy purposes. These include:
DP – ECOWAS and SADC Economic Partnership Agreements: A Comparative Analysis
Presentation – Is there a life after EPAs? The future of EU-Africa trade relations
BN – Economic Partnership Agreements: Towards the Finishing Line?
Contentious issues of the EPA negotiations and regional delivery mechanisms for Aid for Trade
The Raw Materials Initiative and the way forward in EPA negotiations
Summary Report on the Consultative workshop on A Monitoring Process for the implementation of EPAs.
On the importance of Monitoring Economic Partnership Agreements
Economic Partnership Agreements: Where are we and what challenges for development?
Economic Partnership Agreements: Where are we and which way forward?
Trade Talks Set to Disrupt Africa-Europe Relations and Poison the Upcoming Africa-EU Summit
What Would it Take to Make an EPA Economically and Politically Feasible for Europe and Africa?
Exploring ACP responses to the EU proposal for Regional Economic Partnership Agreements
The Future of ACP-EU Trade Relations: An Overview of the Forthcoming Negotiations
How Did David Prepare to Talk to Goliath? South Africas experience of trade negotiations with the EU
How to make EPAs WTO compatible? Reforming the rules on regional trade agreements
WTO and EPA Negotiations: For an Enhanced coordination of ACP Positions on Agriculture
Alternative (to) EPAs Possible scenarios for the future ACP trade relations with the EU
Monitoring Economic Partnership Agreements: A methodological overview
Implementing the Economic Partnership Agreement: Challenges and Bottlenecks in the CARIFORUM Region
Operationalising the West African EPA Development Programme Moving beyond the Paperwork
Trade Liberalisation and Fiscal Adjustment: The Case of EPAs in Africa
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