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Briefings and background notes

EPA Development Support

Why the ECDPM intends to work in this area, what it plans to do and how

2006

ECDPM. 2006. EPA Development Support: Why the ECDPM intends to work in this area, what it plans to do and how. ECDPM Publication.

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The development dimensions of EPAs
Everyone agrees: the new Economic Partnership Agreements (EPAs) between the European Union (EU) and the African, Caribbean and Pacific (ACP) regions should be first and foremost about deve- lopment. By facilitating the integration of the ACP countries into the world economy, and building on regional integration initiatives, EPAs should stimulate economic development and export growth, and hence contribute to sustainable development and poverty allevia- tion. Not only are these objectives stated in the Cotonou Partnership Agreement, they have also been restated on nume- rous occasions, by the European Union (its institutions and member states), the ACP regions and countries and various actors from civil society. 

In the case of developing economies, certain basic conditions must be put in place if free trade agreements are to lead to economic development and export growth. First of all, developing countries must be able both to bear the potential cost and to seize the potential benefits of liberalisation. On the one hand, the reduced collection of tariff duties as a result of import liberalisation affects government revenues and increased competition from foreign producers could disrupt domestic economic sectors. 

On the other hand, supply-side constraints such as a poor economic infrastructure, an unfavourable investment climate, weak institutions and the lack of a trained workforce prevent many developing countries from taking advantage of new export opportunities created by trade liberalisation in developed economies. Without adequate policies and resources to adjust and foster the necessary economic transformation and to produce and market their goods competitively, ACP countries are unlikely to fully benefit from new free trade arrangements with the EU. 

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Photo By Dietmar Temps under Creative Commons

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Economic Transformation and TradeAid for TradeBackground notesBriefings and background notesEconomic Partnership Agreements (EPAs)