Addressing the fiscal effects of an EPA
The African, Caribbean and Pacific (ACP) countries are engaged in the most substantive reform of their trade regime. For more than three decades, the ACP countries have benefited from a generous preferential trade regime from the European Communities, under which most ACP products could enter the European markets without any restrictions. With the signing of the Cotonou Agreement in 2000, the ACP countries and the European Union (EU) agreed to set new trade arrangements that would build on the regional integration process of the ACP and foster their integration in the world economy, in a way that promotes their development and contributes to poverty alleviation. This new ACP-EU trade regime should also be compatible with the prevailing rules of the World Trade Organisation (WTO).
It is on this basis that the ACP countries, configured on six self-determined regional groupings and the EU began negotiations in September 2002 on Economic Partnership Agreements (EPAs), due to enter into force by 1 January 2008.
These EPAs will be free trade areas (FTAs) between each of the 6 ACP regions and the EU, which aim to address both trade and trade-related issues. Hence, for the first time the ACP will have to open up on a reciprocal basis their markets to most EU products.
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