EPAs' 10th anniversary: The never ending story
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At the opening ceremony of the negotiations of Economic Partnership Agreements (EPAs) between the European Union (EU) and the African, Caribbean and Pacific (ACP) States the chairperson of the ACP Group arrived late, keeping hundreds of officials and diplomats, not least then EU Trade Commissioner Pascal Lamy, waiting. This was on 27 September 2002.Ten years and four EU Trade Commissioners later, the EU still seems to be waiting for many ACP countries to come along. Perhaps with few exceptions, the EPA agenda has not generated the enthusiasm for effective development partnership it was meant to stimulate. To date, only 36 ACP countries have concluded some type of agreement, out of them 8 still have not signed it though and 15 have not even started ratification. So, while the only full regional EPA covering the 15 Caribbean countries can be deemed a diplomatic success, the negotiations on a regional basis with other African and Pacific continue at a slow pace, having gone way beyond the initial deadline set for 2007. There is now a new sense of optimism among some EPA negotiators, not least in the European Commission, which could mean that the conclusion of more trade agreements is in sight. This would be a welcome outcome, provided it reflects key interests of all parties. But many uncertainties, and the disappointing experience of protracted negotiations definitely call for caution.
The new deadlineThe European Commission has been trying to give an impetus to the negotiations by issuing a new deadline to the ACP. Last autumn, it announced that countries that have concluded an EPA but not taken the necessary steps to sign it or to initiate its ratification would no longer benefit from the market access it grants them to Europe (codified in its Market Access Regulation MAR1528/2007), as of 1 January 2014. The objective is simple: if African and Pacific countries want to continue to benefit from duty-free and quota-free EPA market access, they need to have successfully concluded the negotiations towards new regional EPAs - the prime objective of the EU – by 2014. Those 36 countries with existing interim EPAs must have confirmed their commitments by having signed and started the ratification of their existing agreements by then, to seek compliance with WTO rules. Others will either fall under one of the schemes of the EU’s new Generalised System of Preferences (i.e. Everything but Arms, Standard GSP or GSP Plus) or they will have no preferences (as might be the case for Botswana and Namibia for instance). The arbitrary deadline the EU wants to set - 2014 as proposed by the Commission and endorsed by the Council, or 2016 as voted on 13 September 2012 by the European Parliament – is contested. The further decision process with the European Commission, Council and Parliament will tell us. But it is not sure that it really matters. The key questions are: what could negotiators be able to achieve over the next year(s) that they have not been able to achieve over the last decade? And is ‘time’ a key factor to unlock some of the current bottlenecks? If more time is justifiable, it should be granted of course. But the rationale for it should be well articulated. Buying time (for the sake of it) might have a high opportunity costs for little or no reward, as EPA negotiations might still not be concluded. Keeping them ongoing is a costly process, including in terms of limited capacity and political capital.
Which way forward?Deadlines or not, at this stage, all parties should have an interest in seeking a concrete way forward: either the successful conclusion of the EPA negotiations, or an end to it. In any case, setting a deadline cannot be the only strategy. To find a way out of the current impasse, both sides must adopt a more comprehensive approach. A proper assessment of the negotiations so far is required. It should entail identification of the bottlenecks, region-by-region, as well as the achievements and partial agreements found so far, chapter-by-chapter and provision-by-provision. Drawing of the experience of non-ACP countries negotiating free trade agreements with the EU would also help. While each regional grouping has its specificities, there are lessons to be drawn from achievements in the EPA negotiations in one region for the others. The EU must propose concrete options to each region, highlighting the flexibility it could provide, as well as specifying its red lines. Similarly, it is high time for African countries and regions to reassess their position on EPAs, prioritise their objectives and identify potential issues where concessions are possible to reach an agreement. In doing so, they have to assess the conditions under which they would be willing or not to conclude an EPA. It is most likely that some African and/or Pacific countries will not want to conclude an EPA with the EU. This will have consequences not only for their relations with their largest trading partner, but for the regional integration process they are involved in. This is true in particular where a common position on the EPA could not be found on a regional basis and could have dramatic consequences for (would-be) customs unions, as in West Africa. It is thus important that the EU, but also the ACP countries and regions concerned, identify possible scenarios and fall back positions should the regional coherence be at risk because of the EPA process. Wishing for the best cannot suffice. Last, but not least, all parties must recognise that the EPA process is first and foremost a political issue, not a technical one. It will have consequences on the strategic relationship with the EU, far beyond the trade arena. It will also have strong repercussions on the regional dynamics in the ACP and their relations with third countries. -- San Bilal is Head of ECDPM’s Economic Governance Programme. This blog post features the authors’ personal views and does not represent the view of ECDPM.