Summary: The European Union(EU) and the Arican, Caribbean,and Pacifc (ACP) countries areentering the fnal phase onegotiations on EconomicPartnership Agreements (EPAs),a set o WTO-compliant preer-ential trade agreements thatwill substitute the current non-reciprocal preerence scheme.Such agreements would liber-alize bilateral trade betweenthe EU and six ACP regionalgroupings. A proposed open-ing o ACP markets might wellprovoke trade diversion, causeserious government revenuelosses, and hamper regionalintegration. This policy brieputs orward an alternativepath to liberalization that wouldminimize these costs while stilladdressing the WTO constraintand their developmental goals.
Economic Policy Program
For the past ve years, the EuropeanUnion (EU) and the Arican, Caribbean,and Pacic (ACP) countries have beenengaged in reorm negotiations o the“Cotonou Agreements,” a set o tradeagreements that have continued thealmost 40 years o preerential marketaccess oered by the EU to the exportso its ormer colonies.This reorm was initiated to bring thesepreerential trade arrangements intocompliance with World Trade Organiza-tion (WTO) rules. Indeed, the WTOallows or preerences only when they are part o reciprocal ree trade agree-ments or when they benet developingcountries (DCs) on a non-discriminatory basis. And, as Cotonou preerences arenot reciprocal (EU exports do ace tariswhen entering ACP markets) and areextended to only some DCs (and notmany DCs in Asia and South America),they are not compliant with WTOlegislation. Until now, this situation wasmaintained through the granting o awaiver at the WTO. However, this waiveris due to expire on December 31, 2007.As a result, the EU is trying to convinceits ACP partners to conclude newWTO-compliant ree trade agreementsthrough the signature o the “EconomicPartnership Agreements” (EPAs). Suchagreements would liberalize bilateraltrade between the EU and six ACPregional groupings, among which reetrade would also be established.
The logic behind the EuropeanCommission’s (EC) promotion o theEPAs also relies on the belie that thevirtues o regional trade integrationwould benet the ACPs: specialization,economies o scale, diminution o trading costs, and increased investment.
One Minute to Midnight:Is There Still Time to Rethink EPAs?
How the European Union and the Arican, Caribbean, and Pacifccountries can reorm preerential trade arrangements, comply withWTO rules, and promote development.
by Claire Delpeuch, Groupe d’Economie Mondiale at Sciences Po
1744 R Street NWWashington, DC 20009T 1 202 745 3950F 1 202 265 1662E firstname.lastname@example.org
Claire Delpeuch is a research assistant at the Grouped’Economie Mondiale at Sciences Po (GEM). GEM is anindependent and non-partisan European, Paris-based researchcenter that seeks to promote debate on international economicintegration – its real magnitude, oreseeable costs and benets.In particular, it aims to provide analysis o the impact o two keypolicy areas with wide-ranging eects: trade policy and regula-tory policy. This paper is largely based on a working paper byDelpeuch and Harb (2007). The author would like to thankP. Messerlin, Joe Guinan, Hilleary Smith, and Georges Harb ortheir very useul comments.
These regional entities are: West Arica (Benin, Burkina Faso,Cape Verde, Gambia, Ghana, Guinea, Guinea Bissau, IvoryCoast, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal SierraLeone, and Togo); Central Arica (Cameroon, Central AricanRepublic, Chad, Congo, the Democratic Republic o Congo,Equatorial Guinea, Gabon and Sao Tome, and Principe); EasternArica (Burundi, Comoros, Djibouti, Eritrea, Ethiopia, Kenya,Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan,Uganda, Zambia, and Zimbabwe); Austral Arica (Angola,Botswana, Lesotho, Mozambique, Namibia, Swaziland andTanzania); the Caribbean (Antigua and Barbuda, the Bahamas,Barbados, Belize, Dominica, Dominican Republic, Grenada,Guyana, Haiti, Jamaica, St. Kitts and the Grenadines, Suriname,and Trinidad and Tobago); and the Pacic (Cook Islands, Fiji,Kiribati, Marshall Islands, Federated States o Micronesia,Nauru, Niue, Palau, Papua New Guinea, Samoa, SolomonIslands, Tonga, Tuvalu, and Vanuatu).