Historical Perspective
ESA – EPA
Historical Perspective:
Economic Partnership Agreements (EPAs) are being negotiated between the European Union and blocks of African, Caribbean and Pacific (ACP countries). The EPAs were anticipated in the Cotonou Agreement and are, apart from other principles, intended to ensure that trade relations between the two groups are WTO compatible.
www.acpsec.org/en/epa/note_on_epa.htm
In eastern and southern Africa the blocks have evolved into three negotiating groups which have all received support in one form or another from RTFP: ESA, EAC and the SADC 7. They have initialled different interim EPAs and committed themselves to negotiate full EPAs to be signed by the end of 2008 (in the case of countries signing the ESA and SADC texts) and mid-2009 in the case of countries signing the EAC text.
For a comprehensive Status Report of the EPA negotiations in the eastern and southern Africa region (including detailed tables indicating which ACP countries are negotiating under EPAs, which under EBA and which under GSP; as well as ESA & EAC tariff schedules, illustrative examples of the EUs new tariffs, possible costs and benefits of signing on EPA, trading arrangements with the EU etc), refer to “Status Report” Feb 2008 by RTFP Programme Director
For a description of how the initial configurations into the ESA and the SADC 7 evolved and the implications on the negotiations of the TDCA between the EU and South Africa, see the paper on "Negotiating an Economic Partnership Agreement for Eastern and Southern Africa" written in October 2005 (351 Kb) by the RTFP Programme Director. It was intended that EPAs would contribute to greater regional integration, however, in the early days a ‘spaghetti’ diagram was drawn up showing just how difficult that might be.
The rationale for negotiating an ESA EPA can also be seen in the fact that the development needs of ESA ACP countries eligible to negotiate EPAs are remarkably similar. Exports from the ESA countries into the EU are almost the same and include tourism; fish and fish products; horticultural crops and fresh vegetables; tea and coffee; cotton; textiles and apparel; and commodities covered by the protocols (mainly sugar but also including beef).
The structure of the ESA ACP economies is also very similar and, as a consequence, there are very few exports to the EU of manufactured items, except textiles and apparel, or of services, apart from tourism. For those ESA ACP countries eligible to negotiate an EPA and that actually export to the EU, the EU market access constraints they faced were almost identical and could be placed into two main categories, these being rules of origin and regulations concerning sanitary and phyto-sanitary and environmental issues. Tariff issues were of lesser importance in terms of market access.
The main costs and benefits of an EPA are determined by whether an ACP country is an LDC or not. LDCs are automatically eligible for non-reciprocal duty-free quota-free market access into the EU market under Everything-but-Arms (EBA). For non-LDCs the only other option to the market access arrangements negotiated under an EPA is the Generalised System of Preference (GSP) arrangement. This is a preferential arrangement but is not as beneficial as the Cotonou trading arrangement or the EPA market access offers from the EC.
There are potential costs and benefits to ACP countries in opening up their markets to European Union Member States. The net outcome will depend on whether the ACP country or region concerned is able to take advantage of the opportunities offered from trade liberalisation. If a country has poor infrastructure and a poor legislative environment and, consequently, a small and relatively inefficient production system, it is likely that it will not be able to take advantage of a liberal trading environment. On the other hand, if a country has a relatively efficient production system then the benefits of a liberalised trading system will be more apparent.