The EU is locked in last minute negotiations with countries from the African, Caribbean, and Pacific (ACP) group on Economic Partnership Agreements (EPAs). Any country not signed up by 1 January faces losing its EU trade privileges under the EU’s (self-imposed?) deadline.
The war of words is ferocious. Oxfam argues that the EU is pursuing “… an extremely aggressive agenda that pays little more than lip service to development”. Bob Geldof and Africa advocacy group Data have weighed-in with an alternative African Trade Initiative. EU trade commissioner Peter Mandelson retorts that campaigning NGOs are putting huge political pressure on countries not to sign, and are giving out misleading information. Together with Louis Michel (EU development commissioner) he recently argued in the Guardian that: “critics of the EU’s trade agreements are gambling with livelihoods in the developing world”.
Last minute confusion reigns over who has signed and what they are signing up to. Trade-expert Chris Stevens is tracking the story on the ODI blog. The ACP’s manufacturers worry that there will be no tariff protection for industrial development. Mandelson argues that the trade preferences of the last 30 years have not delivered much industrial development, and that EPAs offer a new beginning. The WTO gave the EU and ACP 7 years to sort this out, so this is hardly rushing it, concludes the EU trade commissioner.
The East African Community, the Seychelles, and Zimbabwe have signed. Angola, Fiji and Papua New Guinea seem willing. Some Southern Africa Development Community (SADC) members were close to signing, but South Africa and Namibia have refused to sign-up. They don’t want to be bound to offering the EU the same terms as any future bilateral trade agreements with other parties (under the EPA ‘most-favoured nation’ clause). Loss of EU privileges will hit Namibia’s beef industry. South Africa need not worry about an EPA: it already has a bilateral trade treaty with the EU.
The EU argues that it offering 100% market access under EPAs (except for sugar and rice) and that if any partners grant more market access to others in future deals, then the EU should get the same treatment. The EU is pursuing the same line in negotiations on a trade deal with India. Services have been left for a future second stage.
The process to put in place EPAs by end-2007 began after the WTO ruled against the longstanding agreement governing the EU’s trade with the 79-member ACP group (mostly former European colonies). If a country is not signed up to an EPA by the deadline then the EU will apply the Generalised System of Preferences (GSPs) and its less generous tariff rates.