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ACP/EU Partnership Agreement is a comprehensive aid and trade
agreement concluded between 77 ACP (African, Caribbean and
Pacific) countries and the European Union. It was signed in
June 2000 in Cotonou (Benin) and is therefore commonly called
“the Cotonou Agreement”. The Cotonou Agreement
builds on twenty-five years of ACP-EU co-operation under 4
successive Lome Conventions. The agreement lasts for 20 years
and contains a clause allowing it to be revised every 5 years.
The two main pillars of ACP-EU co-operation are: economic
and trade co-operation; and aid.
Under the 4 successive Lome conventions (1975-2000), the EU
granted a preferential trade regime to ACP countries through
trade preferences, commodity protocols and other instruments
of trade co-operation such as financial and technical aid.
Under Cotonou, the current non-reciprocal tariff preferences
will be maintained until 31st Dec. 2007. Starting from 2008,
a set of reciprocal Economic Partnership Agreements (EPAs)
will replace them, following negotiations that began in September
2002. Negotiations are to be carried out in 2 phases; at the
pan-ACP-EU level, to agree on principles and approaches to
be adopted, the structure and the modalities for the negotiation
and cross-cutting issues of common interest for the ACP; and
from September 2003 negotiations on specific regional EPAs.
Although explicit reference to Regional Economic Partnership
Agreements (REPAs) is excluded from the final text of the
Cotonou Agreement, the EC has always operated on the assumption
that the EPA negotiations would be concluded on a regional
basis, with those regions which have functioning regional
integration processes and mechanisms. This approach was motivated
by practical considerations of the greater efficiency of conducting
complex trade and aid negotiations with groups of quite closely
related countries, rather than with all 77 ACP states together;
and also by an officially declared intention to support the
processes of regional cooperation and integration being undertaken
between various groupings of ACP countries.
The on-going negotiations are complex without clear outcomes
and are between two unequal parties. The ACP countries are
former colonies of the EU and they are amongst the poorest
world’s nations, requiring resources from the EU to
enable them to engage in the negotiations. They are also divided
between Least Developed Countries (LDCs) and non-LDCs; they
are divided by initiatives like Everything But Arms (EBA)
and the African Growth and Opportunity Act (AGOA) for which
some qualify and others do not. They are also divided between
different continents. The EU, on the other hand, is united
and powerful.
The ACP-EU negotiations are supposed to yield EPAs that would
be development oriented, free trade areas (FTAs) and WTO compatible.
Not all ACP countries will have to open their markets to EU
products after 2008. There are several options: one, they
can choose to negotiate with the EU, either as independent
countries, or as part of an EPA.; two, they can revert to
the old Generalised System of Preferences (GSP) regime, which
is supposed to be revised in 2004; three, they can look for
“another alternative” which has as yet not been
discussed.
In order to carry out any meaningful negotiations, ACP countries
collectively and individually need to carry out impact assessments
- economy-wide and sector specific - to determine the overall
effects of trade liberalisation with the EU. The assessments
should also cover the following issues that must be resolved
by the ACP countries, prior to the definition of the geographical
basis for the negotiations of EPA or other alternative trade
arrangements.
The Way Forward
1. Clarification of the objectives to be addressed through
future trade negotiations; for the EU, the central objective
of the negotiations of reducing and eventually eradicating
poverty in ACP countries, is qualified by “the gradual
integration of ACP countries into the world economy“.
However, from the ACP perspective, the key issue is not “the
gradual integration of ACP countries into the world economy“,
but the transformation of the basis of ACP integration into
the world economy. The key issue to be addressed by ACP countries
therefore, is whether the current approach and parameters
for the establishment of the EPAs being put forward by the
EU, will positively transform the basis of the integration
of ACP countries into the world economy, so as to allow for
the promotion of sustainable poverty focussed forms of development.
2. The impact of the introduction of free
trade with the EU, on the fiscal revenues of ACP governments.
In most ACP countries, especially in Africa since the EU is
the major trading partner, revenues raised on imports from
the EU often represent a significant proportion of the total
customs duties raised. The elimination of the duties on imports
from the EU could thus have a major effect on the fiscal position
of a number of African governments.
3. The protection of the rights of LDCs to
non-reciprocal trade preferences, especially given the regional
market integration efforts underway throughout the ACP. Although
under the Cotonou Agreement LDCs retain their right to non-reciprocal
trade preferences, the EC has qualified these rights. Where
LDCs form part of regional groupings which have chosen to
negotiate reciprocal preferential trade arrangements with
the EU, they will be expected to carry the same obligations
as are negotiated by the region as a whole. Since LDCs form
at least half and often the vast majority, of the countries
in each of the regional groupings in Africa with whom the
EU has regional co-operation programmes, virtually all LDCs
will find themselves embroiled in any regionally based EPA
negotiations. There are major concerns that within the EU´s
approach to the negotiations with regional groupings, its
focus will be on the perceived trade strengths of the strongest
members of the regional grouping, rather than the real trade
weaknesses of the less developed and more vulnerable members
of the regional groupings. Therefore ACP countries need to
build into the very design of any reciprocal preferential
trade arrangement, the vulnerability of these countries within
the regional groupings.
4. Addressing the adverse effects of a reformed
Common Agricultural Policy (CAP) on the development of ACP
agricultural and value added agro-processing sectors. Given
the importance of agricultural trade (36% of ACP exports are
to the EU), to the ACP countries and the significance of agriculture
within the production structures of many ACP economies, the
ACP countries must ensure that the EC makes a substantive
and comprehensive commitment to discuss the external effects
of the CAP reform as an integral part of the negotiations.
5. Addressing the supply side constraints
so as to enable the ACP producers to exploit any new opportunities
emerging as a result of the introduction of free trade with
the EU. The EU maintains that EPAs will promote more effective
action in addressing supply side constraints by opening up
ACP economies to competition. This, it is argued, will lead
to the development of more competitive forms of ACP production,
capable of promoting sustainable, poverty focussed development.
Yet the supply side constraints facing ACP producers cannot
be solved by a policy shift in one policy area such as external
trade policy. Therefore, the underlying supply side constraints
need to be addressed before steps are taken to introduce free
trade with the EU, as they affect the economic competitiveness
of many ACP countries.
6. Reviewing the scope of market access,
the ACP countries need to ensure that they secure preferential
access to the EU market beyond 2008, in areas which bring
meaningful benefit to ACP producers and traders.
7. The establishment of appropriate structures,
forms and time tables for negotiations, which take into account
the capacity constraints facing ACP countries, to negotiate
complex trade negotiations at the regional (with regional
partners), inter-regional (with the EU), and multilateral
(WTO) levels. ACP countries need to give priority to the building
and consolidation of intra-ACP regional co-operation, before
proceeding with negotiations of reciprocal preferential trade
arrangement with the EU.
8. Clarification of the areas of negotiation
under trade related areas and services. Under the Cotonou
agreement, it was agreed that the negotiations will include:
competition policy, protection of intellectual property rights,
standardisation and certification, sanitary and phyto-sanitary
measures, trade and environment, trade and labour standards.
In addition however, the EU wants to see discussions launched
on investment, public procurement, standards and technical
regulations and conformity assessment, as well as data protection.
The issue of public procurement is not mentioned in the Cotonou
agreement and the Doha Declaration only mentions transparency
in government procurement, on which negotiations may only
start after the fifth WTO Ministerial on the basis of an “explicit
consensus” of all WTO members. ACP countries must therefore
guard against going beyond the existing commitments.
9. ACP countries must decide on whether or
not to negotiate, how to negotiate - as individuals or as
a “region”, as well as the implications of the
option chosen.
ACP countries need to analyse, strategise,
and prepare for these very difficult and complex negotiations.
This also demands the active engagement of and effective interventions
by non-governmental organisations (NGOs). The ACP guidelines
call for greater stakeholder involvement in the negotiations.
The onus is on the NGOs to establish concrete mechanisms for
this involvement.
References
ACP –EU Partnership Agreement: June 23 2000, Cotonou
ACP-EU Negotiations a Farce: Yash Tandon, SEATINI Bulletin
Vol.5 No. 18
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