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Thursday, 23 May 2013

EPAs: “return to zero and start again”

It would be "rather unwise" for Africa to grant preferential market access to Europe, and, instead of continuing to threaten with deadlines over the Economic Partnership Agreement (EPAs), the EU should rethink its strategy, Economist Paul Collier, Co-Director, Centre for the Study of African Economies said.
Europe should open up for Africa, while African countries open their markets for each other. Among the continent’s 55 countries, there are high trade barriers, he claims. If all of Africa were to become a free trade zone, that would also have advantages for Europe. Africa would become wealthier and provide a large market where Europe could operate more easily, he belives.
The European Parliament has set a deadline of early 2014 for countries in southern Africa to open up their markets: all the African-Caribbean-Pacific (ACP) countries that have not yet signed the Economic Partnership Agreement (EPA) must now sign the pact by 1 October 2014. Failure to comply could mean they woulld no longer be able to export duty-free to the EU zone.

Background on ACP-EU trade agreements:
For decades Europe’s former colonies have enjoyed preferential access to European markets, thanks to various trade agreements. For example, in 1975, 79 countries from the ACP countries), signed a trade agreement in Lome, which offered one-sided market access. However, in 2000, the World Trade Organization (WTO) declared it unlawful. Thus, the Cotonou Agreement followed. The agreement brings however  a new scheme: the EPAs, which provide for reciprocal trade agreements, which implies that not only the EU has duty-free access for ACP exports, but ACP countries also provide duty-free access to their markets. The negotiation of EPAs started in 2008.
Yet, the World Trade Organization does allow for unilateral market access in exceptional cases. This applies to the world’s least developed countries, 34 of which are in Africa. Thus, the ACP least developed countries (LDCs) are covered by the "Everything But Arms" regulation, under which they face no consequences if they do not sign the free trade agreement with the EU, but can continue to export all products except arms duty-free into the EU. But, non- LDCs countries see themselves obliged to sign the EPAs now by 2014. More developed countries such as Kenya, Ghana, Cameroon and Botswana would lose otherwise their privileged access to EU markets.

Nevertheless, Collier believes the EU’s interpretation of the WTO rules, based on which the EPAs idea is founded, is too strict. He points out that, since 2000, the US has allowed tariff-free access for many products from Africa, thanks to the "African Growth and Opportunity Act " (AGOA) - and the WTO has never intervened.
What is more, within the EU, even German Chancellor, Angela Merkel’s advisor on African affairs, Günter Nooke has doubts: "I think we have to return to zero and start again,“ he is reported to have declared.

Source: Deutsche Welle