Economic Partnership Agreements

Economic Partnership Agreements are a scheme to create a free-trade area (FTA) between the European Union and the ACP countries. They are a response to continuing criticism that the non-reciprocal and discriminating preferential trade agreements offered by the EU are incompatible with WTO rules.

Hence, the EPAs' key feature is their reciprocity and their non-discriminatory nature. They involve the phased out removal of all trade preferences which have been established since 1975 as well as the progressive removal of trade barriers between the EU and their ACP partners. In order to fulfil the criterion of being a non-discriminatory agreement, the EPAs are open to all developing countries, thereby effectively terminating the ACP group as the main development partner of the EU.

So far the ACP countries have formed six regional groupings in which they intend to enter into EPAs with the European Union. These regional groupings are the [Union Économique et Monétaire Ouest Africaine] , [the Communauté économique et monétaire de l'Afrique centrale], [the Southern African Development Community], [East African Community], [Caribbean Community], and the Pacific.

The establishment of a reciprocal PTA confronts the EU with the problem of how to “reconcile the special status of the ACP Group with the EU’s obligations to the WTO” (Gillson & Grimm, 2004). The solution proposed for this dilemma is a PTA which is only as reciprocal as necessary to fulfil WTO criteria. In reality, the ACP countries will have some room to manoeuvre and to maintain some limited protection of their most vital products (Stevens & Kennan, 2005). The extent to which trade must be liberalised under the new EPAs is still a widely debated issue and it remains to be seen whether the WTO provisions regulating regional trade agreements will be revised in favour of the EPA scheme at the end of the Doha Round.

True to the Cotonou principle of differentiation and regionalisation the developing countries are encouraged to enter into the EPAs as regional groupings. This, however, causes the problem for the EU of how to reconcile this approach with the previous special treatment of the group of LDCs among the ACP countries (Gillson & Grimm, 2004). At the moment, 39 of the 77 ACP countries are defined as LDCs by the United Nations. The LDCs constitute a special group among the developing countries and have usually been treated separately and also under EPAs a special arrangement will be made for this particular group. As opposed to the other ACP countries, the group of LDCs will be invited to reject the EPAs and continue trade relations under the ‘Everything But Arms’ Regulation (EBA). Launched in 2001 by the Council of Ministers, this amendment to the GSP has ever since regulated the trade relations between the EU and the LDCs, granting duty-free access to all products from LDCs without any quantitative restrictions – except to arms and munitions (Article 7). It has been criticised that the EBA initiative prevents LDCs “to open up their markets for EU products within the context of an EPA” (Gillson & Grimm, 2004).

It is obvious from the heated discussion among development policy experts about the EPAs that they are at best an improvement to the current situation but remain far from ideal. They bring many potential dangers for the developing countries and one may wonder whom these new arrangements are really supposed to benefit.

regional groupings (six)