Concept Note: Economic Partnership Agreements

Economic Partnership Agreements (EPA’s) are being negotiated since 27 September 2002 between the European Union and 75 ACP countries in accordance with the overall EU-ACP Partnership Agreement signed in Cotonou in June 2000. EPAs are meant to replace the current preferential EU-ACP trade regime that will expire on 31 December 2007.

The Cotonou Agreement defines EPAs as the main instrument of economic and trade co-operation the objectives and principles of which EPAs are set out in detail: EPAs shall aim at fostering the smooth and gradual integration of the ACP States into the world economy, with due regard for their political choices and development priorities, thereby promoting their sustainable development and contributing to poverty eradication in the ACP countries.

Both ACP and EU have repeatedly stated that EPAs should be first and foremost “instruments of development”. EPAs therefore are an ideal case to assess the coherence between the EU trade and development policy. No other trade negotiations ever launched by the EU, not even the Doha Round, have received so much development emphasis as EPAs.

Yet no other bilateral trade negotiations of the EU have been met with so much opposition form civil society and trading partners alike. Within certain sectors of civil society a “Stop EPA Campaign” has been launched; and ACP ministers have adopted official resolutions denouncing the gap that exists between the states development goals of the negotiations and the negotiating practice.

Did coherence between the stated goals get lost in the implementation? Is “coherence” or the lack thereof in fact an adequate concept to assess policy implementation? What if there is a different understanding of what “development” means and what the best ways are to get there?

For the European Commission remains convinced that its policies are perfectly coherent and that comprehensive regional free trade agreements supported with the development resources at its disposal will make a major contribution to development in ACP countries. The “free trade” component will expose the domestic economy to greater competitive pressures which will boost productivity; the “regional” component will create economies of scale and the “comprehensive” dimension, which refers to the inclusion of trade related issues such as investment, competition and intellectual property rights enforcement, will create a business friendly environment that will attract investments.

Others are convinced that a change of the regulatory environment and a larger market will not suffice to boost development and that structural weaknesses and supply side constraints need to be addressed first. Additional means need to be mobilised to make development countries ready to face competition and to meet adjustment costs. Meanwhile protection of weaker sectors remains a necessity for a long time.

Therefore the question put before the working group on trade, coherence and EPA’s is this: are EPAs an obstacle in achieving development goals?