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Economic Partnership Agreements: A new approach to ACP-EU economic and trade cooperation

Economic Partnership Agreements: A new approach to ACP-EU economic and trade cooperation Claude Maerten, European Commission Head of Unit TRADE C 2 (claude.maerten@cec.eu.int) TRALAC’s Annual International Trade Law Conference 11 November 2004. BACKGROUND.

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Economic Partnership Agreements: A new approach to ACP-EU economic and trade cooperation

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  1. Economic Partnership Agreements: A new approach to ACP-EU economic and trade cooperation Claude Maerten, European Commission Head of Unit TRADE C 2 (claude.maerten@cec.eu.int) TRALAC’s Annual International Trade Law Conference 11 November 2004

  2. BACKGROUND

  3. EU Trade relations with ACP countries still the same since Lomé I (1975)A need for changeAgreed in ACP-EU Cotonou AgreementWHY ?

  4. EU Trade relations with ACP countries Since Lomé I (1975) Non reciprocal trade preferences All industrial goods enter the EU duty free 80% of agricultural products enter the EU duty free, and the remaining 20% benefit from preferences DID IT WORK ?

  5. EU Trade relations with ACP countries Since Lomé I (1975) NO, few successful stories Fisheries, Agriculture, Commodities; Mauritius, Kenya, Cameroon, Ivory Coast, Zimbabwe; Same trade relationship during the last 30 years in a new world economic environment

  6. EU Trade relations with ACP countries Since Lomé I (1975) Trade preferences had been eroded considerably (Kennedy Round, Tokyo round, Uruguay Round), and more to come with DDA In the 80s, margin of preference around 10% Today, lower than 4% in comparison with MFN, 2% in comparison with GS Not enough in the past Not a solution for the future

  7. Quick look at the data

  8. Quick look at the data Lack of ACP export diversification 5 PRODUCTS = 60 % of total Exports (petroleum, diamonds, cocoa, fish, and wood products) AFRICAN COUNTRIES REPRESENT 60 % OF TOTAL ACP EXPORT Lome trade regime as a tool to promote exports failed

  9. Lessons learnt • Unilateral Preferences are Not Enough • Trade relationship should go beyond market access • Promote a synergy between aid and trade • Mainstream trade in development support • Need for domestic reforms • Develop supply capacities • WTO compatibility

  10. RATIONALE FOR EPAS

  11. Towards a new approach The Cornerstones of EPAs • EU policies • The Cotonou Agreement • Development dimension • Regional integration • WTO compatibility

  12. EU Policies • Trade Policy • Contribute to growth, employment and competitiveness in Europe • Multilateral route the top priority; Complete the Doha round • Deepen bilateral and regional trade relations; regional integration • Development policy • The 6 priorities • CAP, Fisheries policy • EPA as a link for EU-ACP partnership

  13. The Cotonou Agreement • Objectives • Sustainable development • Poverty eradication • Integration into the global economy • EPA is the trade chapter

  14. Development dimension • Monterey consensus • sustainable, stable, transparent domestic policies in the South; • Market Access granted by developed countries • Mainstream trade policies in development strategies • PRSP, Integrated Framework, EU development policy; CSP; NIP and RIP • Trade and Aid • Coherence; Complementarity; Coordination • (PRSP, Integrated Framework, EU development policy; CSP; NIP and RIP) • Supply capacities; private sector development, … • Funding • Market access and Rules • Complementarity, parallelism between DDA, EPA

  15. Regional integration • Support ACP political choices (coherence, AU) • First step towards gradual integration into world economy • Enlarging markets for attracting investment • Combined South-South-North cooperation (lock-in effects)

  16. WTO Compatibility • Lome/Cotonou waiver • Price to pay against ACP interests • Enabling clause • Link between the level of RI and the level of our ambitions • Article XXIV GATT • Existing flexibility enough • The debate • Article V GATS • Meaning of WTO +

  17. WTO Compatibility Possible scenarios for reciprocity • West Africa 81% • Central Africa 79% • East and Southern Africa 80% • Southern Africa 76% • Caribbean 83% • Pacific 67%

  18. Conclusion • ACP development is the objective; Trade is a tool • Regional integration as a political, economic and development challenge • EPAs are an opportunity

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