Since 1975 with the first Lomé Convention, the EU has granted non-reciprocal trade preferences to its African, Caribbean and Pacific (ACP) partner countries. However, this type of trade relationship between the EU and the ACP countries could not be continued.
First of all, the preferential access to the EU market failed to stimulate growth in the ACP countries and to integrate the ACP countries into the world economy; specifically, the proportion of EU imports from ACP countries has dropped from 7% to 3% since 1975. Secondly, the non-reciprocal preferences did not comply with WTO rules (Article I of GATT) and were not covered by the Generalized System of Preferences (GSP) enabling clause, as they discriminated among developing countries on the basis of non-objective criteria. A WTO waiver was, therefore, in place to allow the EU to grant the ACP countries temporary preferential access to the EU, which was, however, increasingly being challenged by other members of the WTO.
In the Cotonou Agreement of 2000, the EU and the ACP countries therefore agreed to replace the previous non-reciprocal preferences by WTO compatible reciprocal trade arrangements in the form of the Economic Partnership Agreements (EPAs).
There are two types of EPAs: Regional EPAs and interim EPAs. As the name suggests, the regional EPAs are negotiated with different regional groupings (West Africa, Central Africa, Eastern and Southern Africa, Eastern African Community, South African Development Community, Caribbean, and Pacific) while the interim EPAs, on the other hand, are negotiated with individual countries. Ghana for instance is part of the negotiations on the regional EPA with West Africa (the regional ECOWAS EPA) which started in 2003 and has also initialed an interim EPA with the EU in 2007.
The EPAs are designed on a broader basis than just a free trade agreement. They have also objectives concerning
- Development and economic growth through trade and economic reforms.
- Regional integration as a key step towards further integration into the world economy and an essential tool for stimulating investment and consolidating growth-friendly government policies.
- Reciprocity in EU trade relations, establishing a level playing field between ACP and non-ACP developing countries.
- Asymmetry in the sense that the EU market will be open to ACP goods completely and immediately. ACP markets will only be opened up very gradually to EU goods and services, because they may require protection of sensitive sectors through long transition periods or avoid liberalisation altogether in some areas.
- Differentiation, as each EPA will reflect the specific needs and interests of its target region, and their priorities for regional integration and development.
Building long-lasting political, economic, and development relationships between the EU and the regional blocs, aiming at reducing poverty, promoting sustainable development and gradually integrating ACP countries into the world economy.Back to Political & Economic Relations