Economic Partnership Agreement (EPA)
The ACP countries and the EU have long and preferential trade relations that date back to the Treaty of Rome (1957) and are now governed by the Cotonou Agreement. Provisions on economic and trade cooperation are an integral part of the Cotonou Agreement, particularly stressing that development strategies and economic and trade cooperation are complementary and that efforts undertaken in each area must be mutually reinforcing.
In order to enhance the contribution of trade to development, the ACP States and the EU agreed to overhaul their trade relations previously based on non-reciprocal trade preferences granted by the EU to ACP exports. These new economic integration agreements are WTO-compatible and designed to progressively remove trade barriers and to enhance trade-related cooperation. As a result, the EU is negotiating interim Economic Partnership Agreements (EPAs) with the ACP regions engaged in a regional economic integration process.
The EPAs are based on the following 4 pillars and objectives:
- EPAs are partnership agreements, entailing rights and obligations for both sides. Under these agreements, the EU is to further open up its market to ACP products and tackle trade barriers, while the ACP States must implement appropriate policies to strengthen their supply capacity and to reduce transaction costs.
- EPAs are based on regional integration initiatives existing in the ACP, further aimed at reinforcing regional integration as a means of fostering ACP states into the world economy.
- EPAs are mainly instruments for development tailored to the constraints and capacities of the ACP countries to adapt to the new trading environment. EPAs must also be integrated into the development policy of the ACP countries and into the EU's development strategies.
- EPAs are not an end in themselves, but should be compatible with WTO rules. In order to tackle the practical barriers to trade among the ACP countries and between the ACP and the EU, EPAs define, within the broad framework of WTO rules, more specific and more operational trade-related provisions.
Formal EPA negotiations with all ACP countries started in September 2002. Since then, negotiations have been launched with ACP regions, including with the Eastern and Southern Africa (ESA) group. ESA is a diverse group including Indian Ocean islands (Comoros, Madagascar, Mauritius and Seychelles), countries from the Horn of Africa (Djibouti, Ethiopia, Eritrea and Sudan) and some countries of Southern Africa (Malawi, Zambia and Zimbabwe). The original ESA group also included the Eastern African Community (EAC) states of Burundi, Kenya, Rwanda and Uganda which agreed in 2007 a separate interim EPA based around the newly formed EAC customs union.
The negotiations were launched in 2004 and continued both on trade and development issues, until the end of 2007, when Comoros, Madagascar, Mauritius, the Seychelles, Zambia and Zimbabwe initialled an interim EPA (iEPA) agreement. In August 2009, Madagascar, Mauritius, Seychelles and Zimbabwe signed this agreement, which remains open for other countries in the region to join at a later stage. The iEPA includes a WTO-compatible market access schedule, provisions on development cooperation, fisheries and other institutional provisions. It offers duty and quota free access for all imports from ESA as of 1st January 2008, with transition periods for rice and sugar. Over a period of 15 years, ESA will gradually open its market to EU imports according to each country's schedule.
The iEPA provides a framework for continued negotiations for a final EPA with all 11 ESA countries. Negotiations are still ongoing on Sanitary and Phyto-sanitary measures, Technical Barriers to Trade, trade facilitation, agriculture, rules of origin, services, investments and development cooperation with a view to include further provisions in the final EPA.