Economic Partnership Agreement (EPA)
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.
What does the EPA offer?
- EPAs enhance trade – beyond free market access, EPAs come with less strict rules of origin, making it easier for LDCs to export products with inputs from other countries (third-country inputs), especially in key export sectors – agriculture, fisheries and textiles and clothing;
- EPAs tackle co-operation on trade-related issues – EPAs provide an opportunity to address complex issues affecting trade, such as copyright and the environment;
- EPAs boost regional markets and rules – by tagging on to ACP regional integration initiatives, EPAs help promote regional solutions, seen as good for development;
- EPAs provide for a broader approach to trade barriers – the EPA approach recognises that tariffs and quotas aren’t the only barriers to trade, and provides a way of addressing wider issues, e.g. poor infrastructure, inefficient customs and border controls, or inadequate standards;
- EPAs bring tailor-made approaches to regional needs – EPAs are worked out in regional negotiations to make sure they take account of regional needs and each country's sensitivities and conditions;
- EPAs safeguard local economies – though ACP countries that sign EPAs must gradually open up to 80% of their markets to EU imports, safeguards ensure that EU products don't compete against locally produced products. So, trade disruption is avoided while local industries and consumers benefit from cheaper inputs and consumer goods;
- EPAs respect national sovereignty – instead of imposing development strategies, EPAs ask countries to determine their own development strategies and the pace and sequence of reform decisions;
- EPAs are stable partnerships between EU and ACP countries – EPAs establish viable contracts between equal partners which can't be altered without mutual agreement. This is an important difference compared to EBA (which is granted, and not negotiated, by the EU), favouring long-term planning and investment for development.
EPA with ESA region
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 interim EPA (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.
In 2009 four ESA countries, namely Mauritius, Seychelles, Zimbabwe and Madagascar, signed the interim Economic Partnership Agreement (iEPA). The Agreement is provisionally applied since 14th May 2012. The European Parliament gave its consent on 17th January 2013. The inaugural EPA Committee under the Interim EPA was held in October 2012 in Brussels and the second meeting took place in May 2013 in Mauritius. The Customs Cooperation Committee and the Joint Development Committee were also held in the margins of the EPA Committee.
Technical talks in early May 2013 allowed for further progress. ESA is committed to continue to negotiate with a view to conclude a comprehensive regional EPA. Negotiations focus among others on institutional provisions, dispute settlement, agriculture and rules of origin.