External Trade

EPAs and Development

Peter ThompsonDirector: EPAs and DevelopmentDG TRADE19 May 2008

External Trade

Where do EPAs come from?

• Why? Failure of old formula to deliver development

• Where? ACPs• How? Cotonou Agreement (2000)• When? End 2007 (expiry of

Cotonou trade provisions and WTO waiver)

External Trade

Unilateral Preferences under Cotonou

• Did secure trade position

- BUT THE WORLD CHANGED AND THEY -

• Entrenched marginalisation and vulnerability• Restricted innovation and diversification• Were unable to guarantee incomes as prices fell• Offered no incentive for better governance• Discriminated among developing countries• No longer complied with global rules

External Trade

Share of imports from ACP in EU total imports, 1976-2005

0%

1%

2%

3%

4%

5%

6%

7%

8%

76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05

External Trade

ACP exports to EU, 1997-2007

ACP exports to EU in bn €

0

2

4

6

8

10

12

14

16

18

1997 2005 2007

Agriculture

Fuels

Industry

External Trade

Lack of ACP export diversification:

3 main products = 54% of exports to the EU (2005):

Diamonds11%

Fuels37%

Cocoa6%

Fish4%

Wood3%

Aluminium3%

Sugar2%

other34%

External Trade

EPAs are one of EU’s Trade Policy Tools for Development

• WTO Rules

• Aid for Trade and Cooperation

• GSP (all Developing Countries)

• GSP+ (implementation of labour rights and environment)

• EBA (all LDC)

• EPA (New Cotonou trade regime for 77 ACP + South Africa)

External Trade

What are EPAs supposed to do?

• Integrate ACPs into world economy (Globalisation)

• Improve economic attractiveness (Governance)

• Improve competitiveness• Promote diversification• Provide more, better and cheaper

goods and services

External Trade

What’s new in EPAs?

• Trade Agreement with development objectives

• Reciprocal (but not symmetric)• Unlike other FTAs linked to

Association Agreements• Assistance in text (TRA)

External Trade

EPA State of Play January 2008

• 9 LDCs and 26 non-LDCs countries have entered into EPAs and interim EPAs:

- 1 comprehensive EPA with the Caribbean region- 7 interim agreements based on WTO compatible

goods trade arrangements

• 32 LDCs beneficiating from the EBA initiative

• 10 non-LDCs under the standard GSP

External Trade

EPA EBA GSP

Caribbean Antigua & BarbudaBahamasBarbadosBelizeDominica Dominican Republic GrenadaGuyanaHaitiJamaicaSt Kitts & NevisSt LuciaSt Vincent & GrenadinesSurinamTrinidad & Tobago

Pacific Papua New GuineaFiji

East TimorKiribatiSamoaSalomon IslandsTuvaluVanuatu

Cook IslandsTongaMarshall IslandsNiueMicronesiaPalauNauru

External Trade

EPA EBA GSP

West Africa Ivory CoastGhana

BeninBurkina Faso Cape VerdeGambiaGuineaGuinea BissauLiberiaMaliMauritaniaNigerSenegalSierra LeoneTogo

Nigeria

SADC BotswanaLesothoNamibia MozambiqueSwaziland

Angola

External Trade

EPA EBA GSP

Central Africa

Cameroon Central African Rep.DR Congo (Kinshasa)ChadEquatorial Guinea São Tomé e Príncipe

GabonRepublic of Congo (Brazzaville)

Eastern / Southern Africa

EAC ESABurundi ComorosKenya MadagascarRwanda MauritiusTanzania SeychellesUganda Zimbabwe

Djibouti EritreaEthiopiaMalawiSomaliaSudanZambia

NB. Non-LDCs are shown in bold and South Africa is not included as its TDCA trade regime is unaffected by the expiry of the Cotonou agreement

External Trade

What’s in?• TRADE IN GOODS

Duty free / Quotas free access to EU Market Short transition periods for RICE and SUGAR

ACP level of liberalisation 80 % in value over 15 years

• RULES OF ORIGIN Based on the Cotonou Agreement Improvement on specific areas: TEXTILE and CLOTHING

sector, AGRICULTURE, FISHERIES

• SAFEGUARDS Exception from WTO multilateral safeguard measures Asymmetry, infant industries clauses

External Trade

What’s in?

• CUSTOMS AND TRADE FACILITATION Simplification and modernisation of customs procedures Aid for trade

• TECHNICAL BARRIERS TO TRADE Increasing protection of health, safety, consumers and

environment Improving capacity to eliminate unnecessary obstacles to

trade

• SANITARY AND PHYTOSANITARY MEASURES Commitments to the term of the WTO SPS Agreement Cooperation to enhance relevant information exchange Implementation of SPS measures

External Trade

HOW DEVELOPMENT?

• Regional Preparatory Task Forces

• EU Aid for Trade strategy (EU MSs €s)

• €s from the European Development Fund (10th EDF 2008 – 2013)

Regional programmes reinforced by 35%National indicative programmes:

competitiveness governance and public administration reforms Infrastructure

External Trade

NEXT STEPS

1. Signature/Ratification process

WTO Notification

2. Completion of full regional EPAs

All regions fully committed to conclude Timing: end 2008/mid 2009