REPORT on the development impact of Economic Partnership Agreements (EPAs)
1.3.2006 - (2005/2162(INI))
Committee on Development
Rapporteur: Luisa Morgantini
MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION
on the development impact of Economic Partnership Agreements (EPAs)
The European Parliament,
- having regard to the Partnership Agreement between the African, Caribbean and Pacific Group of States (ACP) and the European Community and its Member States signed in Cotonou on 23 June 2000(the Cotonou Agreement),
- having regard to the African Union's Ministerial Declaration on EPA Negotiations made at the 3rd Ordinary Session of the AU Conference of Ministers of Trade, Cairo, 5-9 June 2005 (AU/TI/MIN/DECL. (III)),
- having regard to the Cape Town Declaration adopted by the ACP-EU Joint Parliamentary Assembly on 21 March 2002 (ACP-EU/3382/02/fin),
- having regard to the declaration of the 81st Session of the ACP Council of Ministers, Brussels, 21-22 June 2005,
- having regard to Sir John Kaputin's closing statement at the ACP Regional EPA Negotiators meeting, London, 4 October 2005,
- having regard to the European Commission Staff Working Document entitled 'The Trade and Development Aspects of EPA Negotiations', of 9 November 2005 (SEC(2005)1459),
- having regard to the Joint Report on the all-ACP-EC phase of EPA negotiations, Brussels, 2 October 2003 (ACP/00/118/03 Rev.1, ACP-EC/NG/43),
- having regard to the United Nations Millennium Declaration of 18 September 2000, which sets out the Millennium Development Goals (MDGs) as criteria established jointly by the international community for the elimination of poverty,
- having regard to the declaration of the 'UN 2005 World Summit' (Millennium + 5) in September 2005,
- having regard to the report by the UN Millennium Project Task Force headed by Professor Jeffrey Sachs entitled "Investing in Development: a practical plan to achieve the Millennium Development Goals",
- having regard to the European Commission Report of 29 October 2004 on the Millennium Development Goals 2000-2004 (SEC(2004)1379),
- having regard to the Communication from the Commission to the Council, the European Parliament and the European Economic and Social Committee of 12 April 2005: “Speeding up progress towards the Millennium Development Goals - The European Union’s contribution” (COM(2005)0132),
- having regard to the Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions of 13 July 2005 entitled “Proposal for a Joint Declaration by the Council, the European Parliament and the Commission on the European Union Development Policy – “The European Consensus” (COM(2005)0311),
- having regard to the Economic Report on Africa 2004 entitled “Unlocking Africa’s Trade Potential” by the UN Economic Commission for Africa,
- having regard to the Progress Report by the G8 Africa Personal Representatives on implementation of the Africa Action Plan, released on 1 July 2005 by the Group of Eight in London,
- having regard to the Gleneagles Communiqué, released on 8 July 2005 by the Group of Eight in Gleneagles,
- having regard to the Conclusions of the General Affairs Council of 23-24 May 2005,
- having regard to Rule 45 of its Rules of Procedure,
- having regard to the report of the Committee on Development (A6-0053/2006),
A. whereas between 1975 and 2000 the EU's trade relationship with the ACP countries was governed by the Lomé Conventions which granted ACP countries non-reciprocal and preferential access to the EU market,
B. whereas the signing of the Cotonou Agreement in 2000 ushered in a fresh era of ACP-EU relations, including provisions for a new trade relationship,
C. whereas the primary objective of the ACP-EU partnership and the Cotonou Agreement is to improve the social and economic development prospects of the ACP countries;
D. whereas the EU remains committed to the MDGs, these should only be seen as the first step in the eradication of poverty;
E. whereas the goals of the Cotonou Agreement and the EU are clear, yet considering the expected impact of the EPAs as they stand at present on fragile ACP economies and the different levels of development between the EU and ACP economies, the EPAs' role in achieving these goals has been increasingly questioned by various players, including African Ministers, some EU Member States and European and civil society in the developing world,
F. whereas market integration within the EU has been accompanied by cohesion measures in support of economically weaker countries,
G. whereas the Cotonou Agreement underlines the need to build on the regional integration initiatives of ACP States, as the creation of larger regional markets and deeper regional integration will act as an incentive for traders and investors,
H. whereas the Cotonou Agreement sets out the Parties’ agreement to conclude new WTO-compatible trading arrangements, progressively removing barriers to trade between them and enhancing co-operation in all areas relevant to trade,
I. whereas the existing trade arrangements (Annex V to the Cotonou Agreement “Trade Regime applicable during the Preparatory Period referred to in Article 37(1)”) are covered by a WTO waiver that is due to expire at the end of 2007,
J. whereas EPAs are supposed to define new trade relationships between EU Member States and ACP countries, yet liberalising trade between unequal partners as a tool for development has historically proven to be ineffective and even counterproductive,
K. whereas the regional aspect of the EPAs is essential in strengthening not only North-South trade, but also South-South trade,
L. whereas ACP Least Developed Countries (LDCs) have been granted market access to the EU under 'Everything But Arms' (EBA),
M. whereas Article 19 of the Cotonou Agreement allows the ACP-EU cooperation framework to be tailored to the individual circumstances of each ACP country,
N. whereas in the Conclusions of the November 2005 European Council , the EU Member States agreed on the need to establish and implement an improved monitoring mechanism to measure progress towards development objectives within the EPA process,
O. whereas under Article 37(6) of the Cotonou Agreement, ACP countries have the right to explore alternatives to EPAs,
P. whereas the EPA negotiations are currently in their fourth year, however it seems many hurdles remain if the negotiations are to be concluded by 31 December 2007 as provided for in the Cotonou Agreement; whereas Article XXIV of GATT requires a plan and a schedule for completion of a free-trade area "within a reasonable length of time",
1. Understands that the EPA negotiations stem from the need to make ACP-EU trade relations compatible with WTO rules but calls on the Commission to be vigilant that the issue of compatibility does not take precedence over the overall aim of development; calls on the Commission, not only to focus on compatibility with WTO rules but also, in cooperation with developing countries, to aim to improve the rules of the WTO so that they work better for development;
2. Believes that, appropriately designed, EPAs represent an opportunity to revitalise ACP – EU trading relations, promote ACP economic diversification and regional integration, and reduce poverty in the ACP countries;
3. Welcomes the Commission’s repeated protestations that development remains the primary objective and goal of any EPA forged;
4. Expresses its concern that the EPA/FTA negotiations have been launched and are moving into substantive phases in the absence of real democratic debate in most ACP countries; calls therefore for a real public debate including civil society, legislators and government institutions - and proper feedback and consultation mechanisms to reverse this situation and allow democratic participation;
5. Believes that in order to achieve these developmental objectives EPAs should notably focus on fostering good economic governance, promoting regional integration of ACP economies, and attracting and retaining higher levels of investment within ACP countries;
6. In consequence, calls on the Commission and the ACP regions to design EPAs around the principles of: asymmetry in favour of ACP regions; support for ACP regional integration; implementation of a sound and predictable framework for promoting trade and investment in ACP regions;
7. Notes, however, the lack of a concrete development-friendly result so far in the negotiations, as demonstrated by the increasing concern and dissatisfaction of ACP countries with regard to the failure to deliver the development support measures required for achieving concrete benefits from an EPA, such as binding commitments on development cooperation, concrete adjustment measures to overcome the effects of preference erosion, technology transfer and improved competitiveness;
8. Stresses that the outcome of the EPA negotiations should provide protection for ACP producers’ domestic and regional markets and allow ACP countries the necessary policy space to pursue their own development strategies;
9. Urges the Commission to act in accordance with the Cotonou objective of poverty eradication and to support the social and economic development of each regional grouping, and in particular the economically weaker countries in each grouping who might otherwise be marginalised, and to accept the necessity of greater flexibility - in terms of the timetable for negotiations regarding progressive trade opening, the length of the transition period and the degree of product coverage - if long-term sustainable development is to be the overall outcome of the EPAs; stresses that EPAs should help ACP countries to integrate in the global economy, by stimulating development through trade and taking into consideration the asymmetry of their economies;
10. Stresses that the Development Policy Statement (DPS), in particular paragraph 36, provides guidance to the EPA negotiators; in this respect urges Directorate-General Trade to adhere to the principle of asymmetry and flexibility, to let "developing countries decide and reform trade policy in line with their broader national development plans", and to realign its negotiation strategy to render it compatible with the overarching DPS principle of policy coherence for development;
11. Stresses the importance of public services for development and democracy and consequently asks the Commission to act with caution when considering the liberalisation of service sectors, and in particular to protect water, health, education, transport and energy from liberalisation;
12. Recognises the substantially different levels of economic development of the EU and the ACP and is therefore very concerned that too rapid a reciprocal trade liberalisation between the EU and the ACP could have a negative impact on vulnerable ACP economies and States, precisely at a time when the international community should be doing its utmost to support States in their drive to meet the MDGs; and accordingly calls on the Commission to ensure that special and differential treatment is given to ACP countries in the EPAs, pursuant to Article 34(4) of the Cotonou Agreement;
13. Stresses that the creation of Decent Work with full respect for workers' rights, is an essential element in combating poverty and achieving the MDGs, since it promotes the development of sustainable livelihoods and the social conditions where equality and democracy can be strengthened;
14. Emphasises that the Lomé Conventions failed to stimulate adequate development within the ACP, that improved market access alone is not enough to stimulate development and that preference erosion calls for new instruments; stresses however that EPAs will not be any more successful if they are not wholly targeted at sustainable development and therefore calls for the EPA negotiations to really create new and improved market access opportunities for export of goods and services from ACP countries;
15. Urges the Commission to pursue ambitious new initiatives to stabilise the price of commodities which are essential to developing countries, and stresses the importance of Commission initiatives to stimulate product diversification and value-added production;
16. Urges the Commission to support mechanisms for producers to be involved and participate in price determination where feasible, as provided for in the Cotonou Agreement Compendium; calls on the EU to promote fair trade as a mechanism to improve the conditions for small and marginalised producers and poor workers;
17. Urges the Commission to take into account the budgetary importance of tariff revenues in many ACP states, which will be vastly reduced by any agreement for reciprocity with the EU; such reduction may lead to immediate cuts in public spending in areas such as health and education, compromising ACP efforts to achieve the MDGs; and therefore calls on the Commission to propose and fund comprehensive fiscal reform programmes ahead of full reciprocal market opening; calls for the introduction of WTO-compatible safeguard mechanisms, allowing for temporary import restrictions if a domestic industry is damaged or threatened with damage caused by a surge in imports;
18. Recognises the potential for this loss of revenue to be replaced by other direct taxes or VAT, but stresses the regressive nature of some of these tax regimes which would disproportionately impact on the poor, as well as the technical problems related to their introduction and practical implementation;
19. Calls on the Commission to introduce a safeguard mechanism in the EPAs, in order to provide the ACP with sufficient policy space and, if necessary, temporarily suspend liberalisation in the event of balance of payments difficulties or macro-economic shocks;
20. Underlines the importance of the Commission fulfilling the commitment made by Mr Barroso to provide EUR 1 billion in aid-for-trade to developing countries and calls for further money, additional to existing EDF commitments, to be made available if necessary; regrets that inadequate provision has been made both for this and for the suggested EUR 190 million per annum promised for Sugar Protocol countries in the Council's agreement on the next Financial Perspectives;
21. Noting the importance of investment for the economic development of the ACP, urges the Commission to seek changes in the working of the EIB's investment facility, to enable the facility to promote additional and pro-development investment;
22. Considers the improvement of education and infrastructure to be necessary prerequisites to the opening of ACP markets and therefore asks the Commission to guarantee greater resources and a mechanism that allows early disbursement to ACP countries to address supply-side constraints, the external effects of CAP reform and increasingly demanding EU regulatory standards;
23. Calls on the Commission to pay particular attention to the needs of LDCs and provide adequate support for capacity-building and to address supply-side constraints in order to allow such countries to take advantage of the market access granted under 'Everything But Arms';
24. Asks that the leaders of the ACP countries use resources more effectively, in a framework of greater responsibility, good governance and democracy;
25. Calls for any market opening to be carried out within the framework of EPAs to be made contingent upon the achievement of specific development targets and the provision of adequate resources to address all of the additional costs involved;
26. Stresses the importance of achieving substantial intra-regional integration prior to embarking on a programme of inter-regional integration;
27. Insists that a timely and effective delivery of trade-related assistance should be guaranteed to ACP countries and regions to strengthen their trade capacity in the run-up to the EPA negotiations;
28. Notes that EPA negotiations have led in some cases to the creation of new regional economic groupings, encompassing countries of markedly different development levels, causing difficulties in ACP countries and contributing to overlapping regional economic communities;
29. Welcomes the role of regional integration processes, stimulated by the EPAs and identified as a priority in the Cotonou Agreement, in helping countries develop internal markets, attract investors and address supply-side constraints; however, calls on the Commission to take into consideration the need for transition periods in order to protect strategic products and industries and to introduce WTO-compatible safeguard mechanisms and find compensation for losses in tariff revenues;
30. Reminds the Commission that it might not be feasible for all regional groupings to be in a position to begin gradually implementing an asymetrically reciprocal free trade agreement with the EU by 2008 unless adequate supporting measures are taken;
31. Calls for the Commission to ensure greater coherence and cohesion between the trade-related content of EPAs, the accompanying and adjustment measures and the timely and effective delivery of support; and calls for greater collaboration between Directorates-General Development, Trade, Europe Aid - Cooperation Office and External Relations, as well as EU Member States, on how to best deliver EPA development support;
32. Urges the Commission to focus its attention on and prioritise improving production and processing capacities, and national and regional trade within the ACP, rather than implementing any reciprocal EPA with the EU;
33. Deplores the speed with which the initial all-ACP phase of the EPA negotiations was conducted and regrets the failure to reach any genuine conclusions at that stage;
34. Considers that the role of the ACP Secretariat should be strengthened in coordinating these negotiations if it provided relevant information on the state of negotiations in different ACP regions;
35. Calls on the Commission to respect the wishes of ACP leaders if they wish to reopen the all-ACP phase and resolve any remaining divergences;
36. Calls on the Commission to make available alternatives for countries not willing to sign EPAs, and especially to consider a better implementation of a GSP+ regime,
37. Recalls that the Cotonou Agreement provides that in the event that a country or region does not wish to sign up to an EPA/FTA it should not find itself worse off in terms of market access; calls on the Commission to examine all alternative possibilities including non-reciprocal arrangements as stated in Article 37(6) of the Cotonou Agreement, which provision should be respected if ACP countries accepted this;
38. Calls on the Commission to consider that EU and ACP countries together are a constituency large enough to demand for eventual reforms of WTO rules, to make them more just and suited to the needs of both developing countries and small European producers;
39. Welcomes ACP-EU discussions on rules on investment, competition and transparency in government procurement under the mandate of EPAs in order to promote trade and development; stresses, however, that new rules should not be forced upon ACP regions in the EPA negotiations;
40. Calls for greater transparency with regard to the progress and the substance of the negotiations as well as the delivery of EPA development assistance, and for greater involvement of ACP civil society players, the private sector, national-level parliaments, local governments, the European Parliament and the ACP-EU Joint Parliamentary Assembly in the negotiations;
41. Welcomes the review of the EPA negotiations due to take place in 2006, as provided for in Article 37 (4) of the Cotonou Agreement, and trusts that it will be perceived as an opportunity to engage in a comprehensive and genuine assessment of the extent to which the EPAs will promote the appropriate conditions for poverty eradication and for long-term social and economic development to flourish;
42. Recalls and supports the Cape Town Declaration, unanimously adopted by the ACP-EU Joint Parliamentary Assembly in March 2002, which called for the establishment of development benchmarks against which to assess the conduct and outcome of the ACP-EU trade negotiations; and calls for the use of such benchmarks in all reviews of the progress made; such benchmarks must include social and environmental indicators, including the creation of decent work, health, education and gender impacts;
43. Urges the Commission to proceed along these lines, implementing a new monitoring mechanism, with full involvement of parliamentarians and civil society, to ensure political scrutiny and accountability against development objectives or established benchmarks throughout the negotiating process;
44. Instructs its President to forward this resolution to the Council, the Commission, the governments of the EU Member States and of the ACP countries, the ACP-EU Council and the ACP-EU Joint Parliamentary Assembly.
Background and Legal Base
Between 1975 and 2000 the EU's trade relationship with the ACP countries was governed by the Lomé Conventions which granted ACP countries unilateral preferential access to the European market. The preferences enjoyed by ACP countries under Lomé were non-reciprocal. In 2000, the Cotonou Partnership Agreement was signed, which was “centred on the objective of reducing and eventually eradicating poverty, consistent with sustainable development and the gradual integration of ACP countries into the world economy”.
As stipulated in the Cotonou Agreement, the EU and ACP countries began negotiating Economic Partnership Agreements (EPAs) - regional free trade agreements compatible with WTO rules – in September 2002. Under the EPAs ACP countries have been asked to liberalize their markets and enter new reciprocal regional trading systems with the EU. For the purposes of the negotiations and the new trading system, Africa has been divided into four regional groups – based on, but not totally respecting, the existing regional organisations of the Economic Community of West African States (ECOWAS), the Central African Economic and Monetary Community (CEMAC), the Southern African Development Community (SADC), and Eastern and Southern Africa (ESA) – whilst the Caribbean and Pacific represent one regional group each.
One of the reasons for negotiating EPAs is that the EU’s non-reciprocal trade relationship with ACP countries granted under the Lomé Conventions and, in the interim period, under the Cotonou Agreement, is inconsistent with the WTO’s “enabling clause”. Under this clause industrial countries are permitted to give unilateral non-reciprocal preferential treatment to just two categories of countries: either, all LDCs, or, all developing countries. As the ACP regions cover countries of both groups, the original preferences granted to the ACP countries are incompatible with current WTO rules.
At the founding of the WTO in 1995 the EU and ACP countries managed to secure a waiver to cover the Lomé Conventions which was then extended in Doha 2001 to cover the intervening period of the Cotonou Agreement. However, in order to make the EU-ACP trade relationship WTO-compliant in the long-term, a solution has been sought in the EPAs. Under the proposed EPAs the trade relationship between the EU and the different ACP regional groups will be reciprocal; EPAs will therefore be governed by GATT Article XXIV rather than its “enabling clause”. Under Article XXIV countries at different levels of development can enter into a reciprocal free trade agreement providing that the liberalisation of “substantially all trade” occurs within a “reasonable length of time” – in the context of the EPAs this has come to be understood as roughly 90% of trade within 10-12 years
Although the Cotonou Agreement was signed in June 2000, it took a further two years for the EU and the ACP to adopt formal negotiating mandates/guidelines for the EPAs. In June 2002 EU Foreign Ministers adopted a mandate for the European Commission to negotiate EPAs, whilst on the ACP side, guidelines for negotiations were agreed by ACP Trade and Finance Ministers.
The first phase of the negotiations (September 2002-September 2003) whereby ACP countries negotiated as a whole, did not lead to a formal agreement as was hoped for by the ACP countries. Instead the EU and ACP adopted a joint report in September 2003 that simply listed convergences and divergences. Although this all-ACP-EU phase was never closed, in 2003 the regional negotiations were initiated between the EU and the ACP countries beginning with Central Africa and West Africa, and in 2004 with Eastern and Southern Africa, the Caribbean and lastly the Southern Africa Development Community.
Since the start of the regional negotiations, most have followed a broadly similar trajectory by establishing a Joint Roadmap between the EU and individual ACP region. The Roadmaps present the objectives, principles, structures and sequencing of negotiations for each EPA. In addition to the Joint Roadmaps, regions have established (or are currently in the process of establishing) Regional Preparatory Taskforces. The outcome of the current negotiation process - started under the legal framework of the Cotonou Agreement which is centred on the objective of poverty reduction - will be WTO-compatible regional free trade agreements aimed predominantly at progressive trade liberalisation; this hardly seems to respect the development objectives of the Cotonou Agreement itself.
Main Controversies and Concerns
The main objective of the Cotonou Agreement – and by extension the EPAs – is the reduction and eradication of poverty and the achievement of sustainable development. After almost a year of regional negotiations, major concerns about the impact of EPAs on fragile ACP economies and indeed the effectiveness of trade liberalisation as a tool for development, have been raised by both NGOs and many ACP governments. In order to ensure that poverty reduction is the final outcome of the EPAs, a number of concerns need to be addressed within the following two years of negotiations.
Most controversial in terms of development is the requirement for a reciprocal trade relationship. It is clear that implementing a reciprocal free trade agreement will be extremely difficult for the ACP countries whose level of development is, firstly, very much behind the EU's and, secondly, varies a great deal within regions themselves. The scope and terms of the trade preferences granted under the Lomé conventions were decided mainly by the EU and did not halt the decline in ACP market share. However this does not mean that reciprocal free trade represents a better solution for strengthening ACP economies. Reciprocity represents a major shift in the EU's approach to development and trade policies with ACP partners; considering the negative impact that premature liberalisation may have on partner countries - as is now recognized by most development practitioners - it needs to be carefully sequenced. The European Commission and the ACP countries therefore need to work in partnership to press for a revision of GATT Article XXIV, to allow for special and differential treatment for developing countries. The EU needs to use its powerful position in the WTO to push for greater flexibility.
In addition the European Commission needs to address ACP concerns over the rigidity of the timescale currently in place. The Commission is trying to close EPA negotiations by 2008, in order to avoid the negotiation of further waivers with other WTO members that will impact on ACP market access to the EU. Nevertheless, in keeping with the Cotonou Agreement, development and poverty reduction must remain the priorities - sticking to an inflexible timescale will have a negative impact on poverty alleviation. Moreover, WTO rules are certainly open to interpretation when addressing the implementation period. Article XXIV: 5 stipulates only that an interim agreement for a Regional Trade Agreement (RTA) should include a plan and a schedule for the formation of the RTA within a reasonable length of time. The Understanding on Article XXIV defines a "reasonable time" as ten years and specifies that this should be exceeded "only in exceptional cases"; there is certainly scope to present the EU-ACP EPAs as exceptional cases as the level of development between the parties is so variable. An implementation of just ten years could cause major economic upset in some countries.
A concern that has been expressed repeatedly by ACP country ministers and regional level negotiators is the need for greater resources. The six ACP regions suffer greatly from supply-side constraints and institutional shortcomings that need to be addressed. Resources provided for EU enlargement have been immense in order to ensure that the new member states can cope with trade liberalisation with the EU. The EU should consider providing extra EDF resources to ACP countries, firstly, to help them cope with the major institutional reforms that have been demanded of them under EPAs, and secondly to assess their development impact before the negotiations are concluded.
Partnership is one of the main principles of the Cotonou Agreement and the EPAs, yet the Commission has been reluctant to engage in debate on many of the issues raised by
ACP partners, like those of the African trade ministers Meeting in Cairo last June. In particular, ACP countries have been keen to highlight the importance of addressing the supply-side constraints currently endured by many ACP countries which might prevent them from truly benefiting from a liberalised trade regime with the EU. At present, not enough funding is being earmarked to alleviate these constraints. Greater financing is also needed to help ACP economies meet the increasingly demanding EU technical, sanitary and other regulatory standards. In addition means need to be foreseen to alleviate the social impact of the economic reforms that the EPAs will bring about.
Free trade with the EU would also lead to significant revenue losses for ACP countries. The income from import duties and levies constitutes an important element of the national budgets in ACP countries. In case of extensive trade liberalisation this revenue has to be replaced by other forms of income such as direct taxes or VAT. Some of these forms might be regressive and inconsistent with the poverty reduction objective of the Cotonou Agreement. Furthermore, many ACP countries do not have the capacity in place to introduce or extend their tax systems sufficiently. The abolishment of import tariffs may lead to cheaper supply goods for domestic production (machines for industrial production etc.); however, the EPA negotiations cannot be concluded without a solution to compensate for the loss of ACP government revenue.
It is clear that all the costs mentioned above will require additional funding above and beyond what is currently being envisaged in the financial perspectives or the 10th EDF. In this respect it would be useful to build triggers into the EPA negotiations, to ensure that a phase can start only when resources are available or when a certain result has been attained.
Developing countries have consistently rejected at WTO ministerial meetings the idea of drawing the so-called Singapore Issues – in particular investment, government procurement and competition policy - into the WTO's mandate. The EU should respect the demands of ACP partners and maintain the commitments undertaken at the WTO meeting in Doha, avoiding discussion on the Singapore Issues in EPAs negotiations. The inclusion of the Singapore Issues in any EPA agreement would probably serve to strengthen EU companies' rights at the expense of ACP national-level development plans.
Regionalism is a core objective of both ACP countries and the EU and it is central to EPA negotiations. EPAs should support and be based on existing regional integration initiatives and objectives. However EPA negotiations have led in some cases to the creation of new Regional Economic Communities, encompassing countries of markedly different development levels. This has caused major difficulties in ACP countries, undermining the protection of strategic industries because of the urgency to align their tariffs before the end of negotiations in 2007. The regional integration efforts of the ACP countries should be given enough completion time so that they can be consolidated before being exposed to EU competition. In practice this means that such transition periods for intra-regional development would go well beyond 2008, the proposed start of the implementation of the EPAs.
Following the indication of UNCTAD, since 1971 the EU has implemented the GSP scheme in its trade relations with developing countries. The new EU GSP+ system, if properly implemented, could put environmental and social standards as a top priority in trade agreements with ACP and other developing countries respecting certain international standards. Moreover, ACP LDCs currently enjoy better market access to the EU under the 'Everything but Arms' (EBA) initiative than that which is currently on offer under the EPAs.
There is therefore not much incentive for ACP LDCs to engage in the EPA process. The market access they enjoy at present is non-reciprocal and would remain so if they choose not to involve themselves in an EPA. Indeed countries enjoying preferences under GSP may be better off under this regime than under reciprocal EPAs agreements. The European Commission must address this issue if the EPAs are to go forward and achieve the developmental goals that supposedly underlie them.
The review of the EPA negotiations foreseen in 2006 by art.37.4 of the Cotonou Agreement should represent a major assessment of the extent to which the negotiations are indeed contributing to these goals. In order to ensure the assessment is comprehensive and open to all stakeholders, greater transparency with regards to the progress and the substance of the negotiations is needed. Negotiators need to recall the Cape Town Declaration - unanimously adopted by the ACP-EU JPA in March 2002 - which called for the establishment of development benchmarks against which to assess the conduct and outcome of the ACP-EU trade negotiations. Moreover, regional negotiation should aim not only to ensure integration into the world economy, but also to ensure trade development accompanied by poverty reduction, and respect for workers' rights and relevant social rights. Strong involvement of civil society, such as the consultation of ACP civil society through local trade-scrutinising task forces, is consequently needed, as well as the continued involvement of national-level Parliaments. In this respect a monitoring mechanism should be implemented, with full involvement of parliamentarians and civil society, to ensure political scrutiny and accountability against development objectives or established benchmarks throughout the negotiating process.
Under the current timetable, EPA negotiations are due to be concluded by December 2007 at the latest with an implementation phase of between 10 and 12 years beginning in January 2008. There are many more hurdles to overcome in the individual EPA negotiations before this date, and it is imperative that all negotiators keep the Cotonou Agreement's primary objective of poverty eradication at the forefront of any agreements made. To this end it would be necessary to rethink and build a different world trade and economic system where more attention is given to the protection of African countries' agriculture. Self-sufficiency and the guarantee of a decent income for small farmers should be the priorities. Local production should be increased to ensure food security and social services for the whole population. In order to retain the added value in ACP economies a different system, where production is prioritised for the domestic over the export market and where producers' income is guaranteed, needs to be forged.
-  Article 1 (2) of the Cotonou Agreement.
The development impact of Economic Partnership Agreements (EPAs)
Basis in Rules of Procedure
Date authorisation announced in
Committee(s) asked for opinion(s)
Not delivering opinion(s)
Date of decision
Date announced in plenary
Discussed in committee
Result of final vote
Members present for the final vote
Danutė Budreikaitė, Marie-Arlette Carlotti, Thierry Cornillet, Alexandra Dobolyi, Michael Gahler, Glenys Kinnock, Ģirts Valdis Kristovskis, Maria Martens, Miguel Angel Martínez Martínez, Gay Mitchell, Luisa Morgantini, Józef Pinior, Pierre Schapira, Frithjof Schmidt, Jürgen Schröder, Feleknas Uca
Substitute(s) present for the final vote
John Bowis, Milan Gaľa, Fiona Hall, Linda McAvan, Manolis Mavrommatis, Karin Scheele, Anne Van Lancker, Anders Wijkman, Zbigniew Zaleski, Gabriele Zimmer
Substitute(s) under Rule 178(2) present for the final vote
Comments (available in one language only)