Concerns about EPAs?

Loss of Manufacturing and Jobs
The EU has demanded that EPAs involve the elimination of tariffs on at least 80% of trade, ACP countries have very little scope to support existing or future manufacturing industries. Through seeking to defend their agriculture from subsidised imports, countries are left with almost no flexibility to support the value-addition that is such an essential part of moving up the development ladder.

Agriculture and food security under threat
While most ACP countries have excluded many agricultural products from liberalisation, the devil is in the detail. Certain agreement clauses (that freeze tariffs at current levels) and inadequate ‘safeguards’ could still make it difficult for ACP countries to defend their agricultural sectors from subsidised EU imports, which could in turn undermine food security and livelihoods. As highlighted by the UN Special Rapporteur on the Right to Food, this is particularly worrying given that the EU recently re-introduced export subsidies in agriculture.

Fiscal revenue loss
Far-reaching elimination of tariffs will place a serious hole in ACP countries’ budgets, as many ACP states rely upon trade taxes for up to 40% of their government revenue. For example, by 2012 Côte d’Ivoire is likely to lose an estimated $83 million, equivalent to its current health spending for half a million people, as a result of liberalising tariffs under EPAs. This is in a context where the economic downturn is already placing great strain on government budgets. Undermining regional integration EPAs were intended to be regional agreements, which would support the integration of small and fragmented ACP markets into stronger regional economies. Yet studies predict that granting free market access for the EU would undermine the scope for the ACP to first build up their own regional production chains.

Fiscal revenue loss
Far-reaching elimination of tariffs will place a serious hole in ACP countries’ budgets, as many ACP states rely upon trade taxes for up to 40% of their government revenue. For example, by 2012 Côte d’Ivoire is likely to lose an estimated $83 million, equivalent to its current health spending for half a million people, as a result of liberalising tariffs under EPAs. This is in a context where the economic downturn is already placing great strain on government budgets. Undermining regional integration EPAs were intended to be regional agreements, which would support the integration of small and fragmented ACP markets into stronger regional economies. Yet studies predict that granting free market access for the EU would undermine the scope for the ACP to first build up their own regional production chains.

Services, Intellectual Property Rights (IPR) and so-called ‘Singapore Issues’ (investment, government procurement, competition policy and trade facilitation)

The EU wants ACP countries to make a series of commitments enabling European investors to operate more easily in their markets. However, rules on intellectual property could undermine access to medicines and technology in these countries. In addition, services liberalisation and inclusion of Singapore Issues could restrict the governments’ scope to regulate investors in the public interest or to give domestic small and medium enterprises a boost – just as European governments are supporting their SMEs in times of global economic downturn.

Negotiation process
There has been much concern expressed about the actual process of the negotiation of these agreements. ACP leaders and negotiators have indicated that at various stages they have felt under severe pressure to sign up to agreements that did not reflect their concerns. Moreover, the negotiating process has not taken account of asymmetries of negotiating capacity, and studies show that different ACP
countries received deals that reflect their negotiating capacity, rather than taking account of their level of development.

More info on EPA

Economic Partnership Agreements (EPAs) are free trade deals being negotiated between the European Union (EU) and 76 developing countries – mostly former colonies in Africa, the Caribbean and the Pacific (the ACP). The agreements set the rules of trade between Europe and these countries for decades to come, affecting the lives of millions of people. Ostensibly intended to be ‘development
agreements’ that would promote regional integration, there is huge controversy about whether EPAs will deliver or undermine these objectives.

"EPA does not give sufficient opportunities for businesses in LDCs to develop to levels where they can compete favourably with their counterparts in the EU and that is critical to the development of a country like Ghana."
Nobel Prize winner, economist Joseph Stiglitz, Accra, 8 July 2008

TO: Hon. Prime Minister,
CC: Hon. Deputy Prime Minister and Minister of Foreign Affairs,
CC: Permanent Secretary, Ministry of Foreign Affairs,
CC: Mr Louise Grech,
CC: Dr Simon Busuttil,
CC: Prof. Edward Scicluna,
CC: Mr David Casa,
CC: Dr John Attard Montalto,

The 27th September 2009 marks the 7th anniversary of the launch of EPA talks. Almost two years beyond the 2007 deadline, the negotiations that will define the future of EU-ACP trade relations are far from over. Only one region has concluded a full regional trade deal and more than half of the ACP countries have not agreed to any form of EPA, such is their degree of concern with these agreements.

Although EPAs were supposed to promote ACP countries’ development and regional integration, the EU’s approach to the negotiations has undermined these objectives. The interim arrangements imposed upon the ACP at the end of 2007 have not only failed to provide a basis for development friendly agreements, but have also set back regional integration.

While it promised to take a more flexible approach going forward, the Commission has instead continued to pressure regions into liberalising further and faster than is wanted or is appropriate to these economies. It has insisted that countries sign Interim EPAs, without first removing ‘contentious issues’, despite regular requests from ACP countries; and it has also persisted in pressuring countries to take on new obligations that go beyond WTO compatibility requirements.

The European approach to EPAs remains unacceptable and must be turned around.

We call upon you:

• not undermine the policy space of ACP to implement own development strategies and put in place measures to deal with the effects of the global economic, food and climate crises;
• fully respect ACP positions on services, intellectual property and Singapore Issues – and refrain from pressuring countries into agreement in these areas;
• to respond positively to proposals for flexible market access arrangements and any requests from ACP countries for alternative solutions;
• respond positively to ACP requests for renegotiation of contentious issues in interim EPAs. Revisions of Interim EPAs must not be conditional upon the agreement with new issues or a so-called ‘full’ EPAs, nor should ACP countries be pushed to sign interim EPA without resolving the contentious issues.

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