1 Economic Partnership Agreements: A new approach to ACP-EU economic and trade cooperation Claude Maerten, European Commission Head of Unit TRADE C 2 TRALAC’s Annual International Trade Law Conference 11 November 2004

2BACKGROUND

3 EU Trade relations with ACP countries still the same since Lomé I (1975) A need for change Agreed in ACP-EU Cotonou Agreement WHY ?

4 EU Trade relations with ACP countries Since Lomé I (1975) Non reciprocal trade preferences All industrial goods enter the EU duty free 80% of agricultural products enter the EU duty free, and the remaining 20% benefit from preferences DID IT WORK ?

5 EU Trade relations with ACP countries Since Lomé I (1975) NO, few successful stories Fisheries, Agriculture, Commodities; Mauritius, Kenya, Cameroon, Ivory Coast, Zimbabwe; Same trade relationship during the last 30 years in a new world economic environment

6 EU Trade relations with ACP countries Since Lomé I (1975) Trade preferences had been eroded considerably (Kennedy Round, Tokyo round, Uruguay Round), and more to come with DDA In the 80s, margin of preference around 10% Today, lower than 4% in comparison with MFN, 2% in comparison with GS Not enough in the past Not a solution for the future

7 Quick look at the data

8 Lack of ACP export diversification 5 PRODUCTS = 60 % of total Exports (petroleum, diamonds, cocoa, fish, and wood products) AFRICAN COUNTRIES REPRESENT 60 % OF TOTAL ACP EXPORT Lome trade regime as a tool to promote exports failed

9 Lessons learnt n n Unilateral Preferences are Not Enough n n Trade relationship should go beyond market access n n Promote a synergy between aid and trade n n Mainstream trade in development support n n Need for domestic reforms n n Develop supply capacities n n WTO compatibility

10 RATIONALE FOR EPAS

11 Towards a new approach The Cornerstones of EPAs   EU policies   The Cotonou Agreement   Development dimension   Regional integration   WTO compatibility

12 EU Policies   Trade Policy   Contribute to growth, employment and competitiveness in Europe   Multilateral route the top priority; Complete the Doha round   Deepen bilateral and regional trade relations; regional integration   Development policy   The 6 priorities   CAP, Fisheries policy   EPA as a link for EU-ACP partnership

13 The Cotonou Agreement   Objectives   Sustainable development   Poverty eradication   Integration into the global economy   EPA is the trade chapter

14 Development dimension   Monterey consensus   sustainable, stable, transparent domestic policies in the South;   Market Access granted by developed countries   Mainstream trade policies in development strategies   PRSP, Integrated Framework, EU development policy; CSP; NIP and RIP   Trade and Aid   Coherence; Complementarity; Coordination   (PRSP, Integrated Framework, EU development policy; CSP; NIP and RIP)   Supply capacities; private sector development, …   Funding   Market access and Rules   Complementarity, parallelism between DDA, EPA

15 Regional integration   Support ACP political choices (coherence, AU)   First step towards gradual integration into world economy   Enlarging markets for attracting investment   Combined South-South-North cooperation (lock-in effects)

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18 WTO Compatibility   Lome/Cotonou waiver   Price to pay against ACP interests   Enabling clause   Link between the level of RI and the level of our ambitions   Article XXIV GATT   Existing flexibility enough   The debate   Article V GATS   Meaning of WTO +

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21 WTO Compatibility Possible scenarios for reciprocity   West Africa 81%   Central Africa 79%   East and Southern Africa 80%   Southern Africa76%   Caribbean 83%   Pacific67%

22 Conclusion n n ACP development is the objective; Trade is a tool n n Regional integration as a political, economic and development challenge n n EPAs are an opportunity