20 December 2007 was the day earmarked for the European Council to approve an EC (European Commission) regulation to reserve duty free quota free access to European markets from 2008 for those ACP (African, Caribbean and Pacific) countries who initialled the IEPA (interim Economic Partnership Agreement) framework.
This approval might be a relief for the export entities in those ACP countries who initialled the IEPAs to avoid disruptions in their trade with the EU (European Union). However, the same export entities should fully comprehend the implications of such a step for their own economies in terms of what lies ahead in the forthcoming EPA negotiations with the EC in 2008.
The IEPAs are only an interim measure to satisfy the WTO (World Trade Organisation) rules for the continuation of ACP exports to the EU. In practice, it is a postponement of the agony still awaiting those ACP countries in 2008.
The non-LDC (Least Developed Countries) ACP countries that did not initial the IEPAs – except South Africa, who has a bilateral agreement with the EU – will be penalized by downgrading the Cotonou trade chapter to the EU’s GSP (Generalized System of Preferences).
Under the GSP, these countries will be subjected to punitive tariffs because of the EC’s inability “to provide these countries with a new framework of trade which is equivalent to their existing situation and in conformity with WTO rules.” (Cotonou Art 37.6). The Cotonou Agreement (Art 37.7) specifically states that no ACP country shall be worse off in 2008 than before – the so-called acquis principle.
During the past two weeks, the European Parliament and some EU countries called on the EC to honour the acquis principle, but alas the EC got their way by ignoring the most important Cotonou provisions – non-LDC ACP countries were put under pressure to initial the IEPAs in exchange for duty free and quota free access to the EU markets.
The EC Trade Commissioner, Mr Peter Mandelson, in a statement following the GAERC (General Affairs and External Relations Council) meeting on 10 December 2007 in Brussels, admitted that even the IEPAs could be challenged in the WTO. “Nothing is guaranteed, but we will fight for this in the WTO. We may be attacked by other developing countries, but we think we can defend it and win.” – a very vague promise to build a country’s future trade relations with the EU. Will history repeat itself? Cotonou Art 39.2 and Art 39.3 state that the EU will cooperate with the ACP in the WTO “in identifying and furthering their common interests” and that “particular attention shall be paid to improve access to the Community and other markets for products and services originating in the ACP countries”, while agreeing on “the importance of flexibility in WTO rules to take account of the ACP’s level of development as well of the difficulties faced in meeting their obligations.”
Taking into account the pressure on the non-LDC ACP countries to initial the IEPAs to avoid export trade disruptions and the fate of the GSP awaiting those who did not initial the IEPAs, is the above just another oversight from the side of the EC?
When the ACP countries in 2004 requested a reform of GATT Art. XXIV in the WTO’s Doha Round, the EU was more pre-occupied with its battle against the United States regarding the elimination of subsidies to support the ACP request. A reform of GATT Art. XXIV could have had a fundamental influence in easing WTO requirements, but again, the EU was safe under Cotonou Art 37.7, which states that the EPA negotiations will be conducted under “WTO rules then prevailing.”
Even though it could be understandable why some ACP countries yielded to the pressure from the EC to initial IEPAs, the above paints a bleak picture of what awaits those countries in the 2008 (continued) EPA negotiations – especially given the EC’s negotiating tactics to date.
During the EU-Africa Summit in Lisbon (08 – 09 December 2007) the President of the EC, Mr Josǟ