REPA Booklet - Stop Epa

Is there another way of interpreting these provisions?
There is no specific reference to a free trade agreement, a regional trade agreement or Article XXIV of the
GATT. Nor is there mention of removing all barriers to trade. It is possible to interpret the requirements to mean
they can negotiate any trade arrangements that do not breach WTO rules. That might allow a commodity
specific trade arrangement that reduces barriers in relation to a particular product. However, the Commission
would have to be willing to accept such an interpretation and defend it if it was challenged in the WTO.
“In 1988 the EU had
contracted six
studies on the
economic impact of
its proposed REPAs,
and they concluded
that the costs for
ACP would by far
outweigh the
benefits.”
(Yash Tandon,
SEATINI, 1999)
How might this affect the Pacific Islands?
Most Pacific Islands don’t import much from Europe. The total sum for exports to the Pacific Islands is about 200
million Euros a year. That could increase if tariffs were removed, but not enough for the EU to be particularly
bothered about access to Pacific Island markets. That raises the possibility that the European Commission might
consider negotiating something less than a free trade agreement and just focus on particular commodities that
are important to the Pacific region or individual countries. Because most of the Islands are not WTO Members
there is a sound basis for arguing that they should not have to comply with Article XXIV of the GATT. However,
that seems optimistic; the Commission will not want to create precedents that other ACP States might use.
Do ACP governments have any choice about participating in the Economic Partnership Agreements?
Yes, there are three options.
1. Least Development Countries: The Cotonou Agreement promised that Least Developed Countries
would have duty free access into the European Union for ‘essentially all products’ by 2005. This would build on
trade preferences in Lomé IV with simpler and revised rules of origin. This echoes the ‘Everything But Arms’
arrangement that the Commission has offered all to Least Developed Countries and allows the world’s 50
poorest countries duty free access for ‘almost all’ products, except arms and ammunition.
However, it appears that the Commission expects the Least Developed Countries to reciprocate with access
for European services and investment in return for retaining free access to the European Union for their goods.
If a Least Developed Country does decide to join the regional EPA negotiations, it would have to accept a
degree of reciprocity. The Commission has conceded that this would create some hardship, and says it would
recognise this, but believes that the ‘benefits of taking part in an area of enhanced economic cooperation with
the European Union should outweigh any interim costs of liberalisation’.
2. The General System of Preferences (GSP) is the European Union’s system trade preferences for 178
developing countries. It dates back to 1971 and is periodically updated. The latest system was announced in
February 2005 and runs until December 2008. This has a general scheme that provides tariff cuts to around
7200 products.
There is also a GSP Plus scheme that provides duty free access for especially vulnerable countries that have
special development needs. Countries need to demonstrate that their economies are poorly diversified, and
therefore dependent and vulnerable, and their GSP-covered imports must represent less than 1% of total EU
imports under General System of Preferences. To be eligible these countries must also have ratified and
effectively applied 27 key international conventions on sustainable development and good governance. Almost
all the Pacific Islands would meet the vulnerability criteria; whether they would also meet the ‘good governance’
tests is highly questionable.
Any ACP States that choose not to take part in an Economic Partnership Agreement would be eligible for the
General System of Preferences, meaning they would be treated the same as, and have to compete with, all
other developing countries. There would be no negotiations - they have to accept whatever the European
Union is offering and run the risk that this is altered or withdrawn unilaterally in the future.
3. ACP States that are not Least Development Countries can decide, after consultations with the
Commission, that they are not in a position to enter into an Economic Partnership Agreement and ask the
Commission to examine an alternative framework for trade that is equivalent to what the country had under
Lomé. This leaves the power in the hands of the Commission. Originally, this option was only available until
2004, but it has been extended to 2006 when the review of the negotiations under Cotonou is scheduled.
However, it is hard to think of any WTO compatible arrangement beyond the General System of Preferences,
and the Commission is unwilling to propose any alternatives because it believes the free trade agreements are
the best option.
A People’s Guide To The Pacific’s Economic Partnership Agreement 27