EU-ACP Economic Partnership Agreements (EPAs): A Case for African States

 Executive Summary

(Full Report available here)

 

The European Union (EU) trades with the African, Caribbean and Pacific (ACP) states in three ways; the first is under the Everything but Arms (EBA) scheme which governs trade relations between the EU and ACP states that are least developed. Under this scheme, all products except arms from Least Developed Countries (LDCs) are granted duty free and quota free access to EU markets. The second way was through which EU trades with ACP states is through the Economic Partnership Agreements (EPAs) which would still allow for duty and quota free access of ACP products to EU markets while providing for the gradual opening up of ACP markets over an agreed period of time so as to ensure reciprocity. The third way is through the General System of Preferences (GSP) and GSP+ in accordance with the enabling clause and part IV of the GATT that provides for non-reciprocal preferential treatment to developing countries by developed countries in a non-discriminatory manner.

 

Of great focus to this paper are the EPAs, their status, their legal implication, their compatibility with the WTO rules and the possibility of legally exiting the EPAs. This paper also considers the possible cause of action in the event African states choose to exit the EPAs, the trade pillar under the Cotonou Partnership Agreement as well as the impact of BREXIT on the ACP-EU trade relations.

 

Currently, there are 9 EPAs between EU and ACP member states. Of the nine, seven are from African states. Out of the seven, two are stepping stone EPAs between Cote d’Ivore and the EU as well as Ghana and the EU. The remaining EPAs stem from the various regional blocs; the ECOWAS, EAC, SADC, ESA and the Central Africa region. Of the 5 EPAs from the regional blocs, only the SADC, ESA and Central Africa are under provisional application. The ECOWAS and EAC EPAs are not under application due to the failure of certain EAC and ECOWAS member states to sign and ratify the EPAs. The current status of the EPAs has been further canvassed in the substantive part of this paper.

 

There are various impacts of the EPAs such as trade liberalisation, impediment of the sovereignty of the ACP member states as a result of the unequal bargaining power that exists between the EU and the ACP member states. There is also the competitive disadvantage occasioned on products from ACP states as a result of the subsidies given by the EU to products from the EU.

 

On the conformity of the EPAs with WTO rules, there are certain elements of the EPAs that fall short of the same. The specific provision is article 24 of the GATT despite the fact that they have been notified under the same. This is because it could be argued that they have failed to meet the qualitative threshold of the substantially all trade requirement under article 24 as well as exceeding the time frame for liberalisation envisioned under the said article. This shall also be substantiated in the substantive section of this research.

 

When it comes to the possibility of exiting the EPAs, there are various options provided for under the Vienna Convention on the Law of Treaties (VCLT). There are those that apply exclusively for treaties under provisional application and those that apply for treaties that have already entered into force. Of relevance to ACP states are the express exit clauses provided under the EPAs. In the event African states exit the EPAs, the most feasible alternative to maintain trade relations is through seeking a waiver under the GATT which allows WTO members to waive obligations imposed on a WTO Member by WTO multilateral agreements, including GATT itself.

 

As regards the trade pillar, the same is provided for from article 34-52 of the Cotonou Partnership Agreement (CPA) and exclusively deals with the trade relations between the EU and ACP states. It is to be implemented through the EPAs. The ACP states can base the argument on exclusion of the same from the 2020 negotiation rounds on the grounds that it provides for the blanket opening of ACP markets albeit gradually with no limitation for sensitive products. Further, they can also argue that the trade pillar has already been implemented through the EPAs hence there is no need to include it. However, an alternative to the total exclusion of the trade pillar would be renegotiation the provisions of article 36(1) of the CPA to provide protection for sensitive industries in the ACP states.

 

When it comes to Brexit, The UK formulating its own trade policy following Brexit is likely to have implications for the existing Economic Partnership Agreements (EPAs) between the European Union (EU) and some African, Caribbean and Pacific (ACP) countries. In the absence of equivalent market access, these countries may face higher most-favoured nation (MFN) tariffs in the UK market or revert back to GSP scheme regardless of the fact that the United Kingdom remains a major trade, investment and development cooperation partner for many sub-Saharan African countries.

 

Read the full report here.

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