April 2007 - The Cotonou Agreement, signed in 2000, calls for Economic Partnership Agreement (EPA) negotiations to be completed by December 31, 2007. This deadline marks the end of the WTO dispensation that allows preferential trade agreements to be maintained on an interim basis. The EPA are designed to be free trade agreements, in conformity with WTO rules, between the European Union and each of the six regions comprising the ACP (African, Caribbean and Pacific nations). Talks began in 2002, but sticking points have slowed progress on a deal – especially with the four African regions – to the point where the deadline may or may not be upheld. The date itself is one of the subjects of contention, with African nations estimating that another two years will be necessary to reach agreement on such matters as the calendar for opening up domestic markets to trade, the list of sensitive products to be sheltered from free trade, or the amount of aid from the EU that is to be associated with the agreements.
A trade agreement with the four African ACP regions is clearly the most difficult one to reach. Negotiations with the Caribbean and Pacific regions are in their final stages, helped along by the EU offer on April 4 to open its markets unconditionally to all ACP products except rice and sugar (and except products from South Africa) as of January 1, 2008, if overall agreement can be reached by then (see the EU press release). In addition, the EU is offering to grant EBA status (Everything but Arms) to all signatory countries and not just the Least Developed Nations, which previously qualified for this preferable status. This offer by the EU does not however change the Union’s position on the issues that remain to be worked out with African regions, namely assymetry of market liberalization, the number of sensitive products to be shielded, and a long period of transition.
African regions are not yet happy with several aspects of the European position especially on the question of sheltering their own domestic markets ; the protection of 20% of African products seems to them insufficient (and in any case even this level has yet to be formally negotiated), as does the proposed period of transition. The EU is offering a 12-year liberalization plan while African regions feel they need more time than that but are not in a position of force, since they have not yet clearly defined a counter-proposition. The European Union meanwhile does yield considerable leverage as embodied in their expression of intent to apply WTO norms, including the Generalized System of Preferences (GSP), as of January 1, 2008 in the event of an non-accord. Under the GSP regime, the average tariff is 20% higher than those currently in application and, for example, would cost more than a billion euros to West African producers.
The next interministerial meetings are planned for July and will be devoted to establishing calendars for market liberalization and lists of sensitive products, both of which are crucial issues in the EPA talks. The future of agricultural sectors of ACP countries hinges on the decisions to be made in these meetings concerning products to be protected and timelines for EPA application. The region of West Africa launched the process of identifying and selecting sensitive products on the occasion of a technical seminar in February of this year, including an accelerated timeline for generating a final list in time to be presented at the July meetings.
The outcome of EPA negotiations overall likely depends on the extent of the EU’s control of certain pressure points and in particular the firmness of its resolve to apply GSP norms beginning immediately on January 1, 2008. Criticism of this position, however, arises from the observation that the US-enacted African Growth and Opportunity Act (AGOA – 2002) has never been challenged in international jurisdictions despite the fact it contains more strongly preferential discrimination than does the Cotonou Agreement. AGOA stipulations include duty-free access to US markets for sub-saharan products concerning some 4500 tariff lines, with no sensitive products designated by the US. Beneficiaries of this agreement are countries selected by the American president as having met such eligibility criteria as progress towards an open economy and free trade, poverty reduction, and market openness towards American products.