Time is the enemy as ACP deadline looms

Ministers from some of the 76 African, Caribbean and Pacific (ACP) states gather in Brussels today (24 May) with their EU counterparts to discuss the final stretch of negotiations for Economic Partnership Agreements (EPAs).

The two-day meeting will review negotiations to date and discuss how the talks can be concluded.

Both sides have held very different views of what the EPAs should mean ever since negotiations began back in 2002 following a World Trade Organization (WTO) ruling striking down the preferential treatment given to ACP produce.

The EU says that the EPAs are a development tool, which will help poorer states build their economies by opening up to trade and investment, forging regional markets and reforming how they do business.

But many of the ACP states, backed by non-governmental organisations, say that the EPAs will see their import tariffs reduced and eventually scrapped, thereby depriving them of important revenues for vital services. The EPAs will also force them to open their markets to international competition, undermining local industry and driving the price of their goods down.

Years of talks have done little to resolve these divergent views of the EPAs, which the EU says must be signed by the end of the year. The EU has committed itself to an ‘aid-for-trade’ package which would see €2 billion given to poorer states every year from 2010 to boost economic development. The European Commission says that the European Development Fund will be dipped into to help implement the EPAs. But critics say this is not enough to offset the disadvantages. "There is not enough clarity about where the money will come from and there is a linkage being made between aid and EPAs, complains Amy Barry of Oxfam International. "The language from the Commission is, ‘sign an EPA and you get your money’."

Last month the EU appeared to have made a major gesture by promising full market access to the EU for ACP products. Rice and sugar will be exempt, as will bananas, if differences can be resolved which saw Spain nearly block conclusions from the development ministers meeting last week (15 May).

But critics say the least developed countries in the ACP already have full access to EU markets and that linking this to the EPAs is disingenuous.

Other details that might soften criticism of the EU are, thus far, missing from the negotiations, say detractors. ACP states want to see changes to the rules of origin whereby many of their products are exempt from special access to EU markets because of the involvement of third countries in production. "There are endless promises that they are doing something about it but we can’t see the detail we need to see. On what grounds should the ACP states feel confident of accepting empty promises?" asks Barry.

The EU has also stressed that it could be years, possibly decades, before ACP countries have to open up their markets for sensitive products. "It is up to the ACP side to name their sensitive products," one diplomat said. But the negotiations are not being conducted on an individual country-by-country basis but on a regional level, which, according to Barry, worries some states which fear that their sensitive products might get overlooked.

The end-of-year deadline is another controversial issue, with some regions more ready than others to sign the EPAs. While least developed countries will be able to get access to EU markets after 2007, when the current preferential system ends, other ACP states, especially those with manufacturing exports, are struggling to conclude the agreements. They fear that their industrial exports will be hit by high EU tariffs from 1 January 2008. These states have asked that the deadline be pushed back to allow for further negotiations, but the EU is in no mood to grant postponement. "The Commission is adamant that the deadline needs to be made and governments are under pressure from [domestic] business to sign," says Barry.

She adds: "Some states, such as Nigeria and Kenya, are just not ready to sign and as we get closer and closer it’s harder to publicly dig their heels in."

As the deadline approaches, it is apparent that time is not on the ACP countries’ side. Even the more sceptical member states believe that the EPAs are the only way to solve the problems posed by the WTO ruling. "We are reasonably happy with the negotiations," says one diplomat. "But if we had our way, we would continue the current system of preferential access. All in all the EPAs are the best of a bad lot."

Ministers from some of the 76 African, Caribbean and Pacific (ACP) states gather in Brussels today (24 May) with their EU counterparts to discuss the final stretch of negotiations for Economic Partnership Agreements (EPAs).