New ACP-EU Trade Arrangements: New Barriers to Eradicating Poverty?
31.03.2004: Study by GAWU, DHS, CIECA, ADEID, GRAPAD and EUROSTEP
In June 2000 the European Union (EU) signed a co-operation agreement with the African, Caribbean and Pacific (ACP) group of countries known as the Cotonou Agreement. The Agreement provides the framework for the EU’s co-operation with 78 ACP countries until 2020. As a successor to the Lomé Conventions, the new Agreement covers most aspects of the EU’s co-operation with the ACP, including trade, aid and political dialogue.
Title II of the Cotonou Agreement defines the objectives and principles of the new trade arrangements between the EU and the ACP countries. According to the Agreement, the Parties agreed to conclude new World Trade Organization (WTO) compatible trade agreements, which aim to progressively remove barriers to trade and enhance cooperation in all areas relevant to trade. These trade arrangements are supposed to replace the preferential non-reciprocal trade system foreseen by the Lomé Conventions. The objective is to enable ACP States to play a full part in international trade and advance poverty eradication and sustainable development in the ACP. To this end the ACP and the EU began negotiations on Economic Partnership Agreements (EPAs) in September 2002, and are supposed to end these negotiations by December 2007 at the latest. EPAs, which are an integral part of the Cotonou Agreement and are supposed to embody the new ACP-EU trade arrangements, are based on four main principles: partnership, regional integration, development, and compatibility with the WTO. However, a serious point of concern is on their ability to contribute to the general objective of the ACP-EU partnership - poverty eradication.
This study describes how proposed ACP-EU trade arrangements - Economic Partnership Agreements - could impact on the fight against poverty in five ACP countries: Jamaica, the Dominican Republic, Ghana, Benin and Cameroon. The main focus of the study is on examining what the different consequences are for people in the ACP with the removal of tariff barriers to EU products on the one hand, and the easing of non-tariff barriers to ACP products on the other. It sets benchmarks for a credible process and outcome of the design of ACP-EU trade arrangements that advance poverty eradication in the ACP. Its analysis is based on experiences and forecasts of people from the five countries working in close proximity with people living in poverty, and with sectors that are key to its eradication.
The conclusions of this analysis are that if EPAs are based on liberalised trade between the EU and the ACP countries, rather than advance poverty reduction, they will set back poverty reduction programmes and strategies in the ACP and undermine the Cotonou Agreement, with regard in particular to the promotion of social sector funding.