EPAs or Economic Partnership Agreements
The Cotonou Agreement, signed in 2000, is a trade partnership pact between the African, Caribbean and Pacific Group of States (ACP) and the Europe Community (EC). Its predecessor, the Lomé Convention, originally signed in 1975, provided the framework within which trade relations and development cooperation between the African, Caribbean and Pacific Group of States have been conducted with the European Union. The centerpiece of the trade relations has been non-reciprocal preferential trade access for ACP goods into Europe.
The Cotonou Agreement provided for the temporary continuation of Lomé’s non-reciprocal trade preferences as well as the negotiation of a successor trade framework based on WTO-compatible rules. As part of the Uruguay Round of the World Trade Organization (WTO) and prior to the ending of the Lomé Convention new rules had been negotiated to govern multilateral trade. Those rules are based on reciprocity in trade agreements and prohibit discrimination among developing states save in specified circumstances.
As a consequence, the Cotonou Agreement with its non-reciprocal principle and preferential access for Caribbean (and other ACP) exports to Europe required special permission. After much difficulty a waiver was secured from WTO members. The waiver request faced opposition from an international community opposed to non-reciprocal trade agreements in general.
Costly concession had to be made in order to obtain the waiver in 2001. As with Cotonou the ACP and EU also undertook to negotiate WTO-compatible alternatives. Those alternatives include Economic Partnership Agreements, or EPAs.
According to Article 36, the ACP and EC agreed to conclude new WTO compatible trading arrangements, "removing progressively barriers to trade between them and enhancing cooperation in all areas relevant to trade." Article 37 provides that the "Economic Partnership Agreements shall be negotiated during the preparatory period which shall end by 31 December 2007 at the latest". The Commission was not willing to request another waiver for the period after 2007.
In 2002, the first phase of negotiations started between the Commission and the ACP group on issues of general interest to the all ACP countries of the agreements followed by separate negotiations with six ACP regions that were established for the EPA negotiations (Caribbean, West Africa, Central Africa, Eastern and Southern Africa, SADC minus, Pacific).
By October 2007, it became apparent that only the Caribbean States were ready to initial a full EPA. The Commission confirmed its refusal to request a prolongation of the WTO waiver for those countries that did not agree on EPA or to seek for other transitional solutions, such as extending the GSP+ regime to all ACP countries, but pushed ACP countries to sign WTO compatible interim or "stepping stone" EPAs. On 23 October 2007, the Commission issued a communication proposing to conclude WTO-compatible interim agreements either on regional, sub-regional or national level.
In order to create such WTO-compatible Free Trade Agreements, they must liberalise "substantially all the trade" (on goods) between the countries involved and "in a reasonable length of time". These provisions of GATT Article XXIV are subject to interpretation, which explains the considerable differences between the initialled EPAs. However, it is the official interpretation of the "reasonable length of time" that the liberalisation process should exceed ten years only in exceptional cases. Minimum requirement for covering "substantially all trade" would be not less than 80% of trade between partners. Obviously, these "understandings" are also subject to interpretation.
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