ABSTRACT
The imminent expiration of the World Trade Organization (WTO) waiver on 31 December 2007, which provided legal cover for the European Union’s (EU) preferential trade regime for goods originating from the African Caribbean and Pacific (ACP) countries, coupled with the improbability of securing a renewal of the waiver, signalled the end of non-reciprocal EU-ACP trade relations. Such a change in ACP countries’ trading environment has so far spawned vastly different responses within the six ACP negotiating regions. These run the gamut from the CARIFORUM2 group’s decision to enter into a comprehensive Economic Partnership Agreement (EPA) with the EU to the interim EPAs signed by some members of the Pacific Region, Southern Africa Development Community (SADC), West Africa, Eastern and Southern Africa (ESA) and East African Community (EAC), all of which apply solely to goods trade, leaving open the possibility of concluding more comprehensive EPAs in future. The lack of consensus within the latter regions was vividly illustrated by the decision of some non-least developed countries (non-LDCs) to opt-out of the interim EPAs, foregoing their preferential access to EU markets. Meanwhile, a number of ACP LDCs saw limited value-added in entering onto EPAs, preferring instead to continue to export under the EU’s Everything But Arms (EBA) initiative affording them non-reciprocal duty-free access to the EU market. The signature on 15 October 2008 of the EU-CARIFORUM EPA drew a curtain on 30 years of preferential access to European markets enjoyed by Caribbean producers. Failure to negotiate a WTO-consistent trade regime was a luxury the CARIFORUM region could ill afford since the application of Generalized System of Preferences (GSP) rules would have disrupted trade as the majority of the region’s exports to Europe would need to contend with higher levels of GSP import duties. The challenge for the region was thus to negotiate ‘a development friendly, asymmetrical, reciprocal agreement whose net welfare benefit . . . would be greater than that under the best available GSP’ (Gonzales 2008). In several regards, the CARIFORUM EPA exceeds the thresholds laid down under General Agreement on Tariffs and Trade (GATT) Article XXIV and General Agreement on Trade in Services (GATS) Article V to determine WTO
compatibility. The EPA also features many WTO-plus provisions. The CARIFORUM EPA represents a significant departure from earlier trade arrangements between the EU and the CARIFORUM region by moving beyond goods trade and incorporating areas such as trade in services, investment, government procurement, competition policy and trade-related intellectual property matters. Indeed, even while allowing for inevitable differences in EPAs to be (possibly) concluded with the African and Pacific regions owing to differences in economic structures, development levels and collective preferences, the argument can be made that the CARIFORUM EPA has set the bar for all subsequent EPA negotiations and perhaps indeed for future preferential trade agreements (PTAs) entered into by the EU. There is little doubt that such a bar is quite high. Given the precedent-setting value of the CARIFORUM EPA, some of the questions that are bound to be uppermost in the minds of trade officials of subSaharan African (SSA) countries are: What lessons can SSA countries learn from the WTO-plus provisions in the CARIFORUM EPA? Which WTO-plus CARIFORUM EPA elements hold the potential, if replicated in the African EPAs, to stimulate development in these countries? Against this background, this chapter examines what are arguably three of the most innovative and precedent-setting elements of the CARIFORUM EPA: (i) the Title on Services, Investment and E-Commerce; (ii) the Chapters on Public Procurement and Competition Policy and the Protocol on Cultural Development; and (iii) the Development Finance and Cooperation provisions of the Title on Services and Investment. The chapter then draws key main lessons for African ACP members and highlights a number of issues SSA negotiators might need to consider should they opt to conclude a more comprehensive compact on services and investment with the EU.
