The trade escape

The trade escape:
WTO rules and alternatives to free trade Economic Partnership Agreements

ActionAid, September 2005

Executive summary

The free trade Economic Partnership Agreements
(EPAs) proposed by the European Union would have a
devastating effect on African, Caribbean and Pacific
(ACP) countries if they go ahead as planned. New and
unfair rules would require developing countries to cut
their tariffs on up to 90% of imports from the EU. Jobs
would be lost and livelihoods would be wrecked.
European corporations would be empowered and ACP
governments impeded. The most unequal trade
negotiations in history could produce the most
disastrous results for development.

Yet there are real alternatives to this outcome.

Both the EU and the ACP must now stop negotiating
free trade Economic Partnership Agreements.
Proposed Economic Partnership Agreements must then
be radically reformed so that the European Union
makes no liberalisation requirements of ACP countries.
ACP countries would continue to enjoy preferential
access to the European market while maintaining the
right to protect their industries from unfair competition.
ACP countries would also be able to decide to
unilaterally cut tariffs in a strategic and targeted way if
they considered it in their developmental interests to do
so. Radically reformed EPAs require changes to the
European Commission’s negotiating mandate and WTO
rules on regional trade agreements.

There are also alternatives outside the EPA framework.
Here, the European Union is in breach of its treaty
obligations to the ACP, an opinion backed by legal
advice from a lawyer from Matrix Chambers. Under the
Cotonou Partnership Agreement - the treaty setting out
the relationship between the EU and ACP for the next
generation - the non least-developed ACP countries
have the right to choose an alternative trade deal
should they wish. By proclaiming possible alternatives
as second best, the European Commission is
prejudging what these alternatives might be, thereby
violating international and European Community law.
One possible alternative outside the EPA framework is
the EU’s Generalised System of Preferences. This offers
ACP countries certain advantages because it makes no
liberalisation requirements of them, but under current
plans it would effectively exclude some current ACP
products from the European market.

A second option is the EU’s Everything But Arms
scheme, currently available only to the very poorest
countries in the world. This would need to be extended
to all low-income countries with similar development
needs. Its ‘rules of origin’ requirements would need to
be improved and it would need to become a
contractual rather than a unilateral preference scheme.
African, Caribbean and Pacific countries must be able
to choose between at least two good alternatives: a
radically reformed Economic Partnership Agreement
and a pro-development alternative.

EU, African, Caribbean and Pacific policy-makers
must make the changes necessary to make this
a reality.

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source: ActionAid