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What Is The Economic Partnership Agreement

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Economic partnership agreements are intense alliances signed by two or more countries that provide for reciprocal economic integration and participation. The agreements proved very popular around the world at the beginning of the 21st century, with the nations of Europe, Asia, Africa and the Pacific united to survive and compete in a turbulent international economic context. The agreements provide a framework for cooperation, not competition between geographically distant economies. An agreement between a stronger economy and a weaker economy should stimulate the economic development of the weaker nation, while bringing real benefits to the strongest. They aim to maintain peace between nations in different parts of the world and to improve the standard of living of families in less developed countries. The overall goal of EPAs is to contribute, through trade, to sustainable economic growth and poverty reduction in ACP countries. The EPAs will therefore take specific steps for this specific group. Unlike other ACP countries, the smaller group is invited to reject EPAs and continue trade relations under the « Everything but Arms » (EBA) regulation. Launched in 2001 by the Council of Ministers, this change to the EC`s system of generalised preferences has since regulated trade relations between the EU and LDCs that have chosen to use this facility and allows all LDC products duty-free access to all LDC products, without any quantitative restrictions, except arms and ammunition. This provision, while facilitating the situation of LDCs under the new trading system, has also been criticised because the EBA initiative prevents LDCs from opening their markets to EU products under an EPA. Another weakness of the EBA initiative is that it uses the GSP`s rules of origin, which require a two-step transformation for textiles and clothing.

On the other hand, the rules of origin of EPAs allow for a one-stage transformation of exports of these sectors. This is one of the reasons why Mozambique and Lesotho (both LDCs) signed the SADC INTERIMs EPA in November 2007 and signed in July 2009. Angola (which is not the least witnessed in the configuration of the CDAA EPA) has decided to continue its trade under the EBA, as its main exports to the EU are oil and diamonds, which can enter duty-free and quota-free as « fully preserved » origin products in accordance with the EBA`s rules of origin. How can the WTO EPA be made compatible? Reform of the rules governing regional trade agreements Because of the WTO`s persistent incompatibility with previous agreements, the main feature of EPAs is their reciprocity and non-discriminatory nature. These include the phasing out of all trade preferences introduced between the EU and ACP countries since 1975 and the phasing out of trade barriers between partners.

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