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									         ACP-EU JOINT PARLIAMENTARY ASSEMBLY
 COMMITTEE ON ECONOMIC DEVELOPMENT, FINANCE AND TRADE
     European Parliament, Brussels, 10 September 2008




The EPAs and their potential
impact on the ACP States:
A reflection

                                          Dr San Bilal
EPAs offer opportunities…
•   Building on regional markets
•   Stimulating investment
•   Locking-in of trade reforms
•   Integration into world economy
•   Compatible with WTO rules
•   Development dimension?
… and challenges
A controversial impact:
• Adjustments to reciprocity
• Loss of customs revenues
• Complex regional integration process
• Capacity problems at all levels
• Evolving global context
    Some Economic effects of EPAs
• Trade creation and trade diversion:
    + Caribbean, SADC, ESA, Pacific ?
    - West Africa (UEMOA, Senegal, Mali,    Nigeria) ?
• Consumer and production surplus
    consumer gains: lower prices ?
    exporters gains ; competition for local producers
•   Government revenues: loss of trade taxes
•   Competition effects
•   Agglomeration effects
•   Investment effect
•   Technology transfer effects
•   Social and environmental effects
                Methodology
• Static effects – partial equilibrium vs Dynamic
  effects – general equilibrium
• Focus on trade in goods (not services, not TBT,
  trade-related issues)
• Welfare effects ?
• Assumptions
• Benchmark (Lomé/Cotonou; GSP(+); EBA)
• International context (WTO, RI, etc.)
• Data
  Conclusions of ex ante studies
• Results highly dependent on studies
• Trade creation > trade diversion (except in some
  countries/regions – e.g. WA) ?
• Significant loss of fiscal revenues:
   In low income countries, 70% of import duties revenue loss not
  replaced by other taxes (Keen & Baunsgaard, 2005)


• Impact varies from country/region to country/region
• Partial picture only
            New (interim) EPAs
• 35 ACP countries have initialled agreements by end
  2007:
   – Full EPA:               15 Caribbean countries
   – Interim EPAs (IEPAs):   18 African countries + 2 Pacific

• Key benefit: preserve access to EU market

• Agreements concluded in haste, and it shows

• ACP export to the EU under 3 different regimes:
  (I)EPAs, GSP, EBA [+MFN]
                    Overview of signatories
      EPA   Signatory states in   Countries falling into EBA/standard   Proportion of     Number of
             December 2007                        GSP                     signatory     liberalisation
               (LDCs in red)                                              countries       schedules
ESA         Comoros               Djibouti                                   45%               5
            Madagascar            Eritrea
            Mauritius             Ethiopia
            Seychelles            Malawi
            Zimbabwe              Sudan
                                  Zambia
EAC         Burundi               —                                         100%               1
            Kenya
            Rwanda
            Tanzania
            Uganda
SADC        Botswana              Angola                                     71%               2
            Lesotho
            Mozambique
            Namibia
            Swaziland
CEMAC       Cameroon              Chad               Eq. Guinea            12.5%              1
                                  Cent. African      Gabon
                                  Rep.               S. Tomé/Principe
                                  Congo
                                  DR Congo
ECOWAS      Côte d’Ivoire         Benin              Mauritania             13%               2
            Ghana                 Burkina Faso       Niger
                                  (Cape Verde)       Nigeria
                                  Gambia             Senegal
                                  Guinea Bissau      Sierra Leone
                                  Liberia            Togo
                                  Mali
                     Liberalisation schedules agreed in initialled interim agreements
                     (cumulative value of imports from the EU, to be liberalised by the specified year)

             2008      2010    2012     2013    2017     2018     2022    2023     2033         total
Fiji        24%                         37%               78%             81.5%                81.5%
PNG        88.1%                                                                               88.1%
EAC                    64%                                                 80%     82%          82%
Comoros                                 21.5%                    80.6%                         80.6%
Madagascar                               37%                     80.7%                         80.7%
Mauritius  24.5 %                               53.6%            95.6%                         95.6%
Seychelles                              62%      77%             97.5%                         97.5%
Zimbabwe                        45%                               80%                           80%
                                                                                                86%
BLNS                   86%
                                                                                           +47 tariff lines
Mozambique   78.5%                                                                             80.5%
Cameroon                                                  50%              80%                  80%
Cote
                                                         69.8%            80.8%                80.8%
d’Ivoire
                                                         62.24            80.48
Ghana                                                                                          80.48%
                                                           %                %
Caribbean    52.8%                      56%              61.1%            82.7%   86.9%        86.9%
  Levels of national commitment


• All of the African EPAs are different ( except EAC)

• No clear pattern can be identified that the poorer
  countries have longer to adjust than the richer ones

• Countries seem to have obtained a deal that reflects
  their negotiating skills and EU position/interests
    Implications for regionalism

• Little coherence between the interim EPAs
  concluded and the regional integration
  processes in Africa:
  – Countries having initialled interim EPAs
  – Liberalisation commitments
  –…
                             Comparison of liberalisation schedules

Duration                               15 years or fewer           16–20 years             20+ years
                            BLNS Comoros Côte d’Ivoire Ghana            Cameroon        All EAC
                               Madagascar Mauritius               Zimbabwe
                               Mozambique Seychelles

Liberalisation starts for              2 years or fewer             3–5 years               6+ years
    positive-tariff
    goods
                            BLNS Côte d’Ivoire                      Cameroon       All EAC Comoros
                               Ghana Mauritius                                          Madagascar
                               Mozambique                                               Seychelles Zimbabwe
Exclusions                                Under 15%                  15–20%                  20+%
                            Lesotho Mauritius                  Côte d’Ivoire             Botswana
                            Namibia                               Kenya                Burundi
                            Seychelles                            Uganda               Cameroon
                            Swaziland                             Comoros              Ghana
                                                                  Madagascar           Mozambique
                                                                                       Rwanda
                                                                                       Tanzania
                                                                                       Zimbabwe
                             Expected tariff revenue losses from EPAs
             Country                  Hypothetical revenue ($000) on:         1st tranche share
                               All items being lib.       1st tranche items
ESA
Comoros                              3,508                          0                0
Madagascar                          32,643                     13,631               42%
Mauritius                           18,074                      3,858               21%
Seychelles                         142,874                    141,748               99%
Zimbabwe                            14,531                      6,906               48%
Central and Western Africa
Cameroon                            99,000                      20,000               21%
Côte d'Ivoire                      139,000                      83,000               60%
Ghana                              162,000                    153,900                95%
EAC                                                   2nd tranche items       2nd tranche share
Burundi                              4,827                       4,368               91%
Kenya                               39,515                      26,884               68%
Rwanda                               3,019                       2,144               71%
Tanzania                            16,718                      12,906               77%
Uganda                               8,746                       6,721               77%
       Key issues in future EPAs
• Regional coherence:
   – EPA vs non-EPA countries ( = EPA, GSP, EBA)
   – Identification of regional exclusion list (criteria for sensitive
     products: eg agriculture vs fiscal considerations)
   – Common position or ―à la carte‖: goods; services; others
• Implementation of IEPAs in 2009 with continuing
  negotiations?
• CARIFORUM-EU EPA as a benchmark?
• Contentious issues
• Scope of EPA: trade-related issues
• Development dimension & chapter
                 Options for the way forward:
              regional coverage of an agreement
                         Regional   Sub-regional   Country
EPAs
- Full EPA
- Narrow (interim) EPA
Alternative regimes
- Standard GSP
- GSP +
- EBA
    Impact of “Contentious” issues
•   Definition of SAT (note: no S&D for LDCs)
•   Transitional periods
•   Export taxes
•   Free circulation of goods
•   Bilateral safeguards
•   Infant industry
•   Standstill and Non-execution clause
•   MFN clause
•   + specific import taxes to finance ROs!
•   …
         Some key recommendations:
          Roles of Parliamentarians
•   Scrutinise negotiations
•   Promote consultation with NSA
•   Assess possible impacts before concluding
•   Don’t wait and see (e.g. Caribbean and Guyana)
•   Don’t focus only on goods; assess also merits of
    other issues (services, TBT/standard, trade-related
    issues/new generation, development support)
•   Consider broader national and regional reform agenda
•   Identify accompanying measures, adjustments
    policies
•   Identify monitoring mechanisms and criteria
•   Consider alternatives
•   Set realistic timetables and objectives
                               References
• ODI - ECDPM (2008), The new EPAs:
  comparative analysis of their content and the challenges for
  2008, www.ecdpm.org/pmr14 www.odi.org.uk

•   Overview of quantitative analyses of EPAs: Market and Revenue effects of
    liberalisation of ACP barriers and enhanced EU market access, R. Babula, K. Baltzer,
    Part 1 of a survey produced for the Danish Parliament, Institute of Food and Resource
    Economics (FOI), Copenhagen 2007, http://www.foi.life.ku.dk

•   The Potential Effects of Economic Partnership Agreements: What Quantitative
    Models Say, Briefing Paper 5; June 2006; Overseas Development Institute (ODI)

•   An Impact Study of the EU-ACP EPAs in the Six ACP Regions, L. Fontagne, C.
    Mitaritonna and D. Laborde, CEPII – CIREM, January 2008.
    http://www.cepii.fr/anglaisgraph/workpap/summaries/2008/wp08-04.htm

•   EPAs between the EU and ACP countries: What is at stake for Senegal, V. Berisha-
    Krasniqi, A. Bouët and S. Mevel, IFPRI, April 2008
    http://www.ifpri.org/pubs/dp/ifpridp00765.asp

•   Alternative (to) EPAs. Possible scenarios for the future ACP trade relations with the
    EU, ECDPM Policy Management Report 11, 2006 www.ecdpm.org/pmr11
For more information, please refer to:
        www.acp-eu-trade.org
          www.ecdpm.org
  Trade Negotiations Insights (monthly)
    www.ecdpm.org/tni www.ictsd.org/tni

ECDPM
                                 San Bilal
O.L. Vrouweplein, 21
                                 sb@ecdpm.org
NL – 6211 HE Maastricht
                                 Tel. +31-43-350 29 00
Rue Archimède 5
                                 Fax +31-43-350 29 02
B- 1000 Brussels

								
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