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Developing countries

EU agriculture and ACP countries - in a nutshell

The EU granted, for the first time ever, duty-free and quota-free market access, only subject to transitional period for sugar, for all African, Caribbean and Pacific (ACP) countries's products under the Economic Partnership Agreements (EPAs).

The objective of development friendly EPAs is to support the regional integration process in the ACP countries and promote their progressive integration into the global economy, by enhancing production and the capacity to attract investment while ensuring conformity with WTO provisions.

The EU grants trade preferences to developing countries under different schemes. The EU's non-reciprocal preferential arrangement is the Generalised System of Preferences (GSP) available to all developing countries, combined with its Everything But Arms (EBA) initiative for Least Developed Countries (LDCs). In addition, a special preferential scheme was available for the group of ACP countries under the Lomé Conventions and the subsequent Cotonou Agreement. These unilateral preferences were allowed under the so called WTO waiver which expired on 31 December 2007.


Economic Partnership Agreements - New Drivers of Development

The trade preferences of the Cotonou Agreement, while well intentioned, have not succeeded in their objective of helping to integrate the ACP countries into the world economy, nor protected the EU's trade relationship with ACP from legal challenge by other WTO Members. This is why the ACP States and the Community decided, in the Cotonou Convention, to overhaul their previous trade relations. They agreed to replace the Cotonou trade preferences by new WTO compatible trading arrangements called Economic Partnership Agreements (EPAs), progressively removing barriers to trade and enhancing cooperation in all areas related to trade.

EPA negotiations have been conducted with seven regional configurations covering all ACP countries (West Africa, Central Africa, Eastern and Southern Africa, East African Community, the Southern African Development Community, Caribbean and Pacific). At the end of 2007, negotiations on a first full regional EPA with the Caribbean region and a number of interim agreements were concluded with certain countries or regions in Africa and the Pacific. These interim agreements serve as stepping stones towards full regional EPAs currently under negotiation. The aim of these agreements is to help ACP countries to build larger markets, foster trade in goods and stimulate investment.

The full EPA with the Caribbean region (CARIFORUM) was signed on 15 October 2008 (Haiti signed on 11 December 2009). Interim agreements were signed with: Ivory Coast on 26 November 2008; Cameroon on 15 January 2009; Botswana, Lesotho and Swaziland (SADC) on 4 June 2009 and Mozambique on 15 June 2009; Madagascar, Mauritius, the Seychelles and Zimbabwe (ESA) on 29 August 2009, Papua New Guinea on 30 July 2009 and Fiji signed on 11 December 2009. Signature arrangements pending with EAC and the following countries, which have initialled interim EPAs at the end of 2007: Ghana, Namibia, Comoros and Zambia (more information on agriculture and regional EPAs you can find in the Regional Fiches).

The main objective for 2010/11 remains to conclude the comprehensive, long-lasting EPAs with all the remaining six ACP regions (5 in Africa and one in the Pacific), based on a shared vision for the future. Only "full" EPAs can deliver a comprehensive approach to trade and development in ACP regions.

Given the importance of agriculture for ACP countries, agriculture plays an essential role in EPAs. The EPA with CARIFORUM, for example, contains a chapter on agriculture and fisheries, which, among others, covers provisions on cooperation and assistance to the agri-food sectors of the region and addresses the issue of food security.

The new agreements will slowly and progressively open up EU-ACP trade in goods: immediately for ACP goods exported to the EU and gradually for EU goods exported to ACP countries. The EC has opened its market to duty-free and quota-free exports from the ACP under EPAs (with the exception of South Africa), including all agricultural products with transitional provisions only for sugar (till 2015). As from 1 January 2010 the EU fully opened marked access for rice originated in ACP countries and the only product remaining with transitional provisions is sugar.

Graph 1 shows the importance of the EU as a destination for developing countries' (according to the FAO definition) agricultural exports.

Graph 1:

Import from developing countries, average 2006-2008

 

Moreover, EU imports of agricultural products from developing countries have been on the increase. As shown in the graph 2, in 2009, the EU imported agricultural goods worth € 55 million from developing countries (including South Africa), compared to € 47 million in 2006.

Graph 2:

EU27 imports from developing and ACP countries

 

The extensive opening up of the EU market has the added advantage of giving ACP countries maximum flexibility without breaching WTO rules. Opening up of the ACP markets will afford enough flexibility to protect sensitive sectors and offer safeguard mechanisms to cope with unforeseen problems. In fact, most of the ACP's sensitive products are in the agricultural sector, for example Ghana's chicken products - the EC and Ghana agreed that under an EPA there will be no change at all in the tariffs Ghana uses to protect its poultry sector.

 

Rules of Origin

Rules of Origin (RoO) express requirements for a good to be considered as originating and hence qualify for preferential market access.EPA Rules of origin can be found in an EPA annex called Protocol 1 concerning the definition of the concept of "originating products" and methods of administrative cooperation. In comparison with the previous Cotonou trade regime RoOs included in EPAs are made more flexible so that ACP countries have enhanced access to the EU market. The relaxed rules for some agricultural and processed agricultural products like dairy produce, wheat flour, some vegetable oils, pastry, ect. are entlisted in the so called Annex IIa. It is worth mentioning that these products were identified by EPA regions in the course of EPA negotiations. To boost regional integration, EPAs allow cumulation between EPA regions, other ACP countries, the EC and its Overseas Countries and Territories (OCTs), certain neighbouring developing countries and to a limited extent with South Africa.

The EU promotes GIs in ACP countries, i.a. via workshops organised by CTA and TradeCom Facility, which help to disseminate information on the concept of GIs and their potential benefits for ACP countries.

 

Geographical Indications

For developing countries that are important producers of agricultural goods, Geographical Indications (GIs) may provide a useful tool to increase trade and promote development. Till now only CARIFORUM agreed to include provisions on GI in their regional EPA. The EC-CARIFORUM EPA includes a chapter on GI protection that establishes mutual recognition of national systems of GI-protection assures coexistence of GIs and trademarks – where appropriate. There is also a rendez-vous clause according to which the CARIFORUM States will establish a system of protection of GIs by 2014. In the meantime provisions aim at fostering cooperation to identify and promote GIs in CARIFORUM via the active involvement of the EPA Trade and Development Committee. With other EPA regions negotiations are still ongoing.