EPA Review Annex Documents - DFID

3. Quantification of costs of counterfactual negotiations
The EBA is a unilateral offer by the EU which does not hold any binding commitment. It is argued
by some that the danger remains that if the EU withdraws the offer at any point and they could
advise countries like Ethiopia (non-WTO members) to give prior attention in concluding the EPA.
However, others argue that, though the EBA seems a unilateral offer, in reality it is the result of a
multilateral commitment that all developed and developing countries including the EU, committed
to extend Duty-Free-Quota-Free (DFQF) market access to all LDCs, whether WTO or non-WTO
members. Therefore, withdrawal of the EBA seems remote. Moreover, there will be moral onerous
on the EU if it tries to deny such preferences to poor LDCs like that of Ethiopia merely for not
being WTO member.
Second and most important is that, though not clearly stated as “EBA” in the Cotonou Agreement,
Article 37 (9) offers similar preference like that of the EBA. 105 Therefore one can conclude that
even though the EBA seems to be a unilateral offer, it is actually an offer provided as a result of
an agreement.
In fact for Ethiopia, the impact does not have any difference. Firstly, the duty of main export of
Ethiopia to the EU are either already 0% or are covered under the GSP DFQF Preference.
Secondly it is arguable that the EBA is covered under the Cotonou. Therefore, there was no
specific pressure to negotiate the EPA or acceding to the WTO.
However, Ethiopia voluntarily decided to rigorously negotiate the EPA with EC rather than
entirely rely on the unilateral EBA/GSP offered at the goodwill of the EU.
For Ethiopia, the motive and driving force to negotiate EPA (and continues to be) overriding
trade and/or market access that they may get from this envisioned EPA, was the promise and
potential benefits clearly stated on the Cotonou Agreement. Article 34-37 of the Cotonou
Agreement clearly states the objectives, principles, modalities and procedures of the Economic
Partnership Agreement.
Box-1:- Objectives, Principles, Modalities and Procedures of the EPA
Article-34, Objectives states that;
• … aim at fostering the smooth and gradual integration of the ACP States into
the world economy, with due regard for their political choices and
development priorities, thereby promoting their sustainable development and
contributing to poverty eradication in the ACP countries,
• … to play a full part in international trade…. to participate actively in
multilateral trade negotiations, … aim at enhancing the production, supply
and trading capacity of the ACP countries as well as their capacity to attract
investment.
Under ARTICLE 35, Principles it is stated that;
• … shall build on regional integration initiatives of ACP States, bearing in mind
that regional integration is a key instrument for the integration of ACP
countries into the world economy,
• … shall take account of the different needs and levels of development of the
105 Article 37 (9) “…at the latest 2005 will allow duty free access for essentially all products from all LDC
building on the level of the existing trade provisions … that apply to their exports”
104