EPA Review Annex Documents - DFID

In this exercise, it is important to ensure that the services and investment chapters provide
for development co operation benefits that adequately support the implementation of any
commitments made. It is also essential that African and Pacific EPA partners get the timing
and sequencing of their liberalisation right. Given the limited negotiation and implementation
capacity of these countries, another priority area should be the negotiation of regulatory
frameworks (either on a sectoral or general basis) and the provision of required development
co-operation assistance to ensure the fulfilment of commitments in this regard. African
countries have consistently identified weak regulatory capacity as a hindrance to any
progress in services. “A comprehensive EPA may thus represent a useful opportunity to
push ahead in this specific area as the combination of binding commitments on the part of
the African countries coupled with the provision of development assistance and financing
from the EC hold the potential to stimulate economic diversification into services” as Sauve
and Ward, 2009 note. A useful guide here could be the Agreement on Trade, Development
and Cooperation between the EU and South Africa, which has detailed provisions on
development cooperation.
Given that some countries may be better prepared to undertake commitments on services
liberalisation than others, variable geometry should be applied within a region as well to
address the specificities of individual countries and sub-regions. It is also important that any
commitments undertaken by individual countries in the context of an EPA remain coherent
with their regional agenda and ambitions, to prevent regulatory fragmentation and
disintegration.
Besides regional considerations, two other key factors are likely to determine the occurrence
and shape of final EPAs. The first is the availability of additional aid related to an EPA, “or at
least the packaging of existing development cooperation commitments to give the
impression that fresh Aid for Trade is forthcoming” (Bilal, 2009). Many African countries have
expressed their support for an EPA subject to the delivery of appropriate development
assistance. New Aid for Trade programmes providing the opportunity for better needs
assessments, a more strategic orientation of the support provided and greater coherence
among donors may result in pro-development outcomes.
The second factor is political. Trade negotiations anywhere are driven by politics as much as
economics and this is no less true of the EPA process. Decisions are not always made on
the technical merits of the provisions negotiated, but on broader political and geostrategic
considerations. This is unlikely to drastically change in the near future and would have a
huge bearing on the final shape and outcome of the negotiations and national decisions to
conclude an EPA or not.
5. Conclusions
Services are crucial for the development of ACP economies and the EPAs provide an
excellent opportunity for catalyzing the growth of this sector. While there has been an effort
to include services in the EPA negotiations, with the exception of the CARIFORUM-EU
agreement, the actual outcome falls way short on the triple criteria of coverage, relevance
and feasibility in all other cases. One of the huge problems saddling services negotiations
has been the inherent diversity of these regional groupings and of countries within each
group, which has translated into differences in negotiating objectives and in approaches or
concerns about the EPAs and the regional integration processes itself. In addition, political
dynamics and the lack of institutional capacity have also meant that a positive development
outcome has been hard to achieve.
An ideal agreement between the EU and ACP countries should build on existing provisions
on services in the CARIFORUM-EC agreement through a focus on specific services sectors
in these economies such as tourism, air transport (passenger as well as cargo), distribution
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