EPA Review Annex Documents - DFID

In terms of coverage, there are a wide range of exclusions. Since one of the partners (the
EU) made an almost complete liberalisation of their imports and given the size of its trade, a
“substantial” liberalisation of the bilateral trade could be achieved with a lower coverage from
its partners. It is clear that this is the approach followed for these agreements. If the share of
imports excluded in each agreement is taken into consideration, except the Ghana interim
EPA, they all fall below the 20% threshold. On the other extreme, Seychelles has a little
share of exclusions in terms of volume of trade.
If we consider the quantity of lines excluded, Mozambique has excluded 60.2% of their tariff
lines that represents 18.5% of their trade. This implies a heavy protection in a substantial
number of sectors. On the other hand, Comoros, has only excluded 1.7% of their tariff lines
that represent 19.3% of their trade.
Another interesting feature to analyse is the schedule per se. Even if an agreement could
have a long period of implementation, the existence of down payments (immediate
liberalisation) plus trade that is liberalised in the first stages of the implementation indicates
an important effort from the conceding part. For example, Cote d’Ivoire will have by 2013,
three years after the start of the implementation, more than 50% of their imports liberalised,
where only 5.7% of it was liberalised before the start of the agreement. As a consequence,
Cote d’Ivoire could have received a longer implementation period given the importance
liberalisation that will make in the first years of the schedule.
However, the schedule for EAC reveals the opposite. EAC has more years to make
complete the implementation of the agreement but their initial effort is practically zero, given
that 65.4% of their trade is liberalised already. This implies that, a part of the exclusions,
EAC will have around 20 years to liberalise less than 15% of their trade.
More balanced schedules seem to be those within to CARIFORUM and Fiji. A combination
of down payments of 24% in Fiji and a 61% of the trade liberalised in the first ten years in
CARIFORUM, generates a smoother transition to liberalisation.
Therefore, it could have been possible to adopt a flexible interpretation of the Article XXIV by
allowing longer implementation periods to those countries that were willing to make a more
important liberalisation effort at the beginning. Alternatively, countries willing to accept a
shorter implementation period with important liberalisation commitments at the beginning,
could have presented a wider list of exclusions.
The development dimension must not be lost and despite the fact that a quicker and
extensive liberalisation is desirable, it is clear that ACP countries need an SDT in terms of
the length and coverage of the implementation period of the agreement. Not only in terms of
protection of their infant industries but also in terms of the fiscal effects. Therefore, a double
approach of coverage based on the quantity of tariff lines and the share of imports from the
EU could have been devised.
On the other hand, countries that had already initiated an unilateral liberalisation process or
in which a significant part of their trade was already liberalised before the start of the
implementation of the agreement, could have received an special treatment with a longer
implementation period for the rest of their sectors with little liberalisation at the beginning.
2. The Most Favourable Nation Clause in the context of EPAs
In principle the Most Favourable Nation (MFN) Clause means that after the signing of an
agreement, if any part of the agreement negotiates another agreement with a third party, any
concession made to that third party that has been not made in the first agreement, must be
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