EPA Review Annex Documents - DFID

spent for these impact assessment studies and validation workshops. The cost of the
studies was financed by the PMU.
Table 7 Negotiating costs
Type
Calculation Estimated cost in
USD
Travel/Air ticket (number of meetings X
estimated cost X number of participants)
180x1500x2 $540,000
Hotel (number of meetings X estimated
cost X number of days X number of
participants)
180x100x4x2 $144,000
Per Diem (number of meetings X 180 X 70 X 4 X 2 $100,800
estimated cost X number of days X
number of participants)
Total estimate for non-RNF negotiations $784,800
For RNF negotiation $78,480
Grand estimate
Source : Author’s own calculations
$863,200
Estimated total costs
The estimated costs of EPA negotiations are around $1.2 million. These do not include
the labour costs of preparing and participating in the negotiations.
Cost-benefit analysis of counterfactual costs
A proper account of the resources required for the EPA negotiations requires taking into
consideration the expected benefits from the process, as well as the costs and benefits
from alternative options. This is an extremely challenging task, since for some of the
benefits and costs we have detailed calculations from existing evidence and the case
studies, while for other elements such as the impact of liberalising services under EPAs
or intangible elements such as enhancing or worsening regional integration
quantification may be extremely complex. As a result, we aim to provide some indicative
value of the expected benefits and costs for the different options, rather than a concrete
figure. Despite the fact that trade policy decisions depend on a large number of factors,
sometimes unrelated to the expected benefits, the cost-benefit exercise is extremely
important because helps us to judge whether some of the trade policy decisions taken
by negotiating EPAs or other agreements make economic sense.
In the case of Ethiopia, the main counterfactual option to EPAs was to remain on EBA
without further engaging in EPA negotiations. Nevertheless, the Ethiopian government
never considered this as a realistic option. This is despite the fact that in the contrast to
other countries that were concerned about the uncertainty around EBA/GSP, the
possibility of EBA removal was not seen as a credible threat by the Ethiopian
government.
Instead, the perception was that the lessons learnt from EBA and Lomé/Cotonou
preferential access provisions indicated that the net impact on development had been
insignificant overall. Therefore, it was expected that to make the EPA more attractive to
the LDCs the EC would provide technical assistance and resources to enhance
competitiveness of different sectors of ESA member countries. Accordingly, the
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