Why enhance domestic resource mobilisation in ... - ACP-EU Trade

1 

Trade Negotiations 

Insights 

Regulars 

1 Editorial 

A home grown approach 

to development: A special 

issue on the fiscal implications 

of EPAs and domestic resource 

mobilisation 

2 News and publications 

In brief 

15 WTO 

Roundup 

17 EPA 

Update 

20 Calendar and resources 

Features 

3 Taxation for development 

in Africa: A shared 

responsibility 

Henri-Bernard Solignac 

Lecomte 

5 Why enhance domestic 

resource mobilisation 

in Africa? 

Roy Culpeper and 

Aniket Bhushan 

8 Economic Partnership 

Agreements – How severe 

(and how urgent) is the fiscal 

challenge? 

Jean-Jacques Hallaert 

10 Addressing the fiscal 

challenges of an EPA: Some 

preliminary considerations 

ECDPM 

12 Fiscal impact of the 

Economic Partnership 

Agreement (EPA) in West 

Africa 

David Laborde 

14 Mapping donors’ 

involvement in the area of 

taxation and development: 

The case for better 

coordination and division of 

labour 

International Tax Compact 

Secretariat 

ICTSD 

International Centre for Trade 

and Sustainable Development 

Issue 6 | Volume 9 | July / August 2010 

Issue 6 

Volume 9. July/August 2010 

Available online 

www.ictsd.net/news/tni 

www.acp-eu-trade.org/tni 

A home grown approach to 

development: A special issue on 

the fiscal implications of EPAs and 

domestic resource mobilisation 

In the recent international economic context, 

marked by global crises and instability, 

budgetary and fiscal matters have gained 

greater prominence on the economic recovery 

and growth agenda. In the developing 

world, greater attention has been given to 

domestic resilience to external shocks, types 

of integration to the global economy and 

the pursuit of sound macroeconomic and 

sustainable budgetary policies conducive to 

equitable growth and development. 

An important dimension is the need for 

governments to focus on generating revenue 

at home more effectively. For one, the 

contract it forms between taxpayer and state 

can make governments more accountable 

to its citizens, thus contributing to improved 

economic and political domestic governance. 

It can also free governments from the strings 

attached to donor aid, or the self-interest of 

foreign investors. 

It is not surprising then, that domestic 

resource mobilisation has been receiving 

increased attention. In recent months, for 

instance, the African Development Bank, 

together with the OECD, launched their 

African Economic Outlook 2010, with a focus 

on “Public resource mobilization and aid in 

Africa”. Even more recently the EU Council 

adopted a communication on “Tax and 

Development - Cooperating with Developing 

Countries on Promoting Good Governance in 

Tax Matters”. 

In this special issue of Trade Negotiations 

Insights, we focus on two highly topical 

questions: what degree of fiscal revenue 

loss do the African, Caribbean and Pacific 

(ACP) countries face due to the Economic 

Partnership Agreements (EPAs) with the 

European Union; and second, how can 

ACP governments compensate such losses 

through adjustment measures, engage 

in fiscal reforms and ensure a better 

mobilisation of their domestic resources? 

Neither question is straightforward. 

Estimating revenue loss from trade 

liberalisation is an inexact science, given the 

multiple variables and the poor data in many 

ACP countries. Yet the estimates are getting 

closer to the mark. This is partly because 

the methodologies are improving. It is also 

because a number of countries have now 

signed up to tariff cuts in the EPAs (or interim 

agreements), and so economic modellers can 

base their estimates on actual agreements 

rather than assumptions. 

So how drastic is the revenue loss faced by 

the ACP? In fact, it appears that while for 

some countries the fiscal consequences of an 

EPA are not very significant, for some others 

they can be a major cause for concerns, 

either because of their economic impact or 

because of the political sensitivity of the issue 

or the capacity and institutional constraints. 

More fundamentally, the capacity and 

willingness of countries to engage in fiscal 

reforms, as well as the accompanying support 

they receive to do so, can play a much more 

critical role in ensuring fiscal stability. 

Against this backdrop, we have asked 

experts to highlight strategies for African 

governments to improve domestic resource 

mobilisation, as well as the role the 

international community should play in 

this regard, and to assess the possible fiscal 

implications of EPAs. 

It is our intention that this special issue 

launches an ongoing discussion in the pages 

of TNI on both of these important issues. 1 

Notes 

1 ECDPM has been working on these issues and will continue to 

stimulate an informal dialogue on these themes. Comments 

and suggestions are most welcome, and should be sent to San 

Bilal at sb@ecdpm.org

2 

News and publications 

In brief 

EC launches public consultation on future 

trade policy 

Following the ‘Europe 2020’ paper adopted 

by the European Commission in March this 

year, the Commission has now launched a 

broad public consultation on the future 

direction of EU trade policy. The consultation 

is intended to gather views from relevant 

stakeholders within the EU and in third 

countries regarding the rationale, scope and 

strategic objectives for a future EU trade 

policy. An ‘issues paper’ is intended to set the 

scene for this consultation exercise. The 

Commission expects to set out its policy in 

autumn 2010, explaining how trade policy 

can help achieve the objectives of the ‘Europe 

2020’ Strategy. The consultation will run from 

2 June 2010 to 28 July. For more information, 

see: trade.ec.europa.eu/doclib/html/146220. 

htm 

The Commission has 

now launched a broad 

public consultation on 

the future direction of 

EU trade policy. 

G-20 agree to tackle deficits 

Leaders from the world’s biggest economies 

agreed to a timeline for reducing their budget 

deficits and debt levels, as well as to plans for 

new regulations aimed at enabling banks to 

withstand severe financial crises. At a summit 

in Toronto over the 26-27 June weekend, the 

Group of 20 leading industrialised and 

developing countries said that solidifying the 

still-fragile economic recovery required 

governments to strike an appropriate balance 

between fiscal stimulus and restoring health 

to battered public finances. The G-20 also 

pledged to avoid specific protectionist 

policies. “We renew for a further three years, 

until the end of 2013, our commitment to 

refrain from raising barriers or imposing new 

barriers to investment or trade in goods and 

services, imposing new export restrictions or 

implementing World Trade Organization 

(WTO)-inconsistent measures to stimulate 

exports, and commit to rectify such measures 

as they arise,” said the statement, echoing a 

pledge from last fall’s summit in Pittsburgh. 

For more information, see “G-20 

Compromise on Deficit Reduction, But 

Spectre of Mercantilism Looms”, Bridges 

Weekly Trade News Digest, Volume 14, 

Number 24: http://ictsd.org/i/news/ 

bridgesweekly/79230/ 

ACP assesses the potential impact of the 

Lisbon Treaty on EU-ACP relations 

The ACP Secretariat, together with ECDPM, 

organised a workshop on 27 May to discuss 

the impacts of the Lisbon Treaty on EU 

development and trade policies, including the 

Economic Partnership Agreements. The ACP 

Secretary General and Chairman of the 

Committee of Ambassadors stated the 

groups’ concerns over the impact of the 

Treaty on the long-term development 

partnership with the EU and the group’s 

desire for the Treaty to strengthen the key 

pillars of the ACP-EU partnership. They also 

emphasised the importance of remaining 

open-minded about the changing landscape 

of global politics and whether the purpose of 

the ACP grouping is still relevant to its 

long-term perspectives. For more 

information, see the ECDPM’s website at: 

http://www.ecdpm.org/ 

Food prices continue to rise 

Growth in global agricultural output is 

expected to slow down in the coming 

decade, while production in Brazil, China, 

India, Russia and the Ukraine will likely 

increase, according to the UN Food and 

Agriculture Organization (FAO) and the 

Organisation for Economic Cooperation and 

Development (OECD). High food prices and 

market volatility, however, remain a concern 

for food security, according to the OECD-FAO 

“Agricultural Outlook 2010-2019”. OECD 

Secretary-General Angel Gurría described this 

year’s report as “cautiously more positive,” in 

comparison with recent years. However, he 

warned that, given the likelihood of future 

shocks to the market, governments would 

need to implement policies to help farmers 

be prepared for these situations. Barring any 

market shocks, however, the expected 

slowdown in the rate of growth of 

agricultural yields is unlikely to steer the 

world off track from reaching a 70% 

increase in agricultural production. That 

figure is what experts have said will be 

necessary to sustain the world population in 

2050. For more information, see: http://www. 

agri-outlook.org/pages/0,2987,en_36774715 

_36775671_1_1_1_1_1,00.html 


In the first ever overview 

on the state of access to 

raw materials in the EU, 

the experts identify 14 

raw materials as 

“critical” out of 41 

minerals and metals 

analysed. 

EU report forecasts shortages of 14 

critical mineral raw materials 

Raw materials are an essential part of both 

high-tech products and every-day consumer 

products such as mobile phones. But their 

availability is increasingly under pressure 

according to a report by an expert group 

chaired by the European Commission. In the 

first ever overview on the state of access to 

raw materials in the EU, the experts identify 

14 raw materials as “critical” out of 41 

minerals and metals analysed. The growing 

demand for raw materials is driven by the 

growth of developing economies and new 

emerging technologies. The list was 

established in the framework of the 2008 EU 

Raw Materials Initiative in close cooperation 

with Member States and stakeholders. The 

results of the report will be used for the 

drafting of a communication on strategies to 

ensure access to raw materials, which the 

Commission will publish in the autumn. For 

more information, see: http://europa.eu/ 

rapid/pressReleasesAction.do?reference=ME 

MO/10/263&format=HTML&aged=0&langua 

ge=EN&guiLanguage=en

Issue 6 | Volume 9 | July / August 2010 3 

Taxation for development in Africa: 

A shared responsibility 

Henri-Bernard Solignac Lecomte 

Africa needs more effective, efficient 

and fairer taxation systems. As several 

African nations celebrate 50 years of 

independence in 2010, it is time for a 

continent that still relies too much on 

often volatile and unpredictable 

external flows to take a new look at 

taxes – a potential untapped source of 

billions of dollars. While the primary 

responsibility lies with African 

governments, the international 

community must also play its part. And 

this time, it’s hardly about aid. 

The global economic crisis has shown, yet 

again, how vulnerable Africa remains to 

falling commodity prices and export 

revenues, uncertain future aid flows and 

declines of foreign direct investment (FDI), 

which resulted in a general shortfall of 

external finance. At the same time, the 

continent continues to suffer from an acute 

hemorrhage of capital. Indeed, Kar et 

Cartright-Smith (2008) estimate that Africa 

lost US$854bn, at least, in illicit financial 

outflows from 1970 through 2008. In other 

words, while Africa is overly-reliant on 

external financing, it is a net creditor to the 

world. The case is clear: African economies 

need to mobilise their domestic resources 

better. This is in large part the job of 

governments, who mobilise public resources 

through taxation (and debt) to fund 

investment in roads, power plants, schools, 

health facilities, etc. Over the long term, 

effective taxation can not only reduce a 

country’s dependence upon aid and largely 

unpredictable external finance flows, but it 

will also increase its ownership of the 

development agenda, and lay the foundation 

of a social contract between state, citizens 

and firms. 

The good news is that the 2010 African 

Economic Outlook finds that the average 

African tax revenue as a share of GDP has 

been increasing since the early 1990s, from 

US$113bn in 1996 to 479bn in 2008. The 

bad news is that this has been mostly 

induced by taxes on the extraction of natural 

resources: oil-related taxes alone for the top 

ten exporting countries totalled US$275bn in 

2008. Focusing on natural resource rents 

distracts governments from more politically 

demanding forms of taxation, in particular 

direct forms of taxation, such as corporate 

income taxes on other industries, personal 

income taxes, as well as Value Added Taxes 

(VAT) and excise taxes. Indeed, income taxes 

(mainly personal and non-resource corporate) 

have stagnated over the same period, and 

trade liberalisation and regional integration in 

Africa have reduced revenue from trade 

taxes. Further trade liberalisation may leave a 

critical gap in public resources if it is not 

purposively sequenced with domestic tax 

reform. 

What can African governments do? 

In the short-run, strategies towards more 

effective, efficient, and fair taxation in Africa 

must complement efforts to deepen the 

current tax base. This does not mean trying 

hard to bring small, informal activities into 

the tax net: chasing the myriad of selfemployed 

or micro-shops would cost more 

than it it would generate in tax revenues. 

Besides, many informal entrepreneurs already 

contribute, as they pay VAT on the input they 

purchase from retailers. Neither are small and 

medium enterprises (SMEs) in the formal 

sector the target of choice to extract more 

tax revenues: too visible to escape taxation 

and not big enough to obtain exemptions, 

African SMEs—the ‘missing middle’ in most 

economies—are not only subject to some of 

the highest nominal corporate tax rates in the 

world, they too often are the victims of 

abusive practices by the tax administration. 

By contrast, focussing on the large economic 

actors that pay less tax than they should 

could generate high revenues at a small cost. 

This strengthens the classic case for reviewing 

and removing tax preferences and 

exemptions, which multinational companies 

benefit from, and in particular for taxing 

extractive industries more fairly and more 

transparently. 

In addition, governments need to crack down 

on fraud and corruption, and remove 

exemptions—sometimes as political favours— 

to powerful patrons with large, informal 

trading activities. The objective should be to 

levy taxes at low and relatively flat rates on 

bases that have been broadened through the 

elimination of exemptions and other 

loopholes. Lower, simpler taxes are not only 

easier to collect and administer but are a 

more effective policy to stimulate the 

development of the private sector. As for the 

reform of trade taxes, this should be built into 

the medium-term overall fiscal reform 

agenda, instead of coming as an 

afterthought once tariff cuts have been 

decided, as is too often the case. 

Why aren’t African governments taxing better? 

A key challenge of African tax administrations is to overcome the large capacity 

constraints that make it difficult to assess and collect taxes. Other constraints include: 

• Weak fiscal legitimacy. A general lack of trust on the part of citizens in the quality of 

public spending. 

• 

• 

Shallow tax base. Governments are unable to widen the tax base and bring informal 

actors—large and small—into the tax net. In addition, the existing tax base is 

eroded by excessive tax preferences and inefficient taxation of extractive activities. 

There are potentially large untapped tax sources, such as urban real estate and 

property taxation. 

Unbalanced tax mix. Many countries rely excessively on a narrow set of taxes to 

generate revenues for their state and some stakeholders are disproportionally 

represented in the tax base. 

Source: African Economic Outlook 2010, AfDB/OECD/UNECA.

4 

Figure 1. Public sector financial management as a share of technical cooperation to 

Africa in 2008 

2% 

98% 

Source: OECD Development Assistance Committee (DAC) Aid Statistics (2010). 

In the longer-term, the capacity constraints of 

African tax administrations must be alleviated 

to open up policy space and allow for the 

generation of tax revenues through a more 

balanced tax mix. A wide tax base is more 

stable because it relies on a diversified set of 

tax revenues. It is also more efficient by 

helping to keep the tax burden mild on each 

type of taxpayer and each type of economic 

activity. Additionally, it engages a wide range 

of stakeholders in the national political 

process. Urban property taxes, for example, 

are progressive and can scale up with Africa’s 

explosive pace of urbanisation and the 

corresponding need for urban infrastructure. 

Morocco is a good example of a 

comprehensive fiscal reform, successful in 

improving the balance in its tax mix and 

broadening the tax base, lowering the 

average tax share gradually over several years. 

As a result, new sectors were incorporated 

into the fiscal net, such as construction, 

banking and telecom services. The 

government modernised tax administration, 

enabling it to implement the planned reform. 

This resulted in a 10% increase in the share 

of direct taxation, while VAT realised its full 

potential after a wide range of exemptions 

were eliminated. 

What can the international community do? 

The international community can do more to 

support sustainable forms of development 

financing through enhanced mobilisation of 

domestic resources in African countries. Aid 

used to stimulate public resource mobilisation 

can have a ten-fold multiplier effect on a 

country’s resources. Yet, donors have in some 

cases neglected the support to tax policy and 

administration: a mere 2% of DAC-funded 

technical cooperation is spent on public 

Technical cooperation to “Public Sector Financial 

Management” In Africa 

Total technical cooperation to other sectors in 

Africa 

sector financial management, of which 

taxation systems are only a subset (Figure 1). 

Tax revenues should not be seen as an 

alternative to foreign aid, but as a 

component of government revenues that 

grows as the country develops. Greater 

ownership of the development process, one 

of the development dividends of effective tax 

systems, helps governments shape an 

environment that is more conducive to 

foreign and domestic private investment, 

sustainable use of debt and effective foreign 

aid. The challenge is therefore for African 

countries and their partners to reverse the 

vicious circle of aid dependence, which shifts 

government accountability away from citizens 

towards donors, and trigger a virtuous circle 

of aid becoming redundant by supporting 

public resource mobilisation. 

One Africa-led initiative that receives strong 

donor support is the African Tax 

Administration Forum (ATAF), a platform for 

articulating African tax priorities and building 

the institutional capacity of the continent’s 

fiscal administrations through peer learning. 

The importance of such dialogue cannot be 

understated on a continent where countries 

often compete for tax revenues and 

investment from multinationals. 

Yet the responsibility of Africa’s partners 

extends far beyond aid. More efficient and 

fairer mobilisation of domestic resources by 

African countries critically depends on 

enhanced international cooperation in tax 

matters. The fight against tax evasion and 

avoidance through tax havens, or against the 

abuse of transfer pricing (whereby 

multinational firms declare profits in low-tax 


jurdisdictions, and losses in countries where 

operations actually take place 1 ), the 

rationalisation of fiscal incentives and tax 

exemptions that are eroding African tax bases 

can only be tackled internationally. The 

interests of Africa and of richer developed or 

emerging economies can therefore converge 

on the international tax agenda, a priority of 

the G20. While significant progress has been 

made in combating bank secrecy, tax evasion 

and tax havens in recent years, the challenges 

ahead remain considerable. The European 

Commission’s Communication on Tax and 

Development issued last April therefore 

provides welcome political impetus to the 

debate, in particular by supporting “the 

adoption and implementation of the OECD 

transfer pricing guidelines in developing 

countries”, as well as “ongoing research on a 

country-by-country reporting requirement as 

part of a reporting standard for multinational 

corporations, notably in the extractive 

industry”. 

Author 

Henri-Bernard Solignac Lecomte is Head of Unit, 

Africa, Europe & Middle East, OECD Development 

Centre. Henri-Bernard.Solignac-Lecomte@oecd.org 

Notes 

1 Although models for assessing the loss of tax revenues 

to improper transfer pricing are still being developed, 

Hollingshead (2010) estimates a yearly average of USD 

3.8 billion would have been lost in Africa between 

2002 and 2006. 

Related reading 

1 African Economic Outlook 2010, by the African 

Development Bank, the OECD Development Centre 

and the United Nations Economic Commission for 

Africa.http://www.africaneconomicoutlook.org/en/ 

in-depth/ 

2 European Commission (2010) Tax and Development 

- Cooperating with Developing Countries on 

Promoting Good Governance in Tax Matters, 

Communication from the Commission to the 

European Parliament, the Council and the European 

Economic and Social Committee, COM(2010)163 

final, Brussels, 21.4.http://ec.europa.eu/development/ 

icenter/repository/COMM_COM_2010_0163_TAX_ 

DEVELOPMENT_EN.PDF 

3 Kar et Cartright-Smith, (2008) “Illicit Financial Flows 

from Developing Countries, 2002-2006”, Center for 

International Policy, Washington DC.http://www.gfip. 

org/index.php?option=com_content&task=view&id=3 

00&Itemid=75 

4 Hollingshead, A. (2010), The implied Tax Revenue Loss 

from Trade Mispricing, Center for International Policy, 

Washington DC.http://www.gfip.org/storage/gfip/ 

documents/reports/implied%20tax%20revenue%20 

loss%20report_final.pdf


Why enhance domestic resource mobilisation 

in Africa? 

Roy Culpeper and Aniket Bhushan 1 

Developing countries that have 

achieved and sustained high rates 

of growth have typically done so 

largely through the mobilisation of 

their domestic resources. Domestic 

resource mobilisation (DRM) at a 

significant level is essential to 

solidify ownership over 

development strategy and to 

strengthen the bonds of 

accountability between 

governments and their citizens. In 

effect, DRM provides “policy 

space” to developing countries 

which is often constrained under 

the terms and conditions of 

external resource providers. 

Foreign aid comes with conditionality or 

policy strings attached, not to mention 

procurement restrictions that accompany 

“tied aid”. Aid also tends to be pro-cyclical 

and volatile. 2 Foreign direct investment 

typically flows into sectors and projects 

dictated by the commercial interests of the 

foreign investors – for example, natural 

resource extraction. Moreover, governments 

that are heavily dependent on foreign aid, or 

on sharing the profits of foreign investors, 

have less incentive to raise taxes and less 

reason to pay attention to the demands of 

taxpaying citizens. 

It is in Sub-Saharan Africa (SSA) that some of 

the steepest challenges to DRM are 

encountered: savings rates are low, 

dependence on foreign aid is chronically high, 

and institutional capacity to mobilise 

domestic resources is weak. In light of these 

challenges, the North-South Institute recently 

examined possibilities for enhanced DRM in 

Sub-Saharan Africa through the lens of five 

countries: Burundi, Cameroon, Ethiopia, 

Tanzania and Uganda. 3 These five countries 

represent a breadth of circumstances in SSA: 

Burundi is a post-conflict country; Cameroon 

is experiencing declining oil revenues; 

Ethiopia is transitioning from a planned to 

market-based economy; and, Tanzania and 

Uganda both have longer records of reform 

and resources revenues (mineral and oil) that 

are expected to play an increasingly 

important role. 

Pathways to enhanced revenue mobilisation 

Most low-income countries (LIC) are heavily 

dependent on trade taxes as a source of 

revenue, in large part because they are the 

easiest taxes to collect. About a third of 

non-resource tax revenue in SSA comes from 

trade taxes; however, this figure is in decline 

(from over 6% of regional GDP in the early 

1980s to 4% by early 2000s). In keeping with 

global trends, the average tariff rate in the 

Sub-Saharan region has declined from over 

20% in the 1980s to 13% by 2005. 

The share of trade taxes in total tax revenue 

across our five case study countries has been 

declining (see Figure 1). While the overall tax 

to GDP ratio has increased (see Figure 2), it 

remains far below the Sub- Saharan average 

at around 18%. The ratio in resource-rich 

countries is substantially higher at around 

25%. Resource-related taxes are responsible 

for most of the increase in revenue 

mobilisation in the region (1980-2005). Tax 

legislation in most African countries is 

complex and the tax rules incomprehensible, 

even to well-educated taxpayers. In many tax 

codes, a large number of exemptions and 

derogations exist, representing a staggering 

opportunity cost in terms of forgone revenue. 

Exemptions complicate tax systems and open 

the door to political capture. Too often they 

are viewed as costless because opportunity 

costs are not analysed and they are offered 

on an ad-hoc basis. Once in place, 

exemptions have a ratcheting effect and are 

difficult to remove. Despite little evidence 

that exemptions drive investment decisions, 

the number of Sub-Saharan countries 

offering tax holidays, reduced corporate 

rates, and ‘free zones’ has increased 

substantially between 1980 and 2005. 

The prevalence of exemptions significantly 

undermines duty revenues. In 2006/7 in 

Tanzania, import tax exemptions amounted 

to 32% of total duty revenue. In 2006 in 

Burundi, 60% of imports were exempted 

either in part or in full from paying tax or 

duties resulting in a loss equivalent to 65.5% 

of duty revenues. In Ethiopia in 2007, 

customs exemptions amounted to 4.5% of 

GDP. 

Because trade-related taxes are such 

significant contributors to tax revenues in 

most African countries, trade liberalisation 

and tariff reduction measures to encourage 

greater economic openness should be 

gradual, paced and sequenced with other 

reforms aimed at revenue replacement. Aid 

donors should play a role to this end by 

pressing their trade negotiators to take a 

more holistic view of trade liberalisation in 

low-income countries. As it stands now, that 

is not happening frequently enough. For 

example, Cameroon’s Economic Partnership 

Agreement with the European Union will 

reduce tariff revenues by 70% or US$149 

million (equivalent to 0.8% of 2006 GDP). In 

order not to undermine the revenue base, 

tariff reduction should be sequenced with the 

mobilisation of offsetting revenues (VAT or 

income taxes). 

In general, tax systems in Sub-Saharan 

countries need to be broadened from their 

narrow base and compliance must be

6 

Figure 1 

80.00% 

70.00% 

60.00% 

50.00% 

40.00% 

30.00% 

20.00% 

10.00% 

0.00% 

Trade Taxes (% total tax revenue) 

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 

Burundi Cameroon Ethiopia Tanzania Uganda 

Source: New Revenue Database for Sub-Saharan Africa (Keen and Mansour, 2009) 

increased. Typically taxes are levied at very 

high rates on a limited number of wealthy 

taxpayers, inciting widespread tax evasion 

and fraud. Lower income tax rates on the 

wealthy, along with the gradual introduction 

of income taxes for those less wealthy, are 

more likely to increase revenue generation 

and inculcate a more healthy taxpaying 

culture in the longer run. 

Value-added or sales taxes are relatively new 

to many developing countries, and are likely 

to be broadened in their coverage and 

generate more revenue over time. However, 

there is scope to contemplate the 

introduction of yet other taxes which are 

conspicuous by their absence in developing 

countries. As countries become increasingly 

urbanized, for example, there is the 

opportunity to levy taxes on urban properties 

that are owned and/or which generate rental 

income. If property taxes were levied and 

collected, they could support urban and 

municipal authorities in providing or 

maintaining infrastructure and other services, 

including transportation. Research in Tanzania 

and other countries has repeatedly shown 

that citizens, including the poor, are willing to 

pay taxes when they see their taxes work. 

Property taxes at the municipal level can help 

engender the virtuous link between 

enhanced mobilisation and more accountable 

expenditure, vital to developing taxpayer 

culture. 

In some countries a property tax already 

exists, in principle, but it is not collected in 

reality. For example, the annual property 

assessment in Cameroon’s urban areas is 

0.1% of the value of the property, but there 

is little concerted effort from tax officials to 

collect this tax or tax on rents. Similarly, 

property taxes could be strengthened in 

Tanzania and should be introduced in 

Uganda. 

Reforming tax systems and administrations 

As mentioned, in many African countries tax 

legislation and rules are overly complex. Not 

only do they encourage evasion, but they also 

provide too much latitude for discretion and 

hence corruption on the part of tax collectors 

and taxpayers. In Uganda, for example, 43% 

of firms pay bribes to tax officers. For this 

reason alone tax systems should be simplified 

and made more transparent. 

Looking beyond simplifying and rationalizing 

tax systems, tax administration capacity and 

integrity are key to enhanced revenue 

mobilization. This means elevating the 

competency of revenue authorities and their 

officials and rooting out corruption. This is 

already recognized in the countries we 

studied. For example, in Ethiopia enhancing 

the capacity of the revenue authority is a 

central part of the public sector reform 

programme. In Cameroon, administrative 

reforms were introduced in 2004 and the 


2007 Fiscal Reform Commission made similar 

recommendations. 

However, there is a sense of déjà vu – such 

reforms have been introduced in the past and 

have yet to tackle some of the fundamental 

underlying problems. For example, in Uganda 

there has been a series of reforms from 1991- 

2007, but tax officials still have wide 

discretionary powers, sometimes abused, and 

there is widespread tax evasion. Similarly the 

Government of Tanzania has implemented 

reforms to strengthen tax administration but 

there are still extensive loopholes and 

rampant corruption. 

Africans taking ownership over DRM and 

the role of donors 

The global financial and economic crisis of 

2008-9 prompted African leaders across the 

continent to re-examine their economic 

strategies and vulnerability to external shocks. 

The crisis has eroded donors’ aid budgets as 

well as remittances from overseas migrants 

and export earnings due to the recession in 

Europe and North America. It is already 

evident that the OECD donors have fallen 

short of their aid commitments made at the 

Gleneagles G-8 Summit in 2005. Only 

U$11bn of the US$25bn in the additional aid 

promised for Africa by 2010 will materialize. 

African countries have been here before – in 

periods of prosperity, aid donors make 

promises they cannot subsequently keep, and 

rosy forecasts of expanding trade and foreign 

investment inflows are drastically revised 

downwards by recession. The current 

financial crisis has again underlined the 

vulnerability of SSA to external shocks. 

However, this time the critical importance and 

timeliness of enhancing DRM was clearly 

acknowledged by African finance ministers 

and central bank governors when they met in 

January 2009 in Pretoria. 

Subsequently, in November 2009 the African 

Tax Administration Forum was formally 

launched, bringing together 25 African 

revenue authorities with a shared conviction 

that “efficient and effective tax 

administration is key to building capable 

states.” 4 The Forum will provide peer support 

toward increasing the capacity and integrity 

of African revenue authorities.


Figure 2 

20.00 

15.00 

10.00 

5.00 

0.00 

1988 

1989 

1990 

1991 

Tax Revenue (% GCP) 

1992 

1993 

1994 

1995 

1996 

1997 

Burundi Cameroon Ethiopia Tanzania Uganda 

Source: New Revenue Database for Sub-Saharan Africa (Keen and Mansour, 2009) 

While it is appropriate for Africans to play a 

leadership role, donors can also help. To 

begin with, they can adopt more coherent 

policies toward developing countries. In 

particular their non-aid policies can be made 

more consistent with their aid policies. 

Reference was made to the need to slow 

down and sequence trade liberalisation and 

tariff reduction in African countries, 

commensurate with their ability to replace 

lost revenues in a sustainable manner. Equally, 

African countries need to review tax 

incentives offered to foreign investors in their 

attempts to create a more business-friendly 

climate. Such incentives often lead to huge 

and unnecessary tax losses. Better 

coordination of investment incentives, 

especially in the context of ongoing regional 

trade integration such as in the East African 

Community (EAC), is essential to ensure 

countries are not undermining one another. If 

donor countries had a coherent and 

supportive approach to development, their 

aid, trade and investment policies would be 

working together to help build capacity and 

the self-reliance of their developing-country 

partners. 

Donors can also support African revenue 

authorities in their attempts to build their 

capacity. To date technical cooperation to 

1998 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

‘public sector financial management’ in the 

Sub-Saharan region is only about 2% of total 

technical cooperation. In our research, we 

found no significant relationship (positive or 

negative) between aid levels and tax 

mobilisation. This suggests there is much 

room for improvement in support for 

tax-related capacity building. Donors can 

provide support in the form of both hardware 

(information-technology systems) and 

software (organisational support, skills 

training and technical assistance, and legal 

support to make legislation and tax codes 

more user-friendly and reinforce revenue 

mobilisation). More importantly, they can 

help enhance the capacity of domestic policy 

communities working on taxation. Improving 

taxpayer education is vital in creating 

informed bargaining and negotiation around 

tax issues and central to democratic 

governance. 

While they can make significant contributions 

to development, external aid or trade and 

investment opportunities alone will not be 

sufficient for Sub-Saharan Africa to achieve 

sustainable, equitable growth and poverty 

reduction. Development success depends 

primarily on the efforts of developing 

countries themselves – which ultimately 

means enhancing their ability to mobilise 

their own human and financial resources. 

Author 

Roy Culpeper is President, and Aniket Bhushan 

Researcher, at The North-South Institute in Ottawa, 

Canada. This article is based on a research project on 

Domestic Resources Mobilization in Sub-Saharan 

Africa. More information about this research is 

available at: http://www.nsi-ins.ca/english/research/ 

progress/58.asp 

Notes 

1 The authors would like to acknowledge the 

contributions of the DRM project team through the 

five country case studies: Tsegabirhan Giorgis Abay 

(Ethiopia); Astere Girukwigomba (Burundi); Sunday 

Khan (Cameroon); John Matovu (Uganda); and 

Nehemiah Osoro (Tanzania). The authors thank 

Yiagadeesen Samy for helpful comments. 

2 Aid is found to be four times as volatile as domestic 

resources, and aid volatility is greater in more aid 

dependent countries. 

3 The authors would like to acknowledge the support of 

project funders and partners: the African Development 

Bank, African Economic Research Consortium, 

Canadian International Development Agency, 

Department for International Development (UK) and 

International Development Research Centre (Canada). 

4 For more details on the ATAF launch and 

communiqués see: http://www.oecd.org/document/55 

/0,3343,en_2649_33749_44109943_1_1_1_37427,0 

0.html 

Select Bibliography 

1 Bulír, Aleš, A. Javier Hamann. Volatility of 

Development Aid: From the Frying Pan into the Fire? 

World Development, 36 (10), October 2008. 

2 Culpeper, Roy, and Aniket Bhushan. “Reorienting 

Development Finance through Enhanced Domestic 

Resource Mobilization in Developing Countries.” 

Canadian Development Report, 2009. 

3 Culpeper, Roy, and Aniket Bhushan. “ Domestic 

Resource Mobilization – A Neglected Factor in 

Development Strategy.” Project Backgrounder, April 

2008. (Online at: http://www.nsi-ins.ca/english/pdf/ 

NSI%20Background%20paper%20DRM%20SSA%20 

project%20%5B2008%20%5D.pdf ). 

4 Eifert, B. and A. Gelb, A. “Coping with Aid Volatility.” 

Finance and Development, 42 (3), 2005. 

5 Keen, Michael, and Mario Mansour. “Revenue 

Mobilization in Sub-Saharan Africa: Challenges from 

Globalization.” International Monetary Fund Working 

Paper WP/09/157, July 2009. 

6 Le, Tuan Minh, Blanca Moreno-Dodson, and Jeep 

Rojchaichaninthorn. “Expanding Taxable Capacity and 

Reaching Revenue Potential: Cross-Country Analysis 

- Policy Research Working Paper 4559.” The World 

Bank, March 2008. 

7 Moore, Mick. “How Does Taxation Affect the Quality 

of Governance?” IDS Working Paper 280, Institute of 

Development Studies, April 2007.

8 


Economic Partnership Agreements – 

How severe (and how urgent) is the fiscal challenge? 

Jean-Jacques Hallaert 

The relations between the African, 

Caribbean, Pacific (ACP) countries 

and the European Union (EU) 

are evolving dramatically with 

the phasing in of the Economic 

Partnership Agreements (EPAs). 1 

The EPAs are meant to cover a long 

list of topics but their cornerstone 

is trade relations. They replace the 

three decade-long non-reciprocal 

preferential treatment granted 

by the EU with WTO-compatible 

reciprocal preferential agreements. 

As a result, the ACP countries 

that concluded an (interim or 

comprehensive) EPA by the end of 

2007 deadline will eliminate their 

customs tariff on at least 80% of 

their imports from the EU. 2 Such a 

dramatic change triggered many 

fears, most notably related to the 

fiscal shock. 

Many studies have tried to measure the 

potential fiscal revenue losses stemming 

from the EPAs. As they were conducted 

before the EPA negotiations were 

concluded, their authors had to make 

assumptions on key parameters of the 

agreement such as the list of products that 

would not be subject to tariff cuts. Moreover 

they overlooked the transition period and 

thus could not give any indication of the 

time profile of the fiscal revenue losses—a 

crucial element for the design of the policy 

response. Against this background, it is not 

surprising that the estimated potential fiscal 

revenue losses for a given ACP country can 

vary substantially from one study to another. 

Therefore, there is a great interest at 

estimating the potential fiscal revenue losses 

using the tariff cuts actually agreed. This 

analysis is limited to six sub-Saharan African 

countries: Burundi, Côte d’Ivoire, Ghana, 

Madagascar, Rwanda, and Tanzania. 

Direct fiscal revenue losses varies 

substantially across countries 

The fiscal impact of the EPAs varies across 

countries. The revenues from customs 

duties could be lower, at the end of the 

transition period, by about 8% in Rwanda 

and Tanzania, 16% in Burundi, 21% in 

Madagascar and up to 28% in Ghana. The 

severity of the fiscal shock from these losses 

depends on the importance that customs 

duties have for government revenue. The 

fiscal challenge of the EPA is likely to be 

large for Madagascar where taxes on 

international trade account for half the 

government’s revenue. It is likely to be 

more limited for Tanzania where taxes on 

international trade account for only 10% of 

the government’s revenue. 

Estimating the potential fiscal loss on the 

basis of the customs duties revenue is 

common in the literature. However, this 

method tends to underestimate the actual 

fiscal shock as it ignores the spillover of the 

customs tariff cuts on revenues from other 

taxes. Customs duties are usually part of 

the tax base for excise and value-added tax 

(VAT) levied on imported goods. Therefore, 

a tariff cut also reduces these revenues. 

Another shortfall of this method is that 

it ignores the fact that the ACP countries 

provide tariff preferences to partners in 

preferential trade agreements, to foreign 

investors, and to enterprises located in 

Special Economic Zones. 

Thus, a more accurate estimate of the fiscal 

revenue losses should consider taxable 

imports rather than total imports. This 

requires detailed trade data that were only 

available for Madagascar. Using taxable 

imports, the potential loss in customs duties 

revenues is revised from 21% to 30%. 

Taking into account the spillover of tariff 

cuts to other taxes suggests that the total 

revenues of the Malagasy government could 

drop by 5% at the end of the transition 

period. This loss could have substantial 

repercussions because Madagascar 

suffers from one of the lowest revenue 

performance in the world (the tax to GDP 

ratio is only 10%). 3 

Trade diversion as an indirect source of 

revenue loss 

Although more accurate, this revised 

estimate of the impact of the EPA on 

Madagascar fiscal revenue still understates 

the magnitude of the fiscal shock because it 

ignores the fiscal loss from trade diversion. 

Eliminating customs duties on EU goods 

rather than on all imports will encourage 

consumers (households as well as firms


that use imports as an input) to shift 

their purchase from non-EU imports to 

EU imports. Indeed, because of the tariff 

preference, some of the tariff-free EU goods 

will appear of better value than the tariffinclusive 

goods imported from the rest of 

the world. In other words, the EPA will give 

EU goods a price advantage over non-EU 

goods and as a result duty-free EU goods 

will replace other taxed imports, leading 

to an additional revenue loss for the ACP 

governments. 

Estimating the magnitude of this secondround 

revenue loss is difficult as it depends 

on many factors such as the willingness 

of ACP consumers to shift their source of 

imports, the capacity of EU firms to supply 

the additional demand, the reaction of the 

traditional suppliers (they may choose to cut 

their prices to remain competitive), and the 

strategic behaviour of EU exporters (some 

may pass the tariff cut to their customers 

while others may choose to keep their retail 

price unchanged and increase their profits). 

One thing is sure though: the bigger the 

gap between the most-favored-nation (MFN) 

tariff and the final tariff levied on EU goods, 

the larger the trade diversion and thus the 

fiscal revenue loss. In many ACP countries 

this gap will be large because, despite recent 

trade liberalisation, MFN tariffs remain high 

in ACP countries. In all the Sub-Saharan 

Africa countries considered in this article 

they are above 12% on average. 

Rather than estimating the fiscal impact 

of trade diversion—an exercise that would 

be driven by the assumptions regarding 

the various actors’ behaviour—it is better 

to assess the potential scope for trade 

diversion. Again the choice of excluded 

products largely determines the impact. 

In the case of Madagascar, 13% of the 

tariff lines are excluded from tariff cuts. 

These lines account for 38% of total 

taxable imports. Thus trade diversion could 

potentially affect 62% of the countries 

taxable imports. However, the actual trade 

diversion is more limited as for many lines 

the EU and other countries benefit (because 

of preferential trade agreements) from a 

duty-free access accounts for all imports. 

Taking this fact into account, trade diversion 

could affect 49% of Madagascar’s taxable 

imports. This is substantial, although it is 

impossible to predict ex ante the size of the 

trade diversion on these imports. 

The fiscal impact is in most cases 

substantially delayed 

The estimates presented so far focused on 

the total losses, i.e. when all tariff cuts are 

implemented. However, the shock will be 

progressive: tariff cuts will be phased in over 

a long transition period ranging from 10 

years for most Southern African ACPs to 26 

years for the members of the Eastern African 

Community (EAC) and of the Caribbean. 

Moreover there will be no fiscal shock in the 

short run for two reasons: 

• 

• 

First, for most ACP countries, there 

will be no tariff cuts before several 

years. Tariff cuts will only start in 2013 

for Ghana and Madagascar and 2015 

for the EAC counties. However, Côte 

d’Ivoire agreed starting eliminating 

some of its tariff as early as 2009 

(though it has not done so yet). 

Second, the African ACP countries 

considered in this article have chosen to 

start eliminating the tariff starting with 

the lowest tariff rates (Côte d’Ivoire is 

again an exception). 

This liberalization pattern limits the risk 

of trade distortion in the short run and 

smoothes the adjustment shock (including 

the fiscal adjustment cost). 

Conclusion: How to cope with the fiscal 

challenge 

The estimates presented in this article show 

that the fiscal impact of the EPAs differs 

significantly across countries but can be 

substantial especially when the potential 

impact of trade diversion is taken into 

account. However, long transition periods 

mean that in most cases the fiscal shock will 

be delayed and progressive. 

There is therefore ample time to implement 

policies and reforms that will help address 

the fiscal shock of the EPAs. ACP countries 

should take the opportunity of the transition 

period to cut their MFN tariffs. This would 

reduce the welfare cost of trade diversion 

and simplify the often complex customs 

regime. The additional revenue losses 

could be offset by a rebalancing of the tax 

regime from taxes on international trade to 

domestic taxes. Past experience shows that 

such reform is unlikely to allow governments 

to fully recoup the revenue losses from 

tariff cuts under the EPAs but has value on 

its own as domestic taxes are less distortive 

than taxes on international trade. Moreover, 

this reform appears to be important to 

secure some EU budget support. Indeed, 

in its 2007 Aid for Trade Strategy, the EU 

has committed itself to “contribute to the 

absorption of net fiscal impact resulting 

from tariff liberalization in the context of 

EPAs in full complementarity with fiscal 

reforms.” 4 

Author 

Jean-Jacques Hallaert is associated with the Groupe 

d’Économie Mondiale de Sciences-Po (GEM). The 

article summarises the main findings of the research 

project “Economic Partnership Agreements: Tariff 

Cuts, Revenue Losses and Trade diversion in 

sub-Saharan Africa” published in the “Journal of 

World Trade” in February 2010 (vol. 44, no. 1, pp. 

223-250). The full article is available at: 

http://www.kluwerlawonline.com/toc.php?area=Journ 

als&mode=bypub&level=6&values=Journals%7E%7EJ 

ournal+of+World+Trade%7EVolume+44+%282010% 

29%7EIssue+1. 

Notes 

1 Thirty five of the seventy five ACPs have initialled an 

interim agreement that include a schedule of the tariff 

cuts that these countries will implement. Only the 

Caribbean countries have reached an agreement on 

the full list of topics of the EPAs. As of mid-2009, the 

Dominican Republic was the only country to have 

ratified its EPA. 

2 This share can go as high as 97.5% in the case 

of Seychelles 

3 However, the domestic tax reform implemented in 

2008, following an IMF technical assistance, may help 

alleviate the fiscal shock of the EPAs by reducing the 

reliance on taxes on international trade. 

4 The “EU Strategy on Aid for Trade: enhancing EU 

support for trade related needs in developing 

countries” is available at: http://register.consilium. 

europa.eu/pdf/en/07/st14/st14470.en07.pdf

10 

The debate around the impact of EPA tariff 

liberalisation on government revenues 

in ACP countries has been particularly 

controversial throughout the negotiations. 

A great deal of the opposition to EPAs 

has focused on the argument that the 

agreements are likely to have serious effects 

on government revenues, and therefore 

on social expenditures geared towards 

the achievement of broader development 

objectives, such as the Millennium 

Development Goals. The financial and 

economic crisis, combined with recurrent 

food and energy crises, has only heightened 

these concerns. Attempting to quantify the 

fiscal impacts of EPAs has therefore been an 

important, yet sometimes difficult, exercise. 

In terms of reaching a comprehensive 

assessment of the fiscal impacts of EPAs, the 

picture remains relatively unclear despite a 

growing number of regional and countrylevel 

studies on the subject. Differences in 

methodology, data and assumptions have 

contributed to a mixed picture, although 

it is also important to acknowledge that 

comparison and debate between various 

studies is healthy, and no forecast is likely 

to be definitively accurate in light of the 

uncertainties involved in making them. One 

overall conclusion, however, is that there has 

been a general tendency to overestimate 

the direct fiscal losses resulting from an 

EPA, at least in some of the earlier studies 

as compared to more recent analysis. 

Nonetheless, the implementation of an EPA 

can have significant, and in some countries 

very serious, consequences for government 

revenues. 

Beyond efforts of researchers to quantify 

the tariff revenue losses that might result 

from EPAs, surprisingly little discussion has 

taken place thus far on the more practical 

and policy-related questions of how to 

address the fiscal impact of the agreements. 

While giving estimates of the impact that 

liberalisation will have on revenues, most 

studies do not delve deeper into implications 

of this work, and ask how trade taxes might 

be replaced as implementation proceeds. For 

some countries, replacing remaining trade 

taxes might become a pressing concern 

in the next few years, especially given the 

substantial liberalisation that has already 

taken place over the last few decades. 


Addressing the fiscal challenges of an EPA: Some 

preliminary considerations 

ECDPM 1 

The case of Tanzania 

With regard to fiscal losses as a result of implementing EPAs, Tanzanian officials familiar 

with the negotiations emphasise the significant proportion of revenue that continues 

to be derived from taxes of all kinds (i.e. not just customs duties) on imported goods: 

currently some 43% of total revenues originate from imported goods. Not all of this 

revenue is under threat however, since much of the tax collected comes from taxes 

other than import duties, such as VAT and excise taxes also levied on imported goods, 

which are not affected by EPA liberalisation requirements, at least directly. Furthermore, 

flexibility in the EPA liberalisation schedule means that some goods are excluded from 

liberalisation – in Tanzania’s case, these amount to around 17% of imports, including 

some ‘big ticket’ revenue-generating products on which import duty will continue to be 

applied. 

Conversely, it is important to understand that the elimination of duties will not just lead 

to lower customs revenue itself, but also reduce the basis for calculations of other ad 

valorem taxes, most notably VAT, which are generally levied after duties have already 

been applied. In addition, the issue of VAT has in recent years been a sensitive item on 

the reform agenda in Tanzania, with a reduction in the rate from 20% to 18% to bring 

it closer into line with regional EAC partners, further reducing fiscal revenues. 

More generally, many Tanzanians fear the potentially adverse effects that trade 

liberalisation may have on the economy and tax base as a whole. They are worried that 

increased competition with EU suppliers may result in the collapse of some domestic 

industries, including some major tax-paying firms, leading to declining levels of 

corporate income tax collections, as well as lower collection of personal income taxes as 

a result of reduced levels of employment. 

In terms of the policy responses that will be 

needed, these are likely to be fairly context 

specific, depending naturally on the scale 

of expected losses but also on a range of 

other factors, such as the existing tax mix, 

the strength of the economy and breadth 

of the tax base, tax-raising capacity (in 

terms of the ease of implementing new 

taxes or strengthening the collection of 

others), or even whether there is scope 

for current spending levels to be reduced 

as government services are delivered 

more efficiently. The debate should thus 

shift away both from theory and rhetoric, 

towards more concrete actions to address 

the potential revenue shortfalls, with a role 

for all stakeholders, including governments, 

the private sector, researchers and donors. 

What strategies can ACP countries and their 

partners adopt to mitigate the negative 

consequences of liberalisation and take 

advantage of opportunities for wider reform 

or consolidation in the area of taxation? 

Below are some preliminary considerations, 

with illustrations from Tanzania and 

Mozambique that highlight the differences 

and similarities at the country level between 

different ACP countries on the revenue 

consequences of EPAs. 

The reform context: varying expectations 

and perceptions 

Given that the various models of EPA 

revenue losses lack perfect foresight and 

can offer only tentative indications on what 

to expect, it is perhaps unsurprising that 

opinions amongst officials on the issue 

also tend to differ amongst and within 

ACP countries. In some parts, the views of 

officials and stakeholders at the country 

level often continue to reflect long-held 

positions on the consequences of EPAs more 

generally, with ‘EPA sceptics’ highlighting 

the potential negative effects of EPAs on 

revenues and competitiveness. In contrast, 

‘EPA supporters’ put greater emphasis on 

the dynamic opportunities and gradual 

transition process. Underpinning such views, 

however, is the fact that the context of 

reform is very different in ACP countries, 

depending on factors like the initial baseline 

position, ongoing dynamics of regional 

integration, and the available options for 

reform.


The reform context in Mozambique 

In contrast to their counterparts from Tanzania, officials from Mozambique who have 

followed EPAs tend to view the revenue consequences of the agreements for their 

country as being relatively limited, for a number of reasons that illustrate the diversity 

of countries’ experiences. In the first instance, Mozambique’s officials point to their 

lower reliance on tariff revenue over recent years – and the fact that regardless of the 

controversies surrounding an EPA more generally, the agreement fits well within the 

pursuit of economic reforms, including trade and tariff liberalisation and tax reform, 

resulting in a lower reliance on customs duties and a more open and liberalised 

economy, which is a key element of the government’s development policy. 

Secondly, officials point out that regional integration, principally in the SADC context, 

will have an important influence on customs duty revenues in coming years, in 

many ways regardless of EPA liberalisation. SADC (and mainly South Africa) is now 

Mozambique’s foremost trading partner, with around 40% of imports coming from the 

region – by contrast imports from the EU represented 12% of total imports in 2007, 

falling from 15% in 2005. 

Finally, Mozambique officials point out that many of the goods actually being 

liberalised under the EPAs – such as capital goods or intermediate inputs – typically 

enter Mozambique under special duty exemptions given to large investment or aid 

projects. One consequence of this is that while some theoretical models might point 

to Mozambique losing fairly significant amounts of revenue based on assumptions 

about how much customs duty is collected, and on data that does not reflect recent 

shifts in the structure of trade – in reality the losses could likely to be less severe. Even 

where liberalisation of such goods does result in revenue losses, officials point out that 

at the same time the reductions in prices are more likely to encourage development 

rather than create negative competition, in line again with Mozambique’s general 

development strategy. 

From a political point of view, the difficulty 

for hesitant governments facing the 

prospect of trade liberalisation is that the 

potential for revenue losses are immediately 

apparent, while the benefits will only be 

seen over time. While the dynamic effects 

of an EPA are unpredictable, opponents to 

an EPA can easily highlight the potential 

revenue losses through simple calculations 

of forgone import duties. Combined with 

parallel trade liberalisation processes at the 

regional level and global crises (economic, 

food, energy, etc.), some political leaders 

might be reluctant to engage in a far 

reaching agreement with the EU whose 

benefits are uncertain. 

One potential first step in such cases would 

be to conduct more in-depth assessments of 

the impacts of EPAs – at the country level, 

perhaps jointly commissioned – with a focus 

not on specific estimates, but rather on the 

robustness or fragility of countries’ revenue 

base, or the overall economic costs and 

benefits. 

Strategies to address fiscal losses related 

to EPA implementation 

Solutions that have so far been identified for 

dealing with the revenue consequences of 

EPAs include those that have been proposed 

in the context of negotiations – seeking to 

establish close links between liberalisation 

commitments and some compensatory 

financial assistance combined with support 

to fiscal reforms, as part of Aid for Trade. 

Beyond this, an emphasis should also be put 

on more general reform measures aimed at 

increasing the tax-raising capacity of ACP 

countries, which are further removed from 

the specific issue of EPAs and form part of a 

broader fiscal reform and domestic resource 

mobilisation agenda. Measures here can 

range from building the administrative 

capacity of tax administrations to target 

specific groups of taxpayers, to tackling 

international tax issues – such as tax evasion 

by multinational actors and (illegal) capital 

flight – at a bilateral or global level. Different 

approaches are often complementary, and 

include: 

• 

• 

• 

Financing mechanisms for ‘direct 

compensation’ of EPA net fiscal 

losses: here it is interesting to note 

some precedents where the EC has 

undertaken to provide direct support 

to provide partial compensation for 

fiscal losses due to trade liberalisation, 

either in the context of EPAs – as in 

West Africa2 , or in the context of 

regional trade liberalisation – as in East 

Africa through the Regional Integration 

Support Mechanism (RISM) programme. 

EPA ‘accompanying measures’ leading 

to higher tax collection through 

economic growth: Aid for trade for EPA 

implementations and adjustments will 

be key to allow ACP economies to reap 

the potential benefits of an EPA, which 

in turn would lead to higher economic 

growth and associated tax collections. 

Wider tax reform to broaden the 

tax base and increase compliance: 

EPAs need also to act as a catalyst 

for or build on wider reforms in ACP 

countries, including on fiscal reforms, 

in particular as part of a strong 

emerging agenda on domestic resource 

mobilisation in ACP countries. 3 

Going forward, one key challenge will 

be the need for political leadership and 

commitment to address EPA-related fiscal 

adjustments and broader fiscal reforms, 

as an integral part of a domestic resources 

mobilisation agenda, with appropriate 

development and technical support. 

Notes 

1 This article draws on some initial analysis conducted by 

ECDPM for a project funded by IrishAid on the fiscal 

adjustments resulting from EPAs. The final study, 

written by San Bilal, Dan Lui and Melissa Dalleau, will 

be published in the coming weeks. Comments and 

suggestions are welcome; contact: San Bilal: sb@ 

ecdpm.org 

2 See the article by David Laborde in this issue. 

3 See the article by Henri-Bernard Solignac-Lecomte in 

this issue.

12 

Fiscal impact of the Economic Partnership 

Agreement (EPA) in West Africa 

David Laborde 

Will trade liberalisation bear an 

adjustment cost for ACP countries? 

If so, how much and who will pay 

for it? What are the strategies 

for reducing or even eliminating 

these costs? These are all sensitive 

questions facing ACP and European 

negotiators in the context of the 

negotiations of the Economic 

Partnership Agreements (EPAs). 

Qualitatively and quantitatively defining 

the “net fiscal impact” of an EPA: a 

complex undertaking 

In West Africa - one of the most important 

regions in demographic and economic 

terms among the ACP - European and 

African negotiators decided to inform their 

discussions with a regional Computable 

General Equilibrium model led by a 

joint committee. Indeed, answering the 

above questions required a common 

tool to quantify certain key issues in the 

negotiations, especially the notion of net 

fiscal impact. The loss of customs revenues 

has been a major concern for West Africa’s 

governments, which face tense budgetary 

situations and economies with an extensive 

informal sector, presenting a challenge for 

replacing border taxes with a domestic 

tax system. The EU committed itself to 

accompany and support the ACP partners 

during the liberalisation phase in order 

to protect against the negative effects 

resulting from trade reform, which is why 

it is necessary to assess and determine the 

forms of this support. Nonetheless, three 

important points must be borne in mind. 

First, this is an unprecedented commitment. 

While the EU has negotiated numerous free 

trade agreements, until the EPAs it has not 

committed to pay the adjustment costs of 

its partners. 1 Second, the very concept of 

“net fiscal impact” is new, and must be 

defined before any quantification can be 

undertaken. Finally, one should note the 

originality of the approach, which revolves 

around the notion of partnership between 

the EU and ECOWAS, as the parameters 

and hypotheses of the model have been 

determined jointly by the two parties, in 

order to avoid politicising the exercise. 

Trade liberalisation and its fiscal effects 

The fiscal effects of trade liberalisation are 

numerous. First, the abolition of customs 

duties leads to a loss of the custom revenues 

derived from European imports. Moreover, 

the replacement of imports coming from 

non-EU countries (e.g. the United States) 

subject to multilateral customs duty by 

non-taxed European products will lead to 

additional revenue losses. At the analytical 

level, it is important to make a distinction 

between theoretical revenues (nominal 

rate multiplied by the value of imports) 

and the level of tax actually collected. The 

latter is sometimes significantly lower (less 

than 60% for some countries), because 

of tax avoidance, corruption or legal tax 

exemptions (i.e., sector-based initiatives, 

tariff suspension, imports by government or 

international agencies). Moreover, customs 

duties are not the only type of tax levied 

at the border: excise duties or value-added 

tax (VAT), for example, are also applied 

on imports. If those taxes are not directly 

affected by liberalisation, their tax base is. 

For instance, the volume of (and therefore 

revenue from) imports will increase, but 

the value of imports, including the value 

of custom tariffs, which is the basis of 

calculation for the VAT, can be reduced. In 

the case of a perfect substitution of taxed 

local products by imported products, the 

net impact will be negative. However, if 

the imports replace the production of the 

informal sector, which previously evaded the 

tax system, the impact will be positive. The 

combination of the different mechanisms 

will therefore depend on the consumers’ 

sensitivity to prices and on the efficiency of 

the initial tax collection. 2 By changing the 

growth path at the macroeconomic level, 

liberalisation will also have an impact on 

income derived from VAT. 


Indirect taxation is not the only channel to 

be considered. Income tax – both corporate 

and individual – will also be modified by 

changes in the levels of profit, wages 

and employment. Moreover, changes in 

profitability will also affect public – or quasipublic 

– companies and have consequences 

on the consolidated budget of public 

authorities. 

Adoption of a Computable General 

Equilibrium Model 

To be able to take all these effects into 

account, particularly within the scope of 

commercial liberalisation spread over 15 to 

20 years, requires a model as comprehensive 

as possible. In this respect the regional 

Computable General Equilibrium model 

seems to be the best choice: it can 

determine the “net” impact on the 

government’s total tax income, considering 

all the effects previously discussed. 

This definition of the “net” fiscal impact can 

seem incomplete, however, because it does 

not address the level of public spending 

that will also react to trade liberalisation. 

Nevertheless, the spending aspect entails 

difficult questions. For example, how will 

spending on social services and public 

investments be affected? For this reason, we 

have decided to focus on the “revenue” side 

of the equation. 

Definition of the analytical framework 

Once the net fiscal impact has been 

defined, an important question remains: 

what should be the point of comparison? 

At the beginning of the EPA negotiations, 

the African negotiators insisted that the 

old Cotonou preferences should to be 

used as the reference point (i.e., the cost 

or benefit of the EPA should be compared


to the “current” situation). On the other 

hand, European negotiators insisted on the 

fact that the reference point should be the 

Generalized System of Preferences (GSP), 

since after 2007 the unilateral preferences 

could not exist anymore and this alternative 

was thus irrelevant. 

The second option obviously leads to a 

more optimistic assessment of the EPA. 

Since 2008, the European position is de 

facto the most relevant, even if some 

observers think that it does not follow the 

initial commitment’s spirit. Yet this does 

not necessarily mean that the debate on 

this question is closed. In fact, we now 

need to know if the actual base for the 

negotiation of a regional EPA should be 

the GSP applied to exports to the EU, 

while also maintaining the actual pricing 

structures of Western African countries, 

or if the temporary agreements signed, 

and the associated concessions, must be 

used as a reference for Ghana and the 

Ivory Coast. In the latter case, the regional 

EPA usually results in a reduction of the 

liberalisation granted at a bilateral level and 

thus in a fiscal gain. Finally, the question of 

ECOWAS’ common external tariff arises: 

fixed at an intermediate level between 

the UEMOA (West African Economic and 

Monetary Union) level and the Nigerian 

level, for example, it would increase the 

tax loss of French-speaking countries and 

reduce that of Nigeria. We also have to keep 

in mind that the tax impacts will depend 

on the degree and the sequencing of the 

liberalisation. Greater market opening will 

result in higher losses from foregone custom 

duties. The very composition of the list of 

sensitive products plays an important part, 

and also presents a difficult choice for the 

African negotiators: should they protect 

the products that generate tax revenue or 

products considered critical to the rural or 

industrial development? 

Preliminary results: a mixed picture 

Since the negotiation process is not over yet, 

it would be a premature to present specific 

numbers on the fiscal impact of the EU-West 

Africa EPA. However, basing our judgment 

on the existing outlines of the agreement, 

we can give a couple of rough estimates. 

Overall, customs revenues should be 

reduced by 30% at the most 3 for the whole 

ECOWAS, and between 20% and 40% for 

the different countries, which represents 

10% of total indirect tax revenue. Therefore, 

the impacts are not the disaster claimed 

by some, but at the same time cannot be 

ignored. The distribution of these losses is 

an important issue and Nigeria itself would 

represent a third of this amount. 

Tackling the challenge: possible 

strategies 

The evaluation of the net fiscal impact is 

just one step of the negotiation process. It 

is also advisable to consider solutions to the 

problem. First, one could consider the option 

of “fiscal neutralisation” through a transfer 

from the EU under the form of budget 

support. In this respect, it is important to 

note that the amounts to be invested are 

less important than the net fiscal impact 

previously assessed. In fact, if the transfer 

programme is implemented at the same 

time as liberalisation is undertaken, public 

spending will not have to decrease and 

economic growth will not slow down (which 

generated additional losses). Secondly, 

national fiscal policy can be reformed and 

adapted. For example, some customs duties 

can be replaced by excise duties, the VAT 

can be increased or direct taxes modified to 

get back a part of the lost customs taxes. 

Indeed, the suppression of customs duty 

results in a decrease in domestic prices of 

imported goods, which benefits consumers 

and firms but triggers a loss for the state. 

In response, governments can maintain 

tax pressure and in doing so, retrieve the 

amounts earned by other economic agents. 

If this strategy is the most logical in the 

long term, it is also difficult to implement 

in countries that have set up numerous 

tax reforms and are confronted by a large 

informal sector that escapes official taxation. 

Any increase of the tax rate would then 

only encourage a switch to the informal 

sector, worsening the situation even more. 

Thirdly, the development policy associated 

with the EPAs, the PAPED (EPA Development 

Program 4 ), could sufficiently reinforce 

economic growth and generate additional 

tax income that will cover the direct losses 

due to trade liberalisation. This scenario is 

more optimistic, but its success will depend 

on the exact characteristics of the PAPED. 

Conclusion 

Western Africa offers a very relevant 

example of the use of economic models 

in free trade negotiations. Even when 

incomplete, these tools can help quantify 

some of the questions that are of critical 

interest to political decision-makers and help 

clarify the consequences of various options. 

Well used, they offer a coherent framework 

for the negotiating parties, which force 

participants to explain their offers and 

expectations. In the context of estimating 

the fiscal impact of the EPAs, the selected 

approach allows the parties to tackle the 

problem head-on and to immediately define 

a tailored and negotiated strategy, instead 

of denying the reality or allowing utopian 

fantasies obscure the debate. 

Author 

David Laborde is an economist at the International 

Food Policy Reseach Institute (IFPRI – Washington DC) 

and has collaborated with the ECOWAS-EC Regional 

Preparatory Task Force in the context of ECOWAS EPA 

negotiations since 2007. 

Notes 

1 It is necessary to note, however, that in the past, the 

EU did help West African countries to deal with the 

revenue loss related to their own regional intégration. 

2 It is important to keep in mind that in certain cases, 

the efficiency of this collection can be endogenous to 

the deregulation process, if the latter comes with a tax 

reform or investments in customs administration, etc. 

3 We take the upper bound of the opening rate, with 

an 80% threshold. 

4 See on this subject our issue of Trade Negotiations 

Insights dedicated to the PAPED/EPAD : Trade 

Negotiations Insights, Vol9, No5, June 2010. See also : 

ECDPM. 2010. The EU Commitment to Deliver Aid for 

Trade in West Africa and Support the EPA 

Development Programme (PAPED). (ECDPM Discussion 

Paper 96). Maastricht: ECDPM

14 

Mapping donors’ involvement in the area of 

taxation and development: The case for better 

coordination and division of labour 

International Tax Compact Secretariat 

Strengthening tax systems and supporting 

developing countries’ efforts to increase 

domestic revenue is receiving growing 

attention within development cooperation. 

The declarations of Monterrey (2002) 

and Doha (2008) have emphasised 

the importance of domestic resource 

mobilisation for sustainable development. 

Numerous international and national 

initiatives and platforms have also 

emerged in recent years, underlying the 

importance of the topic (e.g. EITI, Tax Justice 

Network, International Tax Dialogue, S4TP, 

International Tax Compact, Task Force of 

OECD/DAC on Taxation and Development, 

etc.). The African Development Bank has 

dedicated its African Economic Outlook 

2010 to the topic of “Public resource 

mobilization and aid in Africa ”. 1 And 

most recently the EU Council adopted a 

communication on “Tax and Development 

- Cooperating with Developing Countries 

on Promoting Good Governance in Tax 

Matters”, which was elaborated by the 

European Commission under the Spanish 

Presidency. 2 

Thus, the importance of efficient systems of 

taxation and domestic revenue mobilisation 

in developing countries is increasingly 

recognised. To ensure that efforts aimed 

at improving cooperation, collaboration 

and alignment in the area of taxation are 

well targeted, it is first and foremost critical 

to survey what is being done, where and 

how. A mapping of world-wide activities 

in the area of taxation and development 

reveals that quite a number of actors are 

already working on these issues. Although 

each of these actors has different priorities 

and modalities of work, geographic and 

thematic overlaps are frequent. 

Much engagement in taxation, but also 

regional overlap 

Indeed, a country-specific mapping exercise 

conducted within the framework of the 

International Tax Compact (ITC), and as 

part of a broader mapping survey, indicates 

generally good worldwide coverage of 

tax-related assistance projects by donors. 

However, these activities are at times very 

intense, with many donors working on 

tax issues in the same country, while other 

countries are not supported at all. Asia and 

Central and South America seem to be 

quite well covered by donor engagement, 

for example, while coverage of the African 

continent seems to be slightly less extensive. 

This is alarming as the tax revenue to GDP 

ratio is especially low in Africa, indicating 

weak revenue raising capacities and, 

consequently, the necessity for intensive and 

long-lasting assistance. The initial impression 

that the regional coverage of support in 

Africa is not yet sufficient is confirmed when 

only long-term projects, lasting for at least 

several months, are taken into account and 

mission-based cooperation of IMF Regional 

Technical Assistance Centers (RTACs) is left 

aside. While there is intensive donor activity 

in many parts of Africa, 17 out of 53 African 

countries - a third of the entire continent - 

still do not receive long-lasting tax-related 

assistance. 

The International Tax Compact (ITC) 

As an informal platform of donor 

and partner countries and in close 

communication with NGOs and the 

private sector, the ITC brings together 

the relevant actors in the area of taxation 

and development in order to strengthen 

revenue raising capacities. Launched by 

the German Federal Ministry for Economic 

Cooperation and Development 

(BMZ), the ITC aims to promote tax 

systems that allow partner countries to 

be more effective in fighting tax evasion 

and inappropriate tax practices with 

the intention to achieve national and 

international development goals. BMZ 

has commissioned GTZ and KfW to 

support the initiative’s implementation. 

The secretariat is based in Bonn. 

Issues broadly treated but weak division 

of labor 

On the other hand, the topical-mapping 

conducted as part of the same survey and 

covering thematic characteristics of the 

organisation’s work related to taxation show 

that tax-related activities cover a broad 

range of issues, including domestic and 

international taxation, areas of expertise 

(tax systems reforms, tax administration 


and organisation reform, tax laws, etc) 

and country groups (developing countries, 

emerging market economies, transition 

countries). Yet activities are often carried 

out by all organisations with only slight 

concentration on specific issues. Thus, the 

division of labor between the different 

actors is here again rather weak. 

Enhancing international cooperation 

As a result, the findings of both the regionspecific 

and the topical mapping indicate 

a high potential of duplication of work, 

including projects of multiple donors in a 

specific country, as well as identical working 

areas with regards to the content of the 

programmes undertaken. Although it is not 

clear whether duplications actually occur, 

it is obvious that organisations need to 

increase the level of information sharing 

to guarantee that assistance is indeed 

complementary and aligned. Moreover, 

an improved division of labour would 

encourage in-depth expertise - both with 

respect to the regional or country-specific 

background as well as in terms of technical 

knowledge. Also, a more focused approach 

and division of labour would unleash forces 

in areas and regions not well covered so far. 

Author 

International Tax Compact Secretariat. This article is 

based on the Maping Survey on Taxation and 

Development by Daniel Köhnen, Thorben, Kundt and 

Christiane Schuppert, realized by ITC and super-vised 

by the Deutsche Gesellschaft fur Technische 

Zusammenarbeit (GTZ) on behalf of the Federal 

Min-istry for Economic Cooperation and Development 

(BMZ). Further information on the ITC can be obtained 

at: www.taxcompact.net 

Notes 

1 See Henri-Bernard Solignac Lecompte, “Taxation for 

Development in Africa: A Shared Responsibility”, 

pages 3-4 of this issue. 

2 This Communication is available at; http://ec.europa. 

eu/development/icenter/repository/COMM_ 

COM_2010_0163_TAX_DEVELOPMENT_EN.PDF


WTO 

Roundup 

Brazil, US strike framework deal in 

cotton dispute 

Trade officials from Brazil and the United 

States reached a place-holder accord in June 

that delays until 2012 the imposition of 

trade sanctions in a protracted dispute over 

Washington’s cotton subsidies. 

The ‘framework’ deal that was announced 

on Friday outlines a new set of negotiations 

and consultations that will take place over 

the next two years as US lawmakers revise 

the Farm Bill, the omnibus legislation that 

governs the form and value of subsidies 

for US farmers, which will expire on 30 

September 2012. 

The framework agreement obligates the US 

to fork over US$147.3 million per year in 

the form of a “technical assistance fund” 

to help Brazilian farmers. Washington 

officials have also agreed to work toward 

benchmarks for specific changes to its 

controversial GSM-102 programme and to 

establish “a limit on trade-distorting cotton 

subsidies,” according to a statement from 

the Office of the US Trade Representative. 

Officials from both sides will meet four times 

a year as the next Farm Bill takes shape. 

“This is not a final solution, but it lays out 

elements that will allow for consultations 

and reforms to the Farm Bill that will take 

place by the end of 2012,” said Roberto 

Azevedo, Brazil’s ambassador to the WTO, 

according to a report in The Financial 

Times. “Brazil doesn’t rule out taking 

countermeasures at any moment.” 

The United States’ cotton subsidies have 

long been a sticking point in the Doha 

Round of world trade talks at the WTO. A 

number of developing countries, including 

Brazil, have urged the US to reform the 

support it offers its cotton farmers, but US 

officials have so far failed to indicate what 

changes they might be willing to adopt. 

Washington’s failure to overhaul its cotton 

programme has had important implications 

for cotton farmers in Brazil and other 

developing countries, according to a recent 

study conducted by Mario Jales, a graduate 

resident fellow at Cornell University. 1 

The analysis found that world cotton prices 

would have jumped by 6% if the US had 

agreed to make cuts outlined in proposals 

that African nations have put forward in 

the Doha talks. Such an increase could have 

brought significant gains to cotton farmers 

in the developing world. 

A number of developing 

countries, including Brazil, 

have urged the US to 

reform the support it 

offers its cotton farmers, 

but US officials have so 

far failed indicate what 

changes they might be 

willing to adopt. 

WTO officials frustrated over lack of 

momentum on Doha 

WTO Director-General Pascal Lamy 

attempted to inject a positive tone into 

a meeting of the Trade Negotiations 

Committee on 11 June, which saw 

delegations express their frustration at 

the Doha Round’s slow progress. While 

members all reaffirmed their commitment to 

the prompt conclusion of the Round, many 

were concerned about political tensions 

among delegations that seem to be holding 

the talks back. 

Lamy reminded the delegations of the 

Round’s potential benefits, referring to it as 

a “stimulus package that has a sustainable 

and lasting impact” and calling trade “an 

engine to generate growth and contribute 

towards the recovery.” 

Along with calling up members to avoid 

falling into complacency, Lamy also spoke 

about the need to pursue a “cocktail” 

approach to negotiations, an approach 

that he first referred to in his report to the 

General Council in May of this year. 

The cocktail approach, according to Lamy’s 

earlier report, includes the following 

three ingredients: meetings organised 

by negotiating group chairs, preliminary 

contacts between trade ministers, and 

Lamy’s own consultations with delegations. 

Lamy reiterated that these three ingredients 

must be combined to produce an effective 

result. 

15 

Lamy added, however, that the timing still 

was not right to do a “horizontal give and 

take” on the Doha issues that are still open, 

given that “we need all these issues to be 

at the same level of technical maturity, and 

this is not the case yet.” He insisted that any 

horizontal discussions would have to include 

all topics that were still outstanding. 

Given the principle of “single undertaking,” 

nearly every item of on the Doha 

Development Agenda needs to be treated 

as part of the whole. As Lamy has frequently 

reminded delegates, “Nothing is agreed 

until everything is agreed.” 

Zambia, however, speaking on behalf of 

the group of Least Developed Countries, 

or LDCs, asked that members consider an 

“early harvest” for the following four areas: 

quota-free, duty-free market access for LDC 

exports; preferential trade in services for 

LDCs; an ambitious package on cotton; and 

simplification of rules-of-origin. 

At the TNC meeting, Lamy described “extra 

quantum” - a term he used in a meeting 

in Paris recently - as a “combination of 

ambition and balance for all participants,” 

calling upon countries to give the talks 

added momentum so that the Doha process 

can move forward. 

Some delegations took the TNC meeting as 

an opportunity to challenge Lamy’s use of 

this language. India, for instance, stated that 

they did not believe phrases like “added 

quantum” were helpful for the Doha 

Round. Raising the bar in these negotiations 

would be counterproductive and should be 

avoided, the Indian delegate said. Some of 

the other countries present also reiterated 

this concern. 

Delegations at the TNC meeting also spoke 

at length about whether the current Doha 

package was balanced, and about how big 

of a role the agriculture and industrial goods 

talks should play in the Round.

16 Issue 6 | Volume 9 | July / August 2010 

Brazil, speaking on behalf of the G20 

group of developing country farm exporters 

(not to be confused with the G20 group 

of major economic powers), stated that 

the December 2008 draft modalities text 

set the appropriate level of ambition and 

balance, and that there was no need to 

make additional concessions regarding these 

issues. The US, however, claimed that there 

was never the balance that other members 

say exists. 

Members lament lack of progress on 

cotton 

WTO Director-General Pascal Lamy told 

trade delegates in a fax on 12 May that 

cotton has become a “litmus test” for the 

“development dimension” of the Doha 

Round. However, at a recent review of 

the issue’s standing in WTO talks, some 

countries, such as Tanzania, alleged that no 

progress has been made since 2005. 

Leonce Kone, the trade minister from 

Burkina Faso - a cotton-exporting Least 

Developed Country (LDC) - joined Genevabased 

trade delegates in consulting with 

WTO Deputy Director-General Harsha 

Singh on 7 June. These consultations are 

part of the work of a Sub-Committee on 

Cotton, which was mandated in the General 

Council’s July 2004 framework agreement to 

conclude the Doha Round. The committee’s 

remit is to review “all trade-distorting 

policies affecting the sector in all three 

pillars of market access, domestic support, 

and export competition.” 

The consultations are intended to feed 

into a broader process that allows WTO 

members and donors to gauge progress on 

cotton - specifically with regards to trade, 

development, and the need for domestic 

reforms. Many developing country members 

used the 7 June meeting to express concern 

over the lack of attention that the issue has 

received in recent years. 

Brazil, which is engaged in negotiations to 

settle a WTO dispute with the US on cotton, 

called developed country subsidies an 

unfair source of competition for developing 

country farmers, while suggesting that 

consultations in the negotiations have 

backtracked. 

The United States, the world’s largest 

subsidiser of cotton, repeated on Monday 

its position that WTO agriculture talks in all 

other major areas should be resolved before 

negotiators turn to cotton. 

Tanzania insisted that development 

assistance without cuts in domestic support 

would lead nowhere, a common refrain 

among other developing country members. 

Director-General Lamy, in a letter to WTO 

ambassadors, reminded them of the 

growing amount of development assistance 

that is being offered on cotton, even during 

the global economic and financial crisis. 

According to the WTO, the disbursement 

of funds for cotton-related assistance has 

increased by 24% to US$266 million from 

the last such report. 

Tanzania insisted that 

development assistance 

without cuts in 

domestic support would 

lead nowhere, a 

common refrain among 

other developing 

country members. 

US, EU ink deal to end banana dispute 

The United States and the European Union 

signed an agreement that should bring to a 

close their long-running dispute over trade 

in bananas on 8 June, on the heels of a 

related pact that was signed by the EU and 

a group of Latin American countries a week 

earlier. 

Under the agreement, the European Union 

pledged to implement a non-discriminatory, 

tariff-only regime for its banana imports. 

“I am pleased that we, together with 

the Latin American banana-producing 

countries, have taken one more significant 

step toward ensuring that the EU’s bananas 

import regime is consistent with its WTO 

obligations,” said US Trade Representative 

Ron Kirk. 

The deal, which was initialled in Geneva 

in December of last year, serves as a 

complement to the Geneva Agreement on 

Trade in Bananas, the pact that was signed 

by the EU and a group of Latin American 

countries on 31 May. 

The United States soon joined the Latin 

Americans in their suits against Brussels. 

The US is not a major banana exporter, but 

several large banana companies - Chiquita, 

Del Monte and Dole - operate in Latin 

America but are headquartered in the US. 

This information has been summarised from 

ICTSD’s Bridges Weekly Trade News Digest. 

Notes 

1 How Would A Trade Deal On Cotton Affect Exporting 

And Importing Countries?, Mario Jales, International 

Centre for Trade and Sustainable Development, May 

2010, http://ictsd.org/i/publications/77906/


EPA 

Update 

Melissa Julian 

African regions seek common positions 

on EPAs 

The European and African Union (AU) 

Commissions held a meeting, attended for 

the first time by the African Regional 

Economic Communities, on 8 June where 

one of the issues discussed was the Economic 

Partnership Agreements (EPAs). The meeting 

followed an AU EPA negotiations 

coordination meeting on 20- 21 May, aimed 

at achieving synergy and coherence in the 

EPA negotiations. The AU also presented a 

paper to the EC highlighting contentious 

issues in the EPA negotiations. These were 

identified as: 

• 

• 

• 

• 

The EC’s position that the World Trade 

Organization (WTO) definition of 

substantially all trade coverage and 

transitional time frames requires that all 

African countries and customs territories 

under the EPA have to liberalise at least 

80% of their value of trade within 15 

years. African countries and regions have 

proposed to liberalise 60-70% of their 

trade during periods of over 20 years, 

arguing that this is necessary for Least 

Developed Countries (LDCs). The AU 

also notes that there is no clear 

definition at the WTO on this question. 

African countries’ position that the EC’s 

proposal to prohibit the use of export 

taxes and quantitative restrictions under 

EPAs is an unnecessary WTO-plus 

requirement that would limit the policy 

space to use these measures for value 

addition, diversification, infant-industry 

promotion, food security, revenue and 

environmental considerations. 

The EC’s proposal to include a Most 

Favoured Nation Clause (MFN) in the 

EPAs, which would require African 

countries to extend to the European 

Union any more favourable treatment that 

it would give to any other “major trading 

partner”. African countries feel this limits 

their scope to sign ambitious trade 

agreements with emerging economies. 

EC hesitance to allow for future tariff 

modifications, which African countries 

argue are necessary to take account of 

the evolution of regional integration 

programmes. 

• 

• 

• 

• 

African countries’ proposals for 

asymmetry in the rules of origin to take 

account of the differences in the level of 

development between African countries 

and the EU. African governments want 

unconditional cumulation with all ACP 

and neighbouring countries. 

African countries’ proposal to allow 

agricultural safeguards, on the grounds 

that products originating in the EU can 

cause serious injury in African markets. 

The EC’s proposal that African 

community levies should be phased 

down, which the Africans feel 

undermines financing for regional 

integration programs. 

African countries’ proposals for legally 

binding measures to ensure additional 

EU resources are provided and effectively 

implemented to support EPA 

implementation. 

Central Africa EPA meetings delayed 

again 

A meeting of the Central Africa EPA contact 

group, which plans to establish a work 

programme for EPA negotiations, has yet to 

be held. The Central African EPA Regional 

Negotiating Committee is due to meet in 

mid-July in Kinshasa to flesh out negotiating 

positions. 

EC officials were expected in the region from 

16-23 June to meet with trade ministers from 

Congo Brazzaville (the current president of 

the Economic Community of Central African 

States), Gabon and the General Secretary of 

the Economic Community of Central African 

States (ECCAS). No further information has 

been provided, but expectations were that 

discussions would focus on the details of the 

conclusions of the February Central Africa 

ministerial meeting on EPAs. 

Contentious issues remain following 

latest round of West Africa-EU EPA 

negotiations 

An EU-ECOWAS (Economic Community of 

West African States) ministerial-level meeting 

held on 15 June reiterated the commitment 

of both sides to resolve the outstanding areas 

of divergence and swiftly conclude a regional 

EPA covering trade in goods, EPA-related 

cooperation and other trade-related issues by 

the end of 2010 1 . Ministers also welcomed 

the conclusions of the EU Council regarding 

the West African EPA Development 

Programme (EPADP) adopted on 10 May. 

Both parties agreed on the need to ensure 

the availability of financing from the EU and 

other parties as soon as possible. 

17 

Joint technical-level EPA negotiations were 

held in Ouagadougou from 2-11 June. 2 

Based on the results of the ECOWAS Council 

of Ministers meeting on 31 May, 3 West Africa 

maintained its market access offer of 70% 

coverage with a transition period of 25 years 

starting after a 5-year moratorium. The 

region also rejected the EC’s proposal for the 

inclusion of MFN and non-execution clauses 

in the EPA. Some progress was made on the 

formula for tariff dismantling and the 

corresponding calendar, although there is 

uncertainty over the Common External Tariff’s 

(CET) definition, classifications and 

completion (issues which were discussed at a 

CET regional meeting between the ECOWAS 

and the West African Economic and 

Monetary Union Commissions from 24-28 

May and will be raised again in July). As a 

result, there is currently no clear starting point 

for tariff dismantling. West Africa also called 

for the maintenance of regional levies. 

There was an initial discussion on West 

Africa’s proposal for a protocol on the 

modalities for implementing EPADP. The first 

substantial discussion on proposals from both 

parties on rendezvous clauses was also held. 

There was also a constructive exchange on 

rules of origin (ROI) based on a paper from 

the EU on asymmetries with respect to the 

rules applied to agriculture and fisheries 

products. Negotiations will continue in all 

areas. 

East and Southern Africa continue 

preparations for July-August round of 

EPA negotiations 

There have been no EPA meetings over the 

past month, but the East and Southern 

African (ESA) region continues to prepare for 

the next round of technical and political-level 

negotiations to explore ways of resolving the 

contentious issues based on a reality check of 

what is feasible in a full and inclusive EPA that 

goes beyond trade in goods (i.e., covering 

services, investment, government

18 Issue 6 | Volume 9 | July / August 2010 

procurement, competition etc). The ESA will 

write to the EC summarising the region’s 

position on the way forward. 

Seychelles finalised their ratification process 

for the IEPA on 21 May. 4 

East African Community and EC agree to 

focus on signing comprehensive EPA 

An East African Community (EAC)-EU 

ministerial meeting, preceded by a senior 

officials meeting, took place in Dar es Salaam 

on 9 June. 5 Ahead of the meeting, there were 

indications that the Framework EPA (FEPA), 

initialled in November 2007, would be signed 

by EAC ministers, but in the week prior to the 

negotiations, a letter from the EAC’s WTO 

coordinator to EAC governments, Tanzanian 

Ambassador Dr. Matern Lumbanga, reported 

serious reservations about the content and 

timing of the FEPA, particularly its 

compatibility with the flexibilities already 

provided to EAC countries in the WTO. For 

this reason, Lumbanga urged governments 

not to sign the FEPA in its current form. 

Progress was made in the negotiations in 

relation to sanitary and phytosanitary 

measures, technical barriers to trade, and 

customs and trade facilitation. Text was also 

agreed for the articles on dispute settlement. 

In other areas - export taxes, the MFN clause, 

and allowance for future tariff modifications 

to take account of the evolution of regional 

integration programmes - no consensus was 

reached. 

The EAC also wanted to include a reference 

to the development matrix - which had been 

expected to be completed before the summer 

- in the EPA to make it a legally binding 

commitment. However, the EC wants to 

include this only in the comprehensive EPA. 

The EAC maintained its position that its 

proposed changes rectify factual errors in the 

FEPA text and the initialled FEPA should be 

amended to reflect these before signing and 

moving on to negotiations on a 

comprehensive EPA. For its part, the EC 

argues that the proposed changes would 

alter the substance of the initialled agreement 

and that it has no mandate to amend the 

FEPA. Instead, the EC wants the EAC to sign 

the November 2007 FEPA and then move to 

include any changes in the eventual 

comprehensive EPA. The EC also emphasised 

that the current situation is untenable since it 

provides duty-free, quota free access for the 

EAC to the EU market with no commitments 

from the EAC. 

The parties, therefore, agreed to accelerate 

negotiations for a comprehensive EPA – 

which could include revised texts on 

contentious issues and also services, 

investment, intellectual property rights, 

government procurement and competition 

– with a view to reaching agreement so that 

a full EPA could be ready for signature by the 

end of November 2010, prior to the AU-EU 

summit. EU Trade Commissioner Karel De 

Gucht made it clear that he would do his 

upmost to maintain applied tariffs provided 

that both parties conduct negotiations in 

good faith. 

SADC and EC hold first round of EPA 

negotiations in nearly a year 

On 3 June, the EU Council adopted its 

position to be taken within the EU-South 

Africa Cooperation Council on amendments 

to the EU-South Africa agreement on trade, 

development and cooperation, in order to 

align certain sensitive tariffs with those 

applied to EU products by Botswana, Lesotho 

and Swaziland. 6 

On 25 and 26 May, technical and senior 

officials’ from the EC and Southern African 

Development Community (SADC) met in 

Brussels, for the first time in nearly a year, to 

discuss the way forward in the EPA 

negotiations. 7 The EC stressed the need to 

proceed with signing, notification and 

implementation of the IEPA in order to 

provide legal security to the EU market access 

enjoyed by the SADC EPA states. In parallel, a 

comprehensive EPA should be negotiated, 

says the EC. For its part, the SADC underlined 

its commitment to move towards notification 

and provisional application of the IEPA and to 

negotiate a comprehensive EPA by the end of 

2010, but considers it necessary to first 

address the outstanding issues in the IEPA. 

SADC requested stronger guarantees and 

reassurances that the Swakopmund texts 

agreed in March 2009 would replace existing 

IEPA provisions. The EC reiterated that the 

agreement of Swakopmund would prevail 

and the new provisions would be integrated 

in the comprehensive EPA once concluded. 

Following the meeting, Botswana’s chief 

negotiator, James Masisi, said that the EC 

confirmed this commitment in a letter. 

“Thus, there is legal assurance to say the EU 

has agreed to this,” said Masisi. 8 

SADC insisted on the need to solve tariff 

alignment issues. The EC indicated that the 

SACU CET is not under risk until the interim 

EPA is applied, since the South African Trade 

and Development Cooperation Agreement 

(TDCA) is de facto applied by all SACU 

countries. The EC maintains that once the 

IEPA is implemented, tariff alignment is 

possible. The EC also indicated that another 

option is to move directly to the 

comprehensive EPA with the whole region, in 

which case any alignment on tariffs and rules 

of origin would be unnecessary. 

The SADC requested modifications on the 

rules of origin provisions in the IEPA – 

including an alignment of the TDCA and IEPA 

provisions, cumulation, maritime issues, tuna 

derogation and administrative cooperation 

agreement. 

South Africa repeated its interest to improve 

its access to the EU market beyond the 

current TDCA provisions. Given that other 

SACU states already enjoy duty and quota 

free access, the EU considered that there 

seems to be limited scope for further 

liberalisation, since an adequate level of 

reciprocity is required from South Africa. Both 

sides agreed that these tariff negotiations 

should not hinder the rapid conclusion of a 

comprehensive EPA. 

Both sides indicated they are ready to resume 

negotiations on services and investment. The 

SADC suggested that the investment chapter 

should be limited to cooperation, while the 

EC is seeking liberalisation commitments. 

The SADC suggested elaborating joint 

modalities and concluding services 

negotiations within 5 years, while the EC 

would like a faster process. The EC suggested 

a ‘differentiated’ approach whereby each 

SADC member could negotiate provisions 

individually with the EU and potential 

incompatibilities for the region to develop a 

common set of provisions could be 

addressed. SADC will consider this proposal.


SACU and SADC senior officials and 

ministerial meetings were held from 16-18 

June to discuss the outcome of the latest 

round of EPA negotiations and clarify the pros 

and cons of signing the IEPA. Ministers 

approved the strategy to conclude the EPA 

negotiations on outstanding issues, including 

on tariffs and rules of origin, and chapters on 

services and investment, so that the EPA can 

be signed and notified by the end of the year. 

Negotiations on services and investment 

liberalisation commitments should be 

completed in 2014. 

Caribbean implementation still facing 

challenges 

EC officials indicate that internal 

arrangements between the CARICOM 

(Caribbean Community and Common 

Market) Member States and the Dominican 

Republic are still posing problems for effective 

EPA implementation, but could be solved 

with the necessary political will. 9 No further 

information has been provided to TNI. 

The CARICOM Council for Trade and 

Economic Development met from 17-18 June 

in Guyana, but no information on the 

outcome of the meeting in relation to EPAs 

was available as TNI went to press. 

Pacific 

Pacific ACP trade officials and ministers were 

scheduled to meet in Nadi in June to discuss 

EPAs, but no information on the outcome of 

the meeting was available at press time. This 

marks the first EPA meeting for the Pacific 

since September 2009. Outstanding issues in 

the regional negotiations towards a 

comprehensive agreement include the rules 

of origin applied to fishery products and a 

fisheries chapter, the MFN clause, export 

taxes, provisions to protect infant industries 

and the non-execution clause. Services would 

be covered by a rendezvous clause. Sources 

indicate that given the slow progress, a 

comprehensive regional EPA is unlikely 

anytime soon. An alternative being 

considered is to have more countries sign the 

existing IEPA and gradually expand its scope. 

Author 

Melissa Julian is Knowledge Management Officer with 

ECDPM. 

Notes 

1 EU-ECOWAS Political Dialogue at Ministerial Level. 

Communiqué. 15 June 2010. 

http://www.consilium.europa.eu/App/NewsRoom/ 

loadDocument.aspx?id=360&lang=EN&directory=en/ 

er/&fileName=115295.pdf 

2 EU and West African hold EPA talks in Ouagadougou. 

EC press release. 16 June 2010. 

http://www.acp-eu-trade.org/library/library_detail. 

php?doc_language=en&library_detail_id=5320 

3 Results of ECOWAS Council of Ministers on status of 

implementation of regional integration programmes 

and Economic Partnership Agreements with the EU. 31 

May 2010. http://news.ecowas.int/presseshow. 

php?nb=094&lang=en&annee=2010 

4 EU welcomes ratification of interim EPA by Seychelles. 

EC Press Release. 21 May 2010. 

trade.ec.europa.eu/doclib/html/146180.htm 

5 EU Trade Commissioner meets East African 

Community Trade Ministers. EC. 9 June 2010. 

http://trade.ec.europa.eu/doclib/press/index. 

cfm?id=583 and EAC-EC Economic Partnership 

Agreement Negotiations Held. EAC. 9 June 2010. 

Joint declaration http://www.eac.int/component/ 

content/451.html?task=view and 

EU sets November deadline for new trade pact with 

EAC. tralac. 11 June 2010. http://www.tralac.org/ 

cgi-bin/giga.cgi?cmd=cause_dir_news_item&news_ 

id=88407&cause_id=1694 

6 EU Council adopts decision on South Africa-SACU 

customs duties alignment. EU Council. 3 June 2010 

http://www.consilium.europa.eu/App/NewsRoom/ 

loadDocument.aspx?id=352&lang=EN&directory=en/ 

jha/&fileName=114900.pdf See also: http://register. 

consilium.europa.eu/pdf/en/10/st09/st09393.en10.pdf 

7 EU and SADC EPA Group hold EPA negotiations in 

Brussels. EC press release. 25-26 May 2010. 

http://www.acp-eu-trade.org/library/library_detail. 

php?doc_language=en&library_detail_id=5311 

8 Botswana in fragile balancing act at EPA talks. Mmegi. 

20 June 2010. 

9 European Parliament International Trade Committee to 

discuss EPAs. 1 June 2010. State of Play on Economic 

Partnership Agreements. Presentation by the European 

Commission.Watch a recording online at: http://www. 

europarl.europa.eu/eng-internet-publisher/eplive/ 

public/default.do?language=en 

TNI is published by 

The International Centre for Trade and 

Sustainable Development 

Chief Executive: 

Ricardo Meléndez-Ortiz 

Editor: 

Damon Vis-Dunbar 

Address: 

7 Chemin de Balexert 

1219 Geneva, Switzerland 

Tel: (41-22) 917-8947 

Fax: (41-22) 917-8093 

Email : periodicals@ictsd.ch 

Web: www.ictsd.net 

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Management 

Editor: 

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Address: 

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Tel: (31-43) 3502 900 

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Email: tni@ecdpm.org 

Web: www.ecdpm.org 

Editorial team: 

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Isabelle Ramdoo 

Design: 

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Web: www.thehouselondon.com 

This monthly publication is made possible through 

the financial contribution of the Government of the 

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Foreign affairs (DGIS). 

The opinions expressed in the signed contributions 

to TNI are the authors’ and do not necessarily 

reflect the views of ICTSD or ECDPM. Manuscripts 

offered for publication are expected to respect 

good journalistic practice and be compatible 

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available on request. 

Material from TNI can be used in other publications 

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© Trade Negotiations Insights 

ISSN 1682-6744 

Unless stated images are sourced from 

istockphoto.com 

19

20 


Trade Negotiations Insights 

Calendar and resources 

ACP-EU Events WTO Events 

July 

1 Belgium takes over the 

Presidency of the European 

Union, Brussels, Belgium 

4-7 Thirty-first Conference of 

the CARICOM Heads of 

Government, Jamaica 

7-9 EESC regional seminar of 

ACP-EU Economic and Social 

Interest Groups. Addis Ababa, 

Ethiopia 

12-16 (TBC) 

EU – WA technical 

negotiations on Rules of 

Origins, (place TBC) 

15-16 Workshop on civil society and 

the Africa-EU Strategy, Addis 

Ababa, Ethiopia 

19-20/22(TBC) 

EU - SADC EPA technical 

negotiations, Brussels, 

Belgium 

19-27 Summit of the African 

Union (possibly preceded 

by civil society pre-summit), 

Kampala, Uganda 

26-27 EPA-related seminar for 

Malawi, Malawi 

Resources All references are available at: www.acp-eu-trade.org/library 

Trade relevant provisions in the Treaty 

of Lisbon. Implications for Economic 

Partnership Agreements, Koeb, E. and M. 

Dalleau, Discussion Paper 98, Maastricht: 

ECDPM, June 2010,www.ecdpm.org 

U-ACP Economic Partnership Agreements: 

State of Play at June 2010, European 

Commission, State of Play at June 2010, 15 

June 2010, trade.ec.europa.eu 

Commissioner De Gucht’s Speaking Points 

on the Future Trade Policy, European 

Commission on Trade, European Parliament, 

Committee on International Trade, 22 June 

2010,trade.ec.europa.eu 

European Parliament decision of 15 June 

2010 on the setting up and numerical 

strength of the Delegation to the 

CARIFORUM-EU Parliamentary Committee, 

European Parliament decision, 15 June 2010, 

register.consilium.europa.eu 

Official text - EU-US-Latin America banana 

agreements, EU Official Journal. 9 June 2010, 

eur-lex.europa.eu 

Council conclusions on the Millennium 

Development Goals for the United Nations 

High-Level Plenary meeting in New York 

and beyond, Council Conclusions, Council of 

the European Union, 3023rd FOREIGN AFFAIRS 

Council meeting, Luxembourg, 14 June 2010, 

www.consilium.europa.eu 

Printed on 100% recycled paper 

TBC SACU Council of Ministers 

and Heads of Government 

Summit, South Africa 

TBC ESA-EC EPA meeting and 

technical round (place TBC) 

TBC Central African EPA Regional 

Negotiating Committee 

meeting, Kinshasa, RDC 

August 

23-25 ESA-EC Senior Officials 

EPA negotiations, Manzini, 

Swaziland (TBC) 

25-27 28th meeting of COMESA 

Council of Ministers (place 

TBC) 

27 ESA EPA Council, Manzini, 

Swaziland (TBC) 

31-1 14th COMESA Heads of State 

and Government Summit, 

Swaziland 

September 

13-14 EPA information seminar 

(South Africa), Capetown, SA 

13-17 EU-West Africa technical 

and senior officials EPA 

meetings, Brussels, Belgium 

Proposal for a Council Decision on the 

signature of the regional Convention on 

pan-Euro-Mediterranean preferential rules 

of origin, Proposal for a Council Decision, 

Council of the European Union, 8 June 

2010,register.consilium.europa.eu 

Proposal for a Regulation (EU) of 

the European Parliament and of the 

Council amending Council Regulation 

(EC) No 732/2008 applying a scheme 

of generalised tariff preferences for 

the period from 1 January 2009 to 31 

December 2011, Proposal from the European 

Commission, 27 May 2010, register.consilium. 

europa.eu 

Global Economic Prospects 2010- Summer 

2010 ‘Fiscal Headwinds and Recovery’, 

World Bank Report, 10 June 2010, 

siteresources.worldbank.org 

Assessing Regional Integration in Africa 

IV Enhancing Intra-African Trade, UNECA- 

AfDB-AU Report, May 2010, www.uneca.org 

Economic Development in Africa Report 

2010, UNCTAD Report, 18 June 2010, www. 

unctad.org 

Trade Regionalisation and Openness in 

Africa, Lelio Iapadre, Francesca Luchetti, 

European University Institute, Robert Schuman 

Centre for Advanced Studies, Working Paper, 

June 2010, erd.eui.eu 

24 SACU Council meeting, South 

Africa 

20-23 SACU Commission meeting, 

South Africa 

TBC SADC-EU senior officials EPA 

meeting (place TBC) 

TBC EPA technical workshop, 

Nadi, Fiji Islands 

TBC EU - SA Joint Cooperation 

Council, South Africa 

TBC EU-EAC EPA Information 

Seminar, Kigali, Rwanda 

TBC Joint ACP-EU Ministerial Trade 

Committee (place and event 

TBC) 

The Costs and Benefits of Duty-Free, 

Quota-Free Market Access for Poor 

Countries: Who and What Matters, Antoine 

Bouët, Kimberley Elliott, David Laborde 

Debucquet, Elisa Dienesch, Center for Global 

Development, Working Paper, March 2010, 

www.cgdev.org 

Doing Business in the East African 

Community 2010, Report prepared as part 

of the EAC Investment Climate Program 

supported by the World Bank Group and DFID, 

24 May 2010, www.doingbusiness.org 

Are Simplified Customs Procedures for 

Imports Effectively Controlled? European 

Court of Auditors, Report, 7 June 2010, eca. 

europa.eu 

Leveraging World Bank Resources for the 

Poorest: IDA Blended Financing Facility 

Proposal, Benjamin Leo, Center for Global 

Development, Working Paper, 08 June 2010, 

www.cgdev.org 

Our Common Strategic Interests Africa’s 

Role in the Post-G8 World, Tom Cargill 

Chatham House Report, June 2010, www. 

chathamhouse.org.uk 

LDCs Terms of Trade during Crisis and 

Recovery, International Trade Centre, ITC 

Trade Map Factsheet #3, June 2010, www. 

intracen.org 

July 

5-7 Trade Policy Review Body — Chinese 

Taipei 

26-28 Trade Policy Review Body — The Gambia 

29-30 WTO General Council 

September 

15-17 WTO Public Forum 2010 

19 WTO Open Day 2010 

29 - 1/10 

Trade Policy Review Body — United States 

How imports improve productivity and 

competitiveness, OECD Report, May 2010, 

www.oecd.org 

Trade and the economic recovery: why 

open markets matter, OECD Report, May 

2010, www.oecd.org 

Trade Policy and the Economic Crisis, 

OECD, Report, May 2010, www.oecd.org 

Sixth Report on Potentially Trade 

Restrictive Measures, EC Trade Report, 28 

May 2010, trade.ec.europa.eu 

Africa Resists the Protectionist Temptation. 

The 5th GTA Report Simon Evenett, 5th 

Global Trade Alert Report, May 2010, www. 

globaltradealert.org 

The Myth and Reality of Chinese Investors: 

A Case Study of Chinese Investment in 

Zambia’s Copper Industry, South African 

Institute of International Affairs, China in 

Africa Project, May 2010, www.saiia.org.za 

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