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What are the costs of a non-EPA?

What are the costs of a non-EPA?. TIPS Workshop, Pretoria 4-5 March Dr Mareike Meyn. Overview. What are the alternatives to EPAs for Developing African countries For Least Developed Countries (LDCs) What costs occur for Non-EPA signatory LDCs Non-EPA signatory developing countries

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What are the costs of a non-EPA?

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  1. What are the costs of a non-EPA? TIPS Workshop, Pretoria 4-5 March Dr Mareike Meyn

  2. Overview • What are the alternatives to EPAs for • Developing African countries • For Least Developed Countries (LDCs) • What costs occur for • Non-EPA signatory LDCs • Non-EPA signatory developing countries • Signatory LDCs that will not ratify an EPA • Signatory developing countries that will not ratify an EPA • Differentiation of these 4 types is important since the countries face different costs when not joining an EPA Alternatives to EPAs. TIPS workshop March 2008

  3. What are the alternatives to EPAs? • Art. 37.6 Cotonou: EU will provide trading regime that is ‘equivalent’ to Cotonou provisions • Only ‘alternatives; were and are the EU’s GSP system: • Standard GSP (open to most developing countries) • Everything But Arms - EBA • GSP+ (expanded GSP system linked to respect of core labour and human rights principles) • All ‘alternatives’ are problematic – WHY? • Standard GSP … • EBA … • GSP+… Alternatives to EPAs. TIPS workshop March 2008

  4. What are the alternatives to EPAs? 1. Standard GSP • 267 products would face tariff jumps of over 10 percent ad valorem. Most affected products are beef, processed fruit, sugar, rice, bananas, citrus and horticulture. 2. EBA • Cotonou equivalent market access but only open for LDCs 3. GSP+ • does not comprise all products (such as beef and sugar) but would be an alternative for some countries • Only open in 2009; Nigeria’s and Seychelles’ request was rejected in 2007. Alternatives to EPAs. TIPS workshop March 2008

  5. 1. Non-EPA signatory LDCs • Biggest group of non-EPA signatory states • 24 in Africa, 5 in the Pacific, 0 in the Caribbean • ESA: Djibouti, Eritrea, Ethiopia, Malawi, Sudan, Zambia • SADC: Angola • Direct monetary costs: limited • EBA fallback position • But: ‘Cotonou plus’ RoO do not apply • Indirect costs: non-quantifiable but can be substantial Alternatives to EPAs. TIPS workshop March 2008

  6. 2. Non-EPA signatory developing countries • 3 in Africa (Nigeria, Congo, Gabon) and 7 in the Pacific • Direct monetary costs: limited • Africa: only one item (raw sugar cane) for one country (Congo) • accounts for more than 1% of total exports and • faces ad valorem tariff jumps of more than 20% • Indirect costs: lower than for group 1 Alternatives to EPAs. TIPS workshop March 2008

  7. 3. Signatory LDCs that will not ratify an EPA • Currently 8 in Africa (none in West and Central), 1 in the Caribbean, 0 in the Pacific • ESA: Comoros, Madagascar • EAC: Burundi, Rwanda, Tanzania Uganda • SADC: Lesotho, Mozambique • Direct monetary costs for all: limited (EBA) • BUT: is it feasible for them to leave the EPA? • Motivation to join the EPA for • Lesotho and all EAC LDCs? • Mozambique? • Madagascar? Alternatives to EPAs. TIPS workshop March 2008

  8. 4. Signatory developing countries that will not ratify an EPA • Currently 10 in Africa, 2 in the Pacific, 14 in the Caribbean • ESA: Mauritius, Seychelles, Zimbabwe • EAC: Kenya • SADC: Botswana, Namibia, Swaziland Alternatives to EPAs. TIPS workshop March 2008

  9. 4. Signatory developing countries that will not ratify an EPA • Number of products affected and monetary costs that would occur from being downgraded to GSP vary largely • Traditional commodity exporters and horticultural producers are affected worst • However, also Botswana (1.5% of EU total EU exports affected) would face costs: • Beef exports would face tariff increases worth 80% of 2006 export revenues; • Risk to lose other remunerative market niches when no longer being able to proof that it meets EU standards; Alternatives to EPAs. TIPS workshop March 2008

  10. Main messages • The costs of a non-EPA depend very much on the ‘status’ of the African country • Developing countries agricultural exporters are affected worst • A non-EPA is not feasible / does not seem desirable for all LDCs • The non-signatory EPA states have either • equivalent market access (EBA); or • comparatively little too loose. Alternatives to EPAs. TIPS workshop March 2008

  11. What should a country consider when opting for or against an EPA? • What would be the best strategy for your country? Alternatives to EPAs. TIPS workshop March 2008

  12. What are the costs of a non-EPA? TIPS Workshop 5-6 March 2008

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