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Understanding Costs of Non-EPA: Insights from TIPS Workshop

Dive deep into the costs and alternatives of non-EPA signatories for developing African countries and LDCs at the TIPS Workshop in Pretoria. Analyze the direct and indirect impacts, such as tariff jumps and market access limitations, to make informed decisions. Explore different scenarios faced by non-EPA signatory nations and grasp the importance of differentiation based on their unique challenges. Discover viable alternatives like standard GSP, EBA, and GSP+ and understand the complexities associated with each option. Gain valuable insights into the implications of not joining an EPA and the considerations for opting in or out.

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Understanding Costs of Non-EPA: Insights from TIPS Workshop

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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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