Economic partnership agreements between the EU and African

Economic partnership agreements

between the EU and African, Caribbean

and Paciﬁc (ACP) countries

Objectives and beneﬁts

The Economic Partnership Agreements (EPAs) are trade agreements between the EU

and several African, Caribbean and Paciﬁc (ACP) countries. Their principal aim is to

remove tariﬀs and some other obstacles to bilateral trade between them.

This way, businesses in the EU and ACP countries can trade freely with each other.

Trade and investment ties are enhanced thanks to the overall improved business

environment. Consumers gain access to a bigger variety of cheaper goods. EPAs

also help integrate the ACP partners into the world value chains – and ultimately

contribute, through trade and investment, to sustainable development, job creation

and poverty reduction.

Increased trade between the EU and EPA countries

EPAs have replaced the previous system of unilateral trade preferences to ACP

countries that functioned under Lomé Conventions since 1975. To date, 32 of the

79 ACP countries are implementing EPAs. Overall EU’s trade with these countries

increased from EUR 58 billion in 2008, when the ﬁrst EPA started to be provisionally

applied, to EUR 65 billion in 2020, representing a 13% increase in the value of trade in

just over a decade. Over the same period, EU imports from these countries increased

from EUR 31 billion to EUR 34 billion (9% increase) and EU exports increased from

EUR 27 billion to EUR 32 billion (17% increase).

Focus on development needs

EPAs are designed in a way that respects the rules of the World Trade Organisation.

But they also go beyond conventional free trade agreements by taking into

account the socio-economic needs and development level of ACP countries.

They include development cooperation and assistance to help ACP countries take full

advantage of the agreements.

The Economic

Partnership

Agreements are

trade agreements

between the EU

and 32 African,

Caribbean and

Paciﬁc countries.

State of play of EPAs

EPAs with ACP countries or regions are at diﬀerent stages of their life cycle:

I. EPAs in force with 32 ACP countries:

 EPA with 14 CARIFORUM States

is applied since 2008;

 EPA with Paciﬁc States is applied by Papua New Guinea since 2009, Fiji since 2014, Samoa since

2018 and Solomon Islands since 2020;

 EPA with Eastern and Southern Africa (ESA) is applied by Madagascar, Mauritius, Seychelles,

Zimbabwe since 2012 and Comoros since 2019;

 EPA with Cameroon in Central Africa is applied since 2014;

 EPA with the Southern and African Development Community (SADC) is applied by Botswana,

Eswatini, Lesotho, Namibia and South Africa since 2016; and Mozambique since 2018;

 EPA with Côte d'Ivoire is applied since 2016; and

 EPA with Ghana is applied since 2016.

CARIFORUM Members are Antigua and Barbuda, The Bahamas, Barbados, Belize, Cuba, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, St. Kitts

and Nevis, Saint Lucia, St. Vincent and the Grenadines, Suriname and Trinidad and Tobago. However, Haiti is not provisionally applying the agreement

Evolution of EU trade with ACP EPA countries in billion euros

EU imports from ACP

EPA countries

EU exports to ACP EPA

countries

EU total trade with ACP

EPA countries

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

II. Negotiations concluded but adoption of EPAs pending:

 EPA with the West Africa region covering 16 countries (Benin, Burkina Faso, Cape Verde, Gambia,

Ghana, Guinea, Guinea Bissau, Côte d’Ivoire, Liberia, Mauritania, Mali, Niger, Nigeria, Senegal, Sierra

Leone and Togo); and

 EPA with the East African Community (EAC) covering 5 countries (Burundi, Kenya, Rwanda,

Tanzania, and Uganda).

III. Widening and deepening of EPAs:

z One of the advantages of EPAs is that they are dynamic partnerships. Other interested

countries in a region can join an existing agreement to enjoy the same beneﬁts. This

process is called “widening”:

 In 2020, Angola requested to join the SADC EPA and the accession negotiations are pending

approval of the parties; and

 Tonga and Timor-Leste notiﬁed the EU of their intention to join the Paciﬁc EPA in 2018 and 2020,

respectively.

z EPAs also oﬀer possibility to add new areas to the agreements once the partner countries are

ready to take up such commitments. This is called “deepening” of EPAs. For instance services,

investment, trade facilitation can be integrated into EPAs to develop an even more open business

environment. Trade and sustainable development is a particularly important area that is required

in the new EU agreements.

 Ongoing negotiations for deepening the EPA with the Eastern and Southern Africa aim to create a

modern and comprehensive trade and development agreement by extending its scope and

commitments between the parties.

Covid-19 impact

Main features of EPAs

1. Fostering trade and investment, opportunities for business in the

EU and ACP countries

The main objective of the EPAs is to liberalise trade between the EU and ACP

partner countries.

z EPAs foresee asymmetric removal of tariﬀs. In practical terms, this means

that the EU fully liberalised access to its market immediately upon application

of the EPAs and all goods from ACP partner countries can enter the EU market

without any tariﬀs or quotas.

z ACP partner countries beneﬁt from transitional periods and exclusion

of sensitive products from liberalisation. This is set out in each EPA in

liberalisation schedules which provide for a list of products to be liberalised over

a certain period and a date for liberalisation to be ﬁnalised.

z EPA partner countries may also beneﬁt from other facilities that take into

account their development needs such as cumulation of rules of origin,

special safeguards and measures for agriculture, food security and

infant industry protection.

High preference utilisation rates of EPAs show that EPA partner countries fully

use preferences to export to the EU market. EU business is still exploring the high

potential of ACP EPA markets.

The deepening of EPAs into modern and comprehensive agreements, such as

the ongoing one with the ESA EPA countries, allows to include in EPAs other trade-

related areas from services, technical barriers to trade, customs and trade facilitation,

government procurement to intellectual property and trade and sustainable

development. Such disciplines will encourage investment further by enhancing

the business environment and providing more opportunities for companies. This is

especially relevant in light of the ongoing diversiﬁcation of ACP economies towards

services, such as construction, renewable energy, telecommunications, transport and

ﬁnancial services.

2. Agriculture, industrial development and diversiﬁcation of trade

Together with the EU development cooperation mechanisms, EPAs are designed to

foster reform and strengthen governance in partner countries. This in return can

lead to the creation of an attractive business and investment environment, opens

new trading opportunities, and boosts economic growth. The EPAs are international

agreements that do not expire. Thus, the timeless free access of partner countries

into the EU market, on the one hand, and the long-term free access of EU products

into their markets, on the other, increase incentives to invest in developing ACP

countries and in building capacity to meet EU standards. Legal certainty, stability

and predictability are among the main aspects potential investors are likely to

consider when deciding on an investment.

EPAs oﬀer opportunities for farmers in EPA partner countries as the EU is the biggest

importer of agricultural products from ACP countries. While EPAs remove tariﬀs

on most agricultural products, some sensitive goods are treated with care.

ACP partner countries have been able to protect some sensitive agricultural products,

either by excluding them from tariﬀ cuts or by keeping the option of triggering

safeguards in case of unforeseen, sharp and sudden increase of imports from the

EU. They can also take food-security measures where necessary.

EU development assistance, through trade capacity-building measures, supports ACP

farming and rural employment, and farmers' capacity to comply with sanitary and

phytosanitary and other agricultural standards. This alignment of standards makes

it easier to comply with the requirements necessary to bring those products into the

EU, further opening trading opportunities in the agricultural sector.

EPAs also can help ACP countries develop their industrial capacities, produce

value-added goods and diversify trade (from heavy reliance on oil and mineral or

commodities revenues). EPAs lower the cost of imported inputs and thus contribute to

High preference

utilization rates

of EPAs show

that EPA partner

countries fully use

trade preferences

to export to the EU

market.

EU is the biggest

importer of

agricultural

products from

ACP countries.

lowering production costs. This increases the competitiveness of the local economies

to produce for local, regional and international markets and to connect to global

value chains. For example, thanks to duty free access to the EU’s market provided by

EPA, in 2020 South Africa exported to the EU market vehicles in value of EUR 3.5 bn.

The EU‘s exports of automotive parts to South Africa was worth EUR 1.8 bn. Another

example concerns textiles and clothing sector. Madagascar has developed exports

to the EU taking advantage of ﬂexible rules of origin for this sector in EU-ESA EPA.

Like for sensitive agricultural products, EPAs allow ACP countries to exclude from

liberalization some sensitive industrial products within the limits of multilateral rules,

or in certain situations allow measures that protect infant industry and industrial

sectors.

3. Trade and sustainable development

EPAs have sustainable development as their key objective.

In the Cotonou and post-Cotonou Partnership Agreements, the EU and ACP countries

agreed to promote trade in a way that meets internationally recognised labour

standards, protects the environment and manages natural resources in a responsible

way. EPAs are based on the "essential and fundamental" elements, i.e. human rights,

democratic principles, the rule of law, and good governance. Appropriate measures

can be taken if any party fails to fulﬁl its obligations in respect of those essential

elements.

While most of EPAs do not include a fully-ﬂedged Chapter on Trade and Sustainable

Development, key principles for trade and sustainable development are included in

EPAs with CARIFORUM and SADC.

The discussions are currently ongoing with the Paciﬁc EPA countries on a Political

Declaration on Trade and Sustainable Development. EU and ESA countries have

agreed to include a Chapter on Trade and Sustainable Development as a part of a

modernized EPA.

In the framework of EPAs, the EU, Ghana, Côte d’Ivoire and Cameroon discuss

sustainability of cocoa supply chain.

4. Forum for government to government dialogue on trade and civil

society involvement

EPAs provide for a forum for dialogue and exchanges between the EU and partner

countries. This dialogue takes place in the committees which are tasked to manage

and monitor EPAs. EPA committees meet regularly, usually twice a year.

Organic exports from the ACP EPA

countries

The Dominican Republic is the largest

ACP organic exporter, but also the

second largest source of EU imports of

organic products. The Dominican Republic

accounted for 26% of EU imports in

this category. Other important ACP EPA

organic exporters include Cote d’Ivoire,

with strong growth in Ivorian organic

banana exports to the EU in 2020. Also

worth noting is that almost half of EU

imports of organic citrus originate in

South Africa (43%).

Sustainable

development is

one of the key

objectives of EPAs.

EPAs provide a

forum for dialogue

and exchanges

between the

EU and partner

countries.

The committees provide a forum to discuss any issues concerning the implementation

of the agreements e.g. how to implement some provisions, barriers to trade which

business may face, liberalization schedules, trade and sustainable development.

EPAs also involve enhanced policy cooperation and dialogue on agriculture and

food security, and require transparency on domestic support for the farming sector.

Rules of origin and other customs issues are discussed in the special committees on

customs and trade facilitation.

The reports of the meetings are published on the DG TRADE website.

The EPA with the CARIFORUM countries includes a functioning civil society

consultation mechanism that gathers civil society from the EU and the CARIFORUM

states. It meets on a regular basis in parallel to the oﬃcial Trade and Development

Committee. This provides for a direct opportunity for stakeholders to raise their

issues of concern. In the other EPAs, the process of establishing similar civil society

mechanism is ongoing.

In 2019, the EU also organised an informal technical group on sustainable

development in Côte d’Ivoire, where civil society exchanged their views on how

to address sustainability issues under the EPA. The multi-stakeholder dialogue on

the Sustainable Cocoa Initiative is another example of the importance of the direct

involvement of civil society.

5. Regional integration

EPAs bring together smaller markets in larger EPA regions that were established

by the ACP countries themselves, thus building on the existing regional economic

communities. Regional preference clauses in EPAs set out that countries in the same

region should provide at least the same advantages to each other as they do to the

EU. EPAs are therefore as much about regional trade between the parties to an EPA

as they are about trade with the EU.

While economic integration is a choice of the ACP countries, the EPAs and

accompanying development assistance from the EU can support these

processes. This regional opening and integration is a big business opportunity to

expand trade beyond the limits of one country and achieve economies of scale.

Rules of origin in EPAs allow companies to more easily source inputs from other EPA

locations without losing their duty free access to the EU.

Some EPAs include

civil society

consultations and

technical groups

on sustainable

development.

Economic Partnership Agreements (EPAs) - Meetings and documents - Trade - European Commission (europa.eu)

Sustainable Cocoa Initiative

The Sustainable Cocoa Initiative is an

initiative of the EU which brings together

stakeholders in the cocoa supply chain in

West Africa to discuss how to improve the

sustainability of cocoa production. The

Initiative has three main objectives: a)

to ensure a living income for farmers, b)

to eliminate child labour, c) to eliminate

deforestation.