Using the space created by the interim EPAs

By Dr Clive Thomas

Collateral damage of the EPAs

Beyond the three markers (signposts) of the roadmap sketched in last week’s column, there are a number of economic, legal and other technical considerations, which are vital ingredients for forging a successful way forward in 2008 and beyond. The first of these is that an important study (Bouêt et al, 2007) has established for the EPAs that when subjected to the customary multi-sector, multi-region/country (computable general equilibrium model) assessment of trade policy effects, the data show that full implementation (2035) of the EPAs as proposed by the EU, yield an increase of EU exports to the ACP countries of 29.4 billion euros but a decline of 6.5 billion euros for the rest-of-the-world’s exports to the ACP. These are substantial trade-diversion effects and if only partially true, will produce substantial distortions and welfare losses to the ACP as a result of the large subsidies and economic rents implicit to the ACP granting substantial bilateral preferences to the EC. This would be unacceptable to the ACP and the rest-of-the-world.