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Policy Space in Economic Partnership Agreements (EPAs): the possibilities for African, Caribbean and Pacific (ACP) countries to exempt products from liberalisation committments under asymmetric EPAs

This study provides some quantitative indicators of the extent to which EPAs will constrain the ability of ACP states to protect sectors currently protected by high tariffs. Using a detailed ODI methodology and database designed for EPA-related work, the study calculates for each country the share of its imports that would need to be liberalised in order to meet the EU’s interpretation of the WTO requirement that ‘substantially all’ trade is liberalised. It then identifies which goods would be excluded from liberalisation if countries chose to exclude the items currently protected by the highest tariffs. This indicates, country by country, whether some, most or all high tariff items can be excluded and, hence, whether governments will lose much, some or little policy space in relation to protecting domestic producers. It then applies these findings at the regional level to determine the implications of excluding each country’s ‘sensitive’ sectors from liberalisation.

It concludes that if EPAs comprise a set of separate national liberalisation schedules and ‘substantially all’ trade is calculated on a bilateral basis it is possible for almost all the ACP states for which data are available to shield from liberalisation all the agricultural goods that they currently protect with significant tariffs; many can also shield all high-tariff non-agricultural goods as well and any liberalisation that does occur can be deferred for well over a decade.

If EPAs comprise a region-wide liberalisation schedule major compromises will need to be made by countries which currently have very dissimilar tariff policies, and until these are made it is impossible to determine whether or not policy space would be constrained. The most ‘inherently problematic’ aspect of EPAs appears to be the task of creating a single liberalisation schedule for all ACP members.

Staff

Jane Kennan

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