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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

Research reports

Written by Chris Stevens, Jane Kennan

This report 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. The report contains  calculations, acquired by sing a detailed ODI methodology and database designed for EPA-related work,  for each country’s share of imports that would need to be liberalized in order to meet the EU’s interpretation of the WTO requirement that ‘substantially all’ trade is liberalized. It then identifies which goods would be excluded from liberalization 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 liberalization.
It concludes that if EPAs comprise a set of separate national liberalization 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 liberalization 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 liberalization that does occur can be deferred for well over a decade.
If EPAs comprise a region-wide liberalization 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 liberalization schedule for all ACP members.

Chris Stevens and Jane Kennan