Stop EPAs - questions and answers

Economic Partnership Agreements (often shortened to EPAs) are trade deals being negotiated between the European Union (EU) and 76 poor countries – mostly former colonies in Africa, the Caribbean and Pacific (known as the ACP). The deals are extremely important as they will lay the rules of trade between Europe and these countries for decades to come and affect the lives of millions of people. They are also highly controversial.

For the last 30 years the EU and ACP have had a series of five-year agreements that set the framework for their political and economic relationship. Under these agreements the EU have been giving ACP countries preferential access to their markets on the goods they export. But this preferential treatment has been declared incompatible with the rules of the World Trade Organisation (WTO).

At the time of writing, 36 countries have ‘initialled’ an EPA. Trade negotiators initial the deals when they reach agreement and they are later formally signed by trade ministers. No countries have officially signed an EPA yet.

EPAs are 'free trade' agreements. That means both sides agree to reduce the taxes (known as tariffs) on goods coming in. This might all sound good in theory but free trade is only fair when all sides are equal and the EU and ACP are far from equal partners.

The countries that have initialled an EPA are committed to slightly different things. However, because the EU has been pushing a blanket free trade agenda, the deals are not as different as you might expect for regions as diverse as, for example, the Caribbean and Central Africa.

The impact could be devastating. EPAs will force poor countries to 'liberalise' their economies too fast and too much. Experience from similar deals in the past shows that EPAs will result in:

• Job losses: poor countries will face direct competition with goods from Europe before they are ready, destroying local industries, resulting in huge job losses.

• Loss of sovereignty: legal commitments to look after the rights of overseas investors, ahead of local laws to protect workers and the environment. These could also override poor countries' own plans for development.

• Less government income: a huge reduction in government revenue because of reduced taxes on imports into poor countries. This will mean there's less money for investing in health, education and infrastructure like electricity cables or new roads.

'Trade liberalisation' is the term for the process whereby a country opens up its markets to international trade i.e. reduces the taxes (known as tariffs) and other limits (such as quotas) on goods coming in. It also often comes alongside increased rights for investors and pressure to privatise its economy.

It is not too late to right the wrongs of the deals that some countries have initialled. Legally, there are clear opportunities to renegotiate the deals and the ACP has already requested this, but we need political commitment from the European states to make this happen.

Ultimately, poor countries were left with no choice. The whole process for negotiating EPAs could not be further from the spirit of ‘partnership'. Poor countries voiced their concerns many times throughout the negotiation process but the EU failed to respond. Instead the EU exerted huge pressure, even reportedly threatening to make poor countries' aid conditional upon signing.

Countries such as Nigeria that have not initialled an EPA are now facing a tax hike on key products this has already begun to bite[1] so they now face even greater pressure to sign a deal.

The exceptions are the Least Developed Countries, who can keep exporting freely to Europe under a different trade agreement called ‘Everything but Arms’.

The EU’s official public position on EPAs is that they were necessary to comply with WTO rules and that the deals would be good for development.

However neither of these claims hold water:

• There were other legally viable alternatives to EPAs which the ACP requested and the EU could have pursued;
• The proposals the EU put forward have been cited as anti-development by an impressive and wide-ranging group including the United Nations, the World Bank, academics from the EU and ACP and non-governmental organisations in Europe and worldwide.

In December the UK government claimed that the current agreements were a success but our analysis reveals a huge gap between the EPAs that have been initialled and the kinds of deals the Government said it would support.

The UK government has promised repeatedly that poor countries should not be forced into trade agreements which would undermine their development and in 2005 it issued a position statement on EPAs saying it believed poor countries should not be forced to liberalise their economies. But the ACP countries that have initialled EPAs are being forced to do just that.

Yes! Half the ACP countries haven’t signed yet, and those that have may be able to revise the agreements and make them better for development. We also need to stop the ‘full EPAs’ being pushed through.

A huge amount! When the negotiations started we knew it would be an uphill battle. But the deals could have been much worse and we have shone a spotlight on some of the most important but secretive decisions being made in the world today. Thank you for your part in it.

Yes. We will continue to work on EPAs as long as we can improve the outcome for people living in poverty. There will be more actions to come throughout 2008 whenever public pressure can make a difference. And we will continue to work behind the scenes, monitoring the negotiations and lobbying privately with the UK government and other key players.