EU PTAs as as a foreign policy tool: Promoting Regional Integration and Sustainable Development: Lessons from EPAs
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EU PTAs as as a foreign policy tool: Promoting Regional Integration and Sustainable Development: Lessons from EPAs

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San Bilal, ECDPM

San Bilal, ECDPM
Conference on Global Europe: The New Generation of EU Preferential Trade Agreements
European University Institute (EUI)
14-15 May 2012, Florence

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EU PTAs as as a foreign policy tool: Promoting Regional Integration and Sustainable Development: Lessons from EPAs EU PTAs as as a foreign policy tool: Promoting Regional Integration and Sustainable Development: Lessons from EPAs Presentation Transcript

  • EU PTAs as a Foreign Policy ToolPromoting Regional Integrationand Sustainable Development: Lessons from EPAs Dr. San Bilal Head of Programme, Economic Governance, ECDPM
  • Trade in EU Foreign Policy •  Core element of foreign policy •  Means to secure prosperity, jobs and growth in Europe •  Proliferation of FTAs in recent years •  Operational FTAs account for approx 30% of EU trade •  And major trading partners (China, US, Japan, Russia, Australia-NZ) representing approx 50% of trade, not covered by FTAsECDPM Page 2
  • Increasing number of PTAsECDPM Page 3 Source: WTO World Trade Report 2011
  • Membership in PTAs in force, 2010ECDPM Page 4 Source: WTO World Trade Report 2011
  • EU FTAs: in force and plannedECDPM Page 5
  • Key challenges: Changing geopoliticsEU’s share of world trade on the decline – expected to be cut by half by 20502010  2030 Source: Buiter W and Rahbari (2011): Trade Transformed: The Emerging New Corridors ofECDPM Trade Power, Citi GPS: Global Perspectives & Solutions Page 6
  • Re-focusing of Trade Policy •  Priorities – FTA negotiations (with emerging) – India, ASEAN, Mercosur, Andean, Canada, … US?  Focus on economic interests •  For developing countries: differentiation and asymmetry   GSP reform as a means to focus on most needed   ongoing EPA negotiations  Focus on development (?)ECDPM Page 7
  • EPAs and Regional integration EPA Key Objectives: •  Foster Development •  Building on regional markets •  Stimulating investment •  Locking-in of trade reforms •  Integration into world economy •  Compatible with WTO rulesECDPM Page 8
  • Regional Integration (RI): What role for EU trade policy? •  EU belief in Regional integration principles •  EU support to RI (EDF RIP, AfT, etc.) •  Challenges: •  Coherence of regional partners (diverging interests) •  Capacity: low absorptive capacity, few bankable projects •  Recently, Commissioner Pielbags announced drastic cuts in regional envelopes for 11th EDF due to low utilisation. This might undermine some regional projects (infrastructure)ECDPM Page 9
  • EPA negotiation process •  09/2002 – 09/2003: All ACP negotiations •  10/2003 – 2007: Regional negotiations  ECOWAS+: West Africa  CEMAC+: Central Africa  ESA: East and Southern Africa  SADC: Southern Africa  CARIFORUM: Caribbean  Pacific Forum: Pacific •  End 2007: some (interim) agreements concluded (35 countries out of 79) •  1 January 2008: end of Cotonou preferences; end of WTO waiver; MAR 1528 on EPAs (DFQF) •  Since 2008: Continuation EPA negotiations •  September 2011: Proposal for deadline to 2014 forECDPM Page 10 MAR 1528
  • Impact on regionalism •  Little coherence between the interim EPAs concluded and the regional integration processes in Africa:   Countries having initialled interim EPAs   Liberalisation commitments   Regional integration agenda: problem for CUs •  4 trade regimes with EU (in one region):   IEPAs   EBA for LDCs   GSP for non-LDCs   FTAs (e.g. RSA, Egypt, …)ECDPM Page 11
  • Regional Integration in Africa •  Low level of intra Africa trade •  On average: 13.1% in 2010 compared to more that 60% in Europe or 35% in NAFTAECDPM Page 12 Source: www.regionswatch.blogspot.com, 2010
  • Key challenges: Overlapping membership Overlapping mandates Competing and conflicting agendas Level of implementation of commitments varyECDPM Source: www.regionswatch.blogspot.com, 2010 Page 13
  • EPAs: what impact for Regional Integration and beyond? Stimulate focus on regional integration dynamics Boomerang effect •  Although negotiations continue, it is increasingly felt that timing and sequencing of trade agreements with third parties should be based on RI agenda and not the reverse •  Priority therefore given to regional agenda by many RECs. For EPA, this is particularly relevant for services and other trade-related issues. •  E.g COMESA services negotiations launched in September 2009 as a way of preparing a common stand for EPA services negotiations; EPA competition clause is based on COMESA competition policy etc. Increased complexity of RI (spaghetti bowl)ECDPM Page 14
  • ECDPM Page 15
  • But also broader issues: •  Disillusion between expectations and results •  Lack of interest: Many countries seeking status quo and little appetite beyond market access •  Lack of incentives: Flaws in EU’s own trade policies: EBA given to all LDCs in 2001 + improved RoO in 2011; LDCs have no interest to sign EPAs and some RECs mainly LDCs On December 2011, at WTO improved market access in services granted to LDCs. Will have an impact on future services negotiations •  Lack of political traction on both sides and no political will to find mutually acceptable agreement on contentious issuesECDPM Page 16
  • •  Lack of consensus on shared vision: Not necessarily a consensus on either side on what a good development policy is or whether EPAs are good for RI and development or not. Irrespective of economic merits, arguments from the EC side had little convincing effects, given differences in interests and perception of what EPA was and would achieve •  Shifting attention towards emerging players: China, India, Brazil, etc. increasingly perceived as a complement or even alternative to EU (economic interests + win-win rhetoric) •  Political risks: MAR regulation. Deadline is 2014. Might call political tensions. It might antagonise theECDPM entire relationship between EU and Africa Page 17
  • Lessons from EPAs… •  Negotiating at regional level is complex •  Importance of political will, interest, experience and capacity of regional grouping •  Need for regional leadership (and national champion) and cohesive regional agenda •  Timing and sequencing of FTA with RI process(es) •  Adjust ambitions to realities: focused agenda •  FTA not just about trade: political dimension key " importance of economic diplomacy •  Credibility Gap between rhetoric and effective partnership •  Importance of recognizing mistakes and willingness toECDPM Page 18 adjust: not the case in EPAs so far…
  • Thank you San Bilal (sb@ecdpm.org) andIsabelle Ramdoo (ir@ecdpm.org) www.ecdpm.orgwww.slideshare.net/ecdpm Page 19