EXECUTIVE SUMMARY.

If you are a small scale farmer in Kenya, Uganda or Tanzania, you are impacted by international trade agreements. Some of you grow crops for export, such as tea and coffee; with export crops, it is easy to see how the degree that a country like the UK opens up its markets to exports directly impacts you. If the UK agrees not to charge tax on coffee coming from East Africa but does charge tax and other fees on coffee from other countries, East African coffee growers have an advantage. And if the UK doesn’t charge a tax for unprocessed coffee but does require the East African exporters to pay a tax for processed or packaged coffee, East African coffee growers are at a disadvantage if they want to add value to their coffee. 

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The Economic Partnership Agreements (EPAs) small-scale farmer concerns

The African, Caribbean and Pacific (ACP) countries and the European Union are engaged in trade negotiations that will reform their current preferential non-reciprocal trade arrangements. Since the seventies, ACP countries have benefited from preferential trade arrangements with the European Communities, under which most ACP products could enter the European markets with minimal restrictions. With the signing of the Cotonou Agreement in 2000, the ACP countries and the European Union (EU) agreed to set new trade arrangements that would build on the regional integration process of the ACP and foster their integration in the world economy, in a way that promotes their development and contributes to poverty alleviation. This new ACP-EU trade regime is also expected to be compatible with the non-discrimination rules of the World Trade Organisation (WTO).

To engage in the process, ACP countries formed six regional groupings and began negotiations with the EU in September 2002 on Economic Partnership Agreements (EPAs), which will enter into force by 1 January 2008. These EPAs will be free trade areas (FTAs) between each of the 6 ACP regions and the EU, addressing both trade and trade-related issues. Therefore, for the first time the ACP countries will have to open up on a reciprocal basis their markets to most EU products.

Our Concerns:

Trade liberalisation as negotiated in the context of EPAs have the potential to have significant effects on the ACP economies:

• While EPAs should be designed to promote the development of the ACP countries and regions, they have some serious negative side effects, notably in terms of the adjustments costs to trade liberalisation. In particular, all ACP countries will lose fiscal revenues as a result of the elimination of customs duties on imports from most EU products under an EPA. For some countries, this loss of trade taxes will significantly reduce government revenues; hence limit their public spending. This will in turn have drastic consequences on low-income (often already highly indebted) countries and their ability to pursue effective social and development policies.

• In agriculture, EPAs have the potential of stifling ACP governments right to support farmers through the use of possible trade instruments available to protect their agricultural sector.

• ACP members will be faced with increased competition from highly subsidized EU agricultural commodities such as maize, wheat, cereal, milk and milk products, rice, sugar, tomato paste, poultry, flour, even meat and meat products and cotton. The EU has been reluctant to discuss subsidies within the context of EPA negotiations.

• Farmers will be prevented from moving up the value chain through the processing of their products, as their governments will under an EPA lose the ability to apply tariffs on EU imports to allow their agro-processing industries to grow.

• ACP negotiators are in the on-going negotiations being forced to choose between the competing interests of manufacturing, government revenue, jobs and agriculture. The available limited policy space to protect all that ACP countries need to protect from dumping is under serious threat from EPAs.