My Department has received a copy of the British Commonwealth Secretariat report referred to by the Deputy. My own Department has commissioned research on the fiscal impact of the Economic Partnership Agreements (EPAs), including on our Programme Countries. While it is clear that the EPAs will entail adjustment costs, I am not convinced that the cost assessment undertaken in the Commonwealth paper is accurate. The Commonwealth study includes a number of questionable assumptions. For example, it appears to overestimate the reliance of African, Caribbean and Pacific (ACP) States on customs duties and assumes rapid liberalisation of imports from the EU. Until draft EPAs are available for all six EPA regions, which will include timetables for liberalisation, it will be difficult to make accurate estimates of the adjustment costs involved.
It should also be emphasised that the EPAs will bring benefits as well as costs. These agreements are intended to reverse the marginalisation of ACP States from an increasingly globalised economy. By enlarging ACP markets through regional integration, and by making regulatory frameworks in these countries more transparent, EPAs can create an environment conducive to the private sector and thus function as a vehicle for long-term economic development. Increased trade and economic development will help to offset the adjustment costs entailed by the EPAs. At the ACP-EC Council of Ministers meeting in Papua New Guinea on 1-2 June, the EU made a written declaration on the EPAs. In the declaration, the Commission reconfirmed that the gradually arising needs from the implementation of EPAs will be taken into account in the programming dialogue with the ACP on the end of term review of the 9th EDF and on the resources of the 10th EDF, covering the time period after the entry into force on 1 January 2008. The EU also recalled its commitments to substantially increase Aid for Trade by 2010 in addition to EDF resources.
