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Overview of the SADC and ESA EPA and their impact on sub-Regional livelihoods in agriculture and fisheries

Talitha Bertelsmann-Scott

Mthente Research and Consulting Services

23 October 2006

Regional Round Table on Economic Partnership Agreements (EPAs) and Poverty Reduction.
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For the purposes of this SARPN conference I've been asked to look at a number of interlinked issues, namely the current draft ESA EPA agreement, the SA-EU TDCA (as a template for the SADC EPA), which was concluded in 1998 and fully implemented in 2004, and to assess their impact on sub-regional livelihoods in agriculture and fisheries. In addition, I've been asked to look at the poverty eradication implications of the two agreements.

Background Context

When examining the Economic Partnership Agreements (EPAs) and the effects they are likely to have on poverty eradication and development, it is important to also note the context within which they are being negotiated. Trade preferences are being eroded globally through various processes and the ACP is affected in three distinct ways: firstly, through multilateral processes, in other words through negotiations at the WTO and agreements reached there. All ACP countries are currently members of the WTO and are, therefore, legally bound to its agreements. Secondly, the ACP is affected by bilateral trade agreements, not only those negotiated between themselves and third parties, but significantly also by agreements the EU is currently negotiating outside the ACP group. Thirdly, the ACP will be affected by the EU's reform of its Common Agricultural Policy (CAP). CAP reform for the ACP group is double-edge sword, as some states did benefit extensively from some of its provisions, whereas others were adversely affected by domestic subsidies paid to EU farmers and the effects of these on market prices.

In effect, the EPAs are a contributing element to the three processes mentioned above. It is also worth remembering that during the time that the ACP benefited from trade preferences granted under the LomР№ Conventions the ACP group as a whole only became poorer and LomР№ should, therefore, be considered a failure as a development tool. When we are concerned about tariff liberalisation processes, it is also important to keep on asking who benefits from tariff protection. Clearly government revenue is affected and by implication the societies they govern, but tariffs generally protect large farmers that are well-equipped, strong players in the international arena. Subsistence farmers and small farmers exclusively producing for the local market are only affected by tariffs in a very limited way. In other words, agriculture - in its very broad definition - will be affected by the EPAs in very different ways. We have to be clear about which areas in we consider threatened by the EPAs and which of our agricultural interest will actually benefit from liberalisation. Once this analysis has been done, the CSO community should think of innovative ways in which agriculture could benefit from an EPA agreement.

Several studies have been done on the impact of potential EPAs on the ACP states and they all vary in their outcomes. It is as yet unclear what the precise impact of the EPAs will be, as the details of the agreements are still outstanding. Although the ESA EPA group has a draft text, tariff schedules have yet to be decided on. And whereas the SADC EPA group has worked out their schedules, nothing has been agreed on internally either at this point. So, how can we determine whether the EPAs do indeed pose a threat to sub-regional livelihoods in agriculture and fisheries?

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