Working Papers

Safeguards and trade remedies in the SADC and ESA Economic Partnership Agreements

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30 Sep 2009

Author(s): Gerhard Erasmus

This paper discusses the “Trade Defence Instruments” in the Economic Partnership Agreements (EPAs) currently being negotiated between the European Union (EU), on the one hand, and different configurations of ACP (African, Caribbean and Pacific) countries on the other. These “instruments” cover remedies against unfair trade practices (anti-dumping and countervailing measures) as well as safeguards. ACP concerns about infant industry protection, food security and agriculture are also on the agenda.

The use of “contingency measures” has increased generally, inter alia because of the global economic slump. These measures include anti-dumping and countervailing duties imposed by recipients of illegally subsidised exports, as well as safeguards, which are temporary protections that countries can offer to vulnerable domestic industries. The 2009 WTO World Trade Report notes that there are dangers involved in the use of such measures: “The core challenge in the design of these measures is to make them flexible enough to be useful, but not so flexible as to undermine the integrity of an agreement,” said WTO Director-General Pascal Lamy, when he spoke at the launch of the Report in July 2009. “The need for this balance has sometimes been a key issue in negotiations.”

Developing countries are particularly concerned about the availability of safeguards – as demonstrated by the final debates in the Doha Round of negotiations just before those talks broke down in July 2008. The immediate technical problem was the insistence by certain developing nations that a special agricultural safeguard had to be included. For the ACP nations there is an additional challenge: their preferential access to the EU markets came to an end in December 2007 when the WTO waiver for the Cotonou trade chapter expired. They now have to trade with the EU in terms of WTO compatible EPAs unless they decide to rely on the Generalised System of Preferences (GSP) or (for Least Developed Countries (LDCs)) the Everything but Arms (EBA) arrangement. 

What do the proposed EPA texts provide for in terms of “trade defence” mechanisms and how should the applicable provisions be implemented? Do they cater for the needs of developing countries? Are they flexible enough? Do developing countries have the technical and institutional capacity to implement these measures? What domestic steps are required in order to invoke safeguards and other protective measures? Will they be given special technical assistance in order to develop the required capacity where it is lacking? How do the proposed EPA measures compare with WTO rules on safeguards and trade remedies?

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