Contents Abbreviations and Acronyms ix Executive Summary Broad findings How soon w ill commitments bite? The answer on tariffs is not soon The answer fo r other provisions is less certain The costs of leaving Regional impact xi xi xii xiii 1 Introduction 1 1.1 Scope of the project 1 1.2 Scope and structure of the report 2 Part A. Main Principles for Trade in Goods 2 Liberalisation Commitments in the Main CARIFORUM EPA Text 6 2.1 Border restrictions 6 2.7.7 The liberalisation approach 6 2.7.2 Implementation period and fle x ib ility 7 2.1.3 Export restrictions 8 2.2 Common provisions 8 2.2.7 MFN clause (part I, article 19) 9 2.2.2 M ultilateral and bilateral safeguards 10 2.2.3 Infant industry protection 10 2.2.4 N on-tariff barriers and subsidies 10 2.2.5 Customs and trade fa cilita tion 11 2.2.6 Agriculture and fisheries 11 2.2.7 Technical barriers to trade and sanitary and phytosanitary 11 standards 3 Liberalisation Commitments in the Main Pacific IEPA Text 12 3.1 Review of ta riff concessions 12 3.2 Export duties 12 3.3 Free circulation of goods 12 3.4 MFN clause 12 3.5 Infant industry protection 13
3.6 Customs co-operation 13 3.7 Technical barriers to trade and sanitary and phytosanitary standards 14 3.8 Institutional provisions 14 3.9 Rendezvous clause 15 Part B. Tariff Removal Commitments 4 The EPA Liberalisation Commitments 18 4.1 Approach and methodology 18 4.7.7 Approach 18 4.1.2 Methodology 19 4.2 Liberalisation in the two Pacific states 23 4.2.7 Overview o f Fiji Islands ta riff liberalisation towards the EU 23 4.2.2 Overview o f Papua New Guinea s ta riff liberalisation towards the EU 25 4.3 Liberalisation by CARIFORUM states 28 4.3.7 One liberalisation schedule or many? 28 4.3.2 Terminology 33 4.3.3 How the impact o f the EPA w ill vary between states 33 4.3.4 Summary o f 2009 liberalisation 36 4.3.5 Timetable fo r m ajor liberalisation 38 4.3.6 Exclusions from liberalisation 40 4.4 Para-tariffs and non-tariff barriers 40 4.5 Hypothetical revenue loss from liberalisation 41 5 The Treatment of Exports 45 5.1 The EU ta riff regimes on ACP exports 45 5.2 The cost of losing preferences: the Pacific states 46 5.2.7 Fiji Islands 46 5.2.2 Papua New Guinea 47 5.2.3 Conclusions fo r the Pacific states 54 5.3 The cost of losing preferences: CARIFORUM 54 5.4 The additional export advantages of DFQF access 59 5.4.7 Which Pacific and CARIFORUM states w ill gain? 60 5.4.2 Rules o f origin 61 Part C. Services 6 Services Provisions in the CARIFORUM EPA 64 6.1 The approach to liberalisation 64 6.7.7 Structure o f the EPA text 64 6.1.2 National treatment and MFN 66
6.7.3 Social and labour Standards 66 6.1.4 Regional provisions 66 6.2 Horizontal services com m itm ents in the EPA 66 6.2.7 Commercial presence - WTO GATS mode 3 66 6.2.2 Cross-border supply and consumption abroad - WTO GATS 67 modes 7 and 2 6.2.3 Presence o f natural persons - WTO GATS mode 4 68 6.2.4 Protocol on Cultural Cooperation 69 6.3 Sectoral services com m itm ents in the EPA 69 6.3.7 Computer and courier services 69 6.3.2 Telecommunications 69 6.3.3 Financial services 70 6.3.4 International m aritim e transport services 70 6.3.5 Tourism services 70 6.3.6 Development co-operation 71 6.4 Concluding remarks on services 72 Part D. Conclusions 7 Broad Findings 76 8 What Happens Next? 78 References 82 Appendices 1 Summary of Key Provisions in the CARIFORUM EPA Text 83 2 Summary of Key Provisions in the Pacific IEPA Text 89 3 Comparative Structure of the CARIFORUM and PACP EPAs 92 4 Summaries of Individual CARIFORUM States Market Access Schedules 95 5 Summaries of Individual CARIFORUM States Exclusions 110 6 Broad Composition of Individual CARIFORUM States Exclusions 115 7 Loss of EU Preferences - The Broad Picture fo r Individual CARIFORUM States 123 8 Individual CARIFORUM States Exports That Would Face Tariffs Outside 128 an EPA Tables 3.1 Provisions on SPS and TBT in the PACP EPA (Annex IMA and NIB) 14 4.1 Summary of Fiji Islands market access schedule 23 4.2 Summary of Fiji Islands exclusions 24 4.3 Broad com position of Fiji Islands exclusions 24
4.4 Summary of Papua New Guinea s market access schedule 25 4.5 Summary of Papua New Guinea s liberalisations 26 4.6 Summary of Papua New Guinea s exclusions 28 4.7 Broad composition of Papua New Guinea s exclusions 28 4.8 Illustrative example of the CARIFORUM ta riff liberalisation schedules 30 4.9 Distribution of goods between liberalisation tranches in the norm 31 4.10 Breakdown of individual country variations from the norm 32 4.11 Percentage of lines being liberalised w ithin each tranche which are different 35 from those being liberalised in the same tranche in the norm 4.12 Exceptions to the CET after fu ll EPA im plem entation 36 4.13 Summary of CARIFORUM 2009 liberalisations 37 4.14 Proportion of im port value accounted for by items with ta riff of 20 per cent 39 or more (or specific duty) 4.15 Broad composition of exclusions (by FIS section) 40 4.16 Hypothetical revenue loss in CARIFORUM 44 4.17 Hypothetical revenue loss in Pacific countries 44 5.1 Fiji Islands: losing EU preferences - the broad picture 47 5.2 Fiji Islands: exports that would face tariffs outside an EPA 48 5.3 Papua New Guinea: losing EU preferences - the broad picture 54 5.4 Papua New Guinea: exports that would face tariffs outside an EPA 55 5.5 Summary of GSP/MFN impact on CARIFORUM states 58 5.6 Countries which export goods affected by DFQF access 60 6.1 Summary of CARIFORUM - EC services EPA 71 Figures 4.1 Example of the EU s HS-CN hierarchy 20 Boxes 4.1 Main data caveats and assumptions 21 4.2 The task of calculating EPA revenue effects 43
Abbreviations and Acronyms A C P A fric a n, C aribbean and P acific A o A A g re em ent on A g ric u ltu re C A R IF O R U M C aribbean Forum C E T com m on extern al ta riff C R N M C aribbean R egional N e g o tia tin g M a ch in e ry D FQ F duty-free and quota-free E B A E ve ryth in g b u t A rm s EC European C o m m u n ity EPA E conom ic P artnership A greem ent E U European U n io n F T A free trade agreem ent G A T S G eneral A g reem ent o n Trade in Services G A T T G eneral A g re em ent o n Tariffs and Trade GSP G eneralised System o f Preferences FIS H arm onised System IE P A In te rim E conom ic P artnership A gre em e nt IIP in fa n t industry p ro te c tio n IM F In te rn a tio n a l M o n e ta ry Fund L D C least developed co u n try M F N m ost-favoured-nation N T n a tio n a l tre a tm e n t N T B n o n -ta riff barrier O D I Overseas D e velopm e nt In s titu te P A C P P acific A C P P N G Papua N e w G uinea P N K k in a (Papua N e w G uinea) R & D research and developm ent R oo rules o f o rig in S M E sm all and medium -sized enterprise SPS sanitary and phytosanitary standards T B T te ch n ica l barriers to trade T P R T ele co m m u n ica tio n Reference Paper (G A T S ) T Q ta riff quota W T O W o rld Trade O rg aniza tion