`Aid for trade` to implement EPAS
 
2008-05-11 11:05:57
By Theo Mushi

EU has told ACP countries not to be put off from signing EPAS on account of the large implementing and adjustment costs. EU has promised that countries signing an agreement would benefit from EU financial and technical assistance.

This assistance is aimed to address the supply side constraints that have historically hampered trade and implementation development in ACP to upgrade productive capacities and to develop trade related infrastructure in a way that ACP countries can take advantage of EPAS.

EU financial and technical assistance will support the costs ACP countries will face in adjusting to the new economic conditions introduced by EPAS.

It will also support ACP governments in the implementation of the EPAS rules, the establishment of new institutions and the enactment or reform of legislation to comply with EPA obligations.

ACP - EU negotiations will have to determine what will be the total implementation and adjustment costs related to an EPA in ACP countries and of equal importance is how much aid has EU committed to assist ACP countries to face these costs.

Equally important is what are the instruments through which such financial assistance will be channeled and what are the conditions of access to these funds.

Last but not least ACP negotiators would like to know how effective is the EDF as an instrument for disbursing aid and how does it match the needs of ACP countries if they sign on EPA.

Representatives of the private productive sector may be also lured into signing EPAS as some explicit Aid flows to improve the local trade - related infrastructure.

``Aid for Trade`` is the term often used to describe aid packages that channel financial resources to countries to ease their costs of adjustment to trade liberalization and to increase their capacity to supply goods and services and to improve trade related infrastructure.

Supply side constraints include physical, human and institutional barriers which affect the competitiveness of a country`s domestic production and its ability to trade.

It also involves capacity building to help increase the capacity of developing countries to deal with trade policies, rules disputes, through the training of government officials.

The signing of EPAS is expected to trigger many types of costs. The elimination of tariffs applied to imports from EU will generate loss of fiscal revenue.

The size of that loss is substantial for most ACP countries since tariffs usually constitute a major source of government resources and can be very high for countries mostly trading with EU.

Theo Mushi is a wrtiter on Economic issues

• SOURCE: Sunday Observer