TERMS OF REFERENCE
Economic Partnership Agreements, Global Value Chains and Aid for Trade
Background
The evolution of Economic Partnership Agreements (EPAs) – reciprocal Free Trade Areas (FTAs)
between the EU and ACP which date from the mid-1990s – is interesting from several perspectives. It
originates in adverse judgements by the GATT/WTO over Europe’s trade preferences and the adoption
by Europe of ‘the Washington consensus’, which favoured open trade regimes to promote development
(Stevens, 2011). The end of the non-reciprocal trade regime known as the Cotonou Partnership
Agreement (CPA) on 31 December 20071 has meant the fragmentation of the ACP group into groups of
countries divided into regions that have either initialled reciprocal FTAs – EPAs – and others which are
granted non-reciprocal market access under the EU’s Generalised System of Preferences (GSP). The
inability to secure agreement on the new regimes under an FTA has, however, meant that deadlines have
shifted from what was originally envisaged.
The new deadline – fixed for October 2014 – however, means that unless agreement on an EPA is
reached, ACP members will revert to exporting under the GSP. This may be problematic for those ACP
members that are not classified as Least Developed Countries (LDCs) which if downgraded to the EU’s
GSP may face an increase in tariffs on selected products and specific value chains that export to the EU.
But it should also be remembered that whatever outcome is finally achieved by October 2014, it is likely
to have implications for the future of regionalism across ACP members.
The trade work of Commonwealth Economic Affairs Division (EAD) attaches special importance to
regional trading arrangements involving Commonwealth Members. In this context, the EPAs related
development are significant to EAD analytical work. EAD wants to commission a study for which the
Terms of Reference are given below.
Scope of Study
The challenge for countries that will be affected by the new deadline for the conclusion of negotiations
(notably non-LDCs) is to reach agreement internally, as well as regionally, regarding the potential costs
and benefits of signing and ratifying an EPA. For countries, the challenge is a regional one: unless all
regional partners can be brought on board with the EPA negotiations and a regional agreement reached,
the process of regional integration could be undermined. For example, the following effects may arise:
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There will be indirect, as well as direct effects on LDCs within Regional Economic Communities
(RECs) if a regional EPA is not agreed, but individual (non-LDC) countries sign and ratify.
There will be changes in the rules of origin applicable to EPA signatories compared to those that
export under the GSP which could affect regional value chains.
For members of customs unions, there will be indirect effects because of liberalisation towards the
EU by non-LDCs that also operate within a customs union with LDCs.
Political aspects will continue until 2020.
Overall three main scenarios are likely by October 2014, which require further analysis and for which an
innovative and mixed research methodology could be developed, including the following:
Scenario One: The ability of non-LDCs to absorb trade shocks on affected products should
agreement on an EPA not be reached.
 Affected products should be identified which requires quantitative analysis of the changes
in tariffs and their potential effects;
 This could be coupled with Global Value Chain (GVC) analysis which is necessarily a
qualitative description of how trade takes place, the actors involved (including numbers
employed), and how trade is governed – including the objectives of lead firms, and their
sourcing strategies. This could help to unveil the extent to which trade shifts induced by a
change in tariffs are likely;
 It could also help to identify areas where trade-related adjustment may be required, Aid for
Trade, or Aid more generally.
Scenario Two: The ability of LDCs to deal with the resultant effects on regional or international
value chains should agreement on an EPA be reached by some members of RECs, but not other
LDCs.
 There will be changes in the rules of origin applicable to EPA signatories compared to those
that export under the GSP which could affect regional value chains;
 LDCs may be affected by barriers to trade if they export anything to the EU in services
under the current regime, which faces most favoured nations (MFN) barriers;
 There will be indirect effects because of liberalisation towards the EU by non-LDCs that
also operate within a customs union with LDCs.
Scenario Three: The effect of agreement reached and implications for the drivers of GVCs and
other regional value chains in operation.
 The removal of tariffs towards the EU and cheaper imports, particularly of intermediate
goods, may stimulate regional value chains, and integration with new value chains.
 Qualitative analysis of the new context including legal text analysis should explore the
potential implications of behind the border measures. This includes consideration of the
potential effects of changes in rules such as: Rules of Origin; Export taxes; Safeguard
mechanisms; Infant industry clause; and Most Favoured Nation clause.
 Analysis of the extent to which new commitments may serve to reinforce existing regional
integration processes and architecture, or undermine it.
Analysis of these three main scenarios and their implications should be undertaken across the ACP EPA
negotiating regions including:
 West Africa;
 Central Africa;
 Eastern and Southern Africa;
 East Africa; and
 South African Development Community
The combination of quantitative and qualitative analysis and development of an innovative research
methodology should be applied consistently across the ACP. Use of the GVC approach should assist the
analysis in terms of focusing on specific country/products combinations and the particular
opportunities/challenges faced. It should identify areas which may warrant further attention, including with
regards to the provision of Aid for Trade. It should also consider the EPA negotiations within the broader
changing landscape of global trade (including the new wage of mega-RTAs).
Specific tasks for the consultant(s)
Given the above scope of the study, this assignment is to critically examine and highlight some of the
broader implications for regional integration and member countries within ACP RECs, if EPAs are
achieved or not by October 2014, particularly from a GVC perspective and also identify areas which may
warrant further attention, including with regards to the provision of Aid for Trade. Particularly, the specifics
tasks for consultant(s) will comprise the following:
1. To review the relevant literature on the evolution of EPAs to take stock of negotiations to date
and provide the likely scenarios for the future.
2. To undertake analysis using appropriate quantitative and qualitative methods to examine the
scenarios described under Section 2 (scope of study) above.
3. The research methodology developed should be applied consistently across the EPA negotiating
regions to shed light on the related trade and economic effects of the three main scenarios
posited.
4. To interview key informants, where necessary, to obtain their insights on negotiating aspects and
elaborate them in the report.
5. To identify policy issues and frame recommendations for immediate consideration.
6. The consultant may be required to make presentation(s) of the study to
meetings/conferences/workshops organised by the Commonwealth.
Expected Output
A comprehensive analytical study addressing all the above issues along with an Executive Summary (67 pages) of the study.
Deliverables/Timeline
The consultant(s) is expected to prepare and submit the first draft of the study by 30 April 2014 and the
final draft, taking into consideration of any comments and suggestions provided, by no later than 30 May
2014.
Person Specifications
The successful candidate is expected to have strong knowledge on the evolution of Economic Partnership
Agreements (EPAs) – reciprocal FTAs between the EU and ACP, particularly in the context of the African
region. The prospective candidate should possess the following experience and qualification:
Essential
 A postgraduate degree, preferably PhD in Economics, International Trade and Economics; or
relevant discipline related to the assignment.
 A minimum of 7 years’ experience in undertaking in-depth economic analysis and providing
expert advice on trade policy in developing countries, particularly Commonwealth countries,
as well as extensive publication on these issues.
 Strong presentation, communication and report writing skills.
 Fluency in written and spoken English.
 Computer skills: word processing, spreadsheet and power point presentations.
Desirable
 Knowledge of international trade and regional integration, particularly regarding Aid for Trade
and value chains.
 Familiarity with the changing global trade landscape.