Brazil says a Most Favoured Nation (MFN) clause in the European Union’s EPAs which several African, Caribbean and Pacific (ACP) countries recently agreed to could discourage them from pursuing deeper trade integration with other developing nations.
Under the MFN clause, ACP countries that signed the Economic Partnership Agreements (EPAs) are required to extend to the EU any deeper market access terms that they may negotiate with other significant economies. Brazil government officials voiced their concerns about this clause at the February 5 session of the World Trade Organisation (WTO) General Council meeting. It submitted that the MFN clause runs counter to a WTO principle aimed at increasing poor countries’ participation in global commerce. Brazil says it has a direct interest in the MFN clauses as they would affect them if they were to negotiate a free trade agreement with any ACP country that already has an EPA with the EU.
Brazil’s objection to the clause comes in the wake of objections raised by some Caricom heads including President Bharrat Jagdeo who expressed dissatisfaction with the outcome of the negotiations. Some prominent citizens of the region are also calling for a review of the EPA that Cariforum (Caricom member states and the Dominican Republic) has initialled with the EU.
Meanwhile, at the 24th Special Meeting of the Council for Trade and Economic Development (COTED) held recently in The Bahamas, Caricom Secretary-General Edwin Carrington said the review of Caricom’s preparation for, approach to and conduct of future external trade negotiations has assumed added significance with the completion of the EPA negotiations. Carrington said that at the 24th Meeting of the COTED, the council mandated an independent and thorough review of the process involved in conducting the EPA negotiations. This directive was to determine the priority and schedule that should lead the Caribbean Regional Negotiating Machinery (CRNM), Caricom Secretariat and other institutions and officials of member states with respect to external trade negotiations and of existing trade agreements. It was expected that issues that Brazil raised at the WTO General Council would have been discussed at the COTED meeting held in Guyana last November 13 and 14.
Brazil’s concerns, though downplayed by the EU, according to the International Centre for Trade and Sustainable Development (ICT&SD) in the United Kingdom, underlined the MFN clause as another potential source of tension between the rapidly growing number of bilateral and regional trade arrangements and multilateral trade rules. Brazil contends that the MFN clause leaves ACP countries “no incentive to negotiate agreements with other developing countries con
