Measuring the Challenge: The Most Favoured Treatment Clause in the Economic Partnership Agreements between the European Community and African, Caribbean and Pacific Countries

Abstract

In recent years, the European Community (EC) has concluded several trade agreements with several African, Caribbean, and Pacific (ACP) countries. These agreements, designed as a means to help eradicate poverty through trade and development, are known as Economic Partnership Agreements (EPAs) and provide ACP countries with preferential and differential trade benefits. Each agreement contains most favoured nation (MFN) clauses, providing that the EC must be accorded any more favourable treatment that an ACP country grants to certain third states not party to the EPA falling within the agreement's definition of a 'major trading economy'. These third states, or 'major trading economies', include less developed emerging economic powers. This paper examines potential challenges to the EPAs' MFN clauses, providing an in-depth factual analysis of the MFN clauses and a determination of possible ways for disputes to arise mainly under World Trade Organization (WTO) law and, to a lesser extent, within the EPA dispute resolutions provisions. The major case study is the MFN clause contained in the EC-Caribbean Forum (CARIFORUM) agreement, but the similarities in MFN provisions make the arguments generally applicable across the spectrum of EPAs concluded between the EC and ACP countries.