MFN in the CARIFORUM-EC Economic Partnership Agreement: Policy Blunder or Legal Inconsistency?

Abstract

The Carribbean Forum-European Communities (CARIFORUM-EC) Economic Partnership Agreement (EPA) represents a new era of development cooperation and trade relations between the European Union (EU) on the one hand, and a subgrouping of the African, Caribbean, and Pacific (ACP) group of countries on the other hand. The inclusion of Most Favoured Nation (MFN) clauses in the EPA, which require CARIFORUM countries to extend to the EU any more favourable treatment granted to third parties in future Free Trade Agreements (FTAs) has generated some controversy. This note critically examines the arguments that have been levelled against the inclusion of these clauses from legal and policy perspectives. Notwithstanding the often nebulous distinction between law and policy, it will be argued here that questions of policy and issues of law must be bifurcated in order to meaningfully assess the value of MFN clauses in the EPA. A paradigm for assessing such clauses in other so-called North-South FTAs is also suggested.