EPAs: The challenge of Implementation.

The text of the SADC EPA contains a chapter on “Trade Defence Instruments”. The first provision, Article 32, provides as follows: “The rights and obligations of the EC Party or SADC EPA States in respect of the application of antidumping or countervailing measures shall be governed by the relevant WTO Agreements. Any disputes related to these measures can only be settled through WTO Dispute Settlement procedures.”

The text of the proposed agreement then provides for multilateral and bilateral safeguards, as well as for infant industry protection and a food security safeguard. The multilateral safeguards will be based on Article XIX of the General Agreement on Tariffs and Trade 1994, the Agreement on Safeguards, Article 5 of the Agreement on Agriculture annexed to the Marrakech Agreement Establishing the World Trade Organization and any other relevant WTO Agreements. The latter will also include the rather sophisticated jurisprudence of the Dispute Settlement System of the WTO.

The implication is that the private sector in the SADC states (and the governments) will not be able to invoke protective measures against dumped or subsidized EU imports unless the necessary domestic arrangements for implementing the applicable WTO measures are in place. The same considerations will apply with regard to safeguard measures. If South Africa does not join this EPA, the other SADC states will have to develop their own mechanisms. The new infant industry safeguard will require its own set of new legislative and administrative measures in each of the SADC EPA states.

At present only South Africa has the administrative machinery to implement trade remedies in terms of the applicable WTO rules. It does so do so through ITAC; the International Trade Administration Commission. It

provides assistance with regard to trade remedies for the whole of SACU and undertakes the necessary investigations etc. It does so in terms of WTO compatible national legislation. It is still uncertain whether South Africa will join this EPA.

When WTO members provide for domestic structures and schemes to apply trade remedies they must ensure that their arrangements comply with all the applicable rules. Other members may challenge such schemes and individual remedies imposed in terms thereof. In this instance it will mean that the EC will be able to challenge the SADC states in terms of the applicable WTO rules and procedures. The SADC EPA in fact incorporates an important operational element of the WTO system and makes it ipso facto part of this new regional trade arrangement. This is not necessarily bad news; it may provide an opportunity to bring national systems in line with undertakings already accepted when these states became WTO members in 1995. It may also make it easier to make regional trade arrangement in Africa more rules-based. If trade remedies become available against imports from Europe, why not extend the same protection to cover intra regional trade? Some SACU members are keen to invoke infant industry protection measures for intra SACU trade. Do they have the domestic machinery in place to do so?

The EPAs will establish rules-based trade arrangements. Our states and the private parties within our region (the real traders) will not be able to reap the benefits of legal remedies, certainty and predictability unless the governments in the SADC EPA states establish the necessary domestic frameworks and develop the technical capacity to deal with the associated challenges. They will have to do so in time – to be available when this EPA becomes operational. This will presumably happens rather soon; when the interim SADC EPA is to be implemented.

by Gerhard Erasmus Tralac Newsletter 2009-04-23

http://www.tralac.org