Report of the Africa Union on the State of Play in EPAs Negotiations

(...) 5. The representatives of the EPA negotiating groups and regional economic communities made presentations on the state of play of EPA negotiations in their respective regions. Presentations were made by SADC EPA, ESA, UEMOA, ECCAS and the PIFS. The presenters reiterated that the countries and regions that initialed interim agreements did so to avoid trade disruption.

6. ESA and SADC EPA reported that they have been able to resolve some of the contentious issues identified in the interim agreements, indicating that some level of convergence with the EC has been achieved on some of the contentious issues, for example, export taxes, quantitative restrictions, food security, infant industry protection, modification of tariffs and free circulation of goods. However, both groups reported that there has been no agreement reached on the MFN provision, the definition of parties, agriculture safeguards and the definition of substantially all trade.

7. Four countries in the SADC region signed the interim Agreements in June 2009 and some ESA countries will sign the interim agreement in August 2009 in Mauritius. Going forward, the ESA region has agreed to sign the IEPA in the form in which it was initialed and to lock-in the progress that has so far been made in the negotiations. A lock-in mechanism is however yet to be agreed.

8. At the SADC level, the focus is now on the Implementation of the IEPA and its notification to the WTO, as well as ratification. Negotiations will continue on outstanding issues, and negotiations towards a full EPA covering trade in services, investment and trade related issues will be held in the future.

9. UEMOA reported that the West African region has been able to identify sensitive products and prepared a market access offer, (with an exclusion of 40 % liberalization coverage) that was submitted to the EU. The region has also prepared the EPA Development Programme (EPADP); a program that will allow it to modernize and enhancement its capacity. The ECOWAS rules of origin have been harmonized in the region and on this basis the negotiations with the EU has continued.

10. ECCAS reported that there were major disagreements with the EU in 2007 with respect to adjustment costs financing. Eventually, since January 2008, there has been some progress based on an understanding of asymmetry. EU also accepted to provide resources for a regional fund (FORAPE) and an initial amount of $150 million was agreed. The region has been able to designate sensitive products. There are still some disagreements on issues like substantially all trade, services, where the EU is demanding more liberalization as well as MFN and the non-execution clause.

11. The PIFS reported that only 2 out of 14 Pacific Countries involved in the EPA negotiations initialed the interim agreement. On the contentious issues the region has had similar experience to those of the regions in Africa. However, on trade in services, the Pacific is trying to get a regional framework on trade in services concluded before negotiating services with the EU. PIFS has insisted that there will be no services negotiations unless there is an enhanced-mode 4 commitment from the EU side. Currently, a text is being drafted on the rendezvous clause on services that will commit the two parties to negotiate services in the future.

12. All the negotiating groups reported that interim agreements are causing serious challenges for regional integration. Some negotiating groups have been subdivided into more than three subdivisions due to EPA negotiations.

13. In the discussions, the following recommendations were made;

a. There is need to ensure that African Countries are not disadvantaged if EPAs are concluded before the Doha Round. From a technical point of view, there could be merit and wisdom for those regions that are still negotiating EPAs to incorporate flexibilities achieved at the WTO in their EPA texts.

b. There is need to ensure that the contentious issues that have been agreed on between African negotiating parties and the EC are put in legal language that is binding on both parties.

c. The Regional Economic Communities and EPA negotiating groups should work together and exchange relevant information and experiences more frequently. The African Union Commission should facilitate this process.

d. There should be high level political engagement by the African Union and other regional bodies for the resolution of those contentious issues that have not been resolved so far such as the MFN provision, safeguards as well as the definition of parties among others.