EPAs: the state of play

ACP Council

The Africa, Caribbean, and Pacific (ACP) Council of Ministers adopted a resolution reiterating their commitment to conclude inclusive (involving all members of regional integration groupings) Economic Partnership Agreements (EPAs) that contribute to their countries’ economic growth, sustainable development, and regional integration on 18 December 2008. They also called for contentious issues that have dissuaded some ACP States from entering into EPAs to be addressed. Only the EU Council that gave the mandate to deliver development through EPAs to the European Commission could instruct the European Commission to amend their EPA negotiating positions (though the European Parliament could withhold its assent and national parliaments could refuse to ratify EPAs). In light of this, the ACP Ministers expressed regret that their request for high-level ACP-European Union Member States consultations to address their EPA concerns had not yet taken place and they called on the EU Presidency to facilitate the convening of the meeting as soon as possible in 2009. The ACP Council also called on the EU to provide a roadmap for the implementation of its Aid for Trade commitments in relation to EPAs. In addition, the ACP Committee of Ambassadors was mandated to consider the feasibility of establishing an independent monitoring entity that would evaluate, assess, and recommend how EPAs can meet their development objectives.

Central Africa

An interim EPA (IEPA) between the EU and Cameroon was signed on 15 January 2009. In the Agreement, the EU committed to assisting Cameroon in improving its competitiveness. The IEPA also allows Cameroon to continue duty-free, quota-free access to the EU market, but with an asymmetric and gradual opening of its own markets to EU goods. Improved rules of origin will be given only if agreed in a comprehensive regional EPA that will also cover trade in goods, services, and other trade-related issues, though no regional EPA negotiating rounds have occurred in the past two months. The final goal remains to conclude a comprehensive EPA with all members of the Central African region. How Cameroon’s market access provisions can be folded into a regional offer is expected to be a difficult exercise. Sceptics claim Cameroon’s economy may suffer losses of 20 billion Euros over the next 20 years as a consequence of the EPA. Ministers from the Communaute Economique et Monetaire de l’ Afrique Centrale/The Economic and Monetary Community of Central Africa (CEMAC) meeting on 19 December 2008 instructed the CEMAC Secretariat to convene a meeting of Ministerial EPA Negotiators as soon as possible to provide new orientations to technical negotiators in view of the persistent blockage in the EPA negotiations.

West Africa

To ensure the signing of a comprehensive, equitable, development focused agreement by June 2009, the Economic Community of West African States (ECOWAS) Summit on 19 December 2008 called for the acceleration ofnEPA negotiations. A meeting of the four major economies of the region (Côte d’Ivoire, Ghana, Senegal, and Nigeria) on 2-4 December 2008 led to agreements on 90% of the tariff lines for the region’s common market access offer for goods in the EPA negotiations. They also agreed that the liberalization of pharmaceutical products must be further considered in view of the fact that they should be easily accessible, while allowing space for the industry to develop. At a meeting of the West Africa Regional Preparatory Task Force (RPTF), from 11-12 December 2008, discussions were mainly focused on the EPA Development Programme (Programme de l’APE pour le Développement (PAPED)). The PAPED covers a broad range of domains, including infrastructure, agri-food, textiles, and tourism, with financing requirements totalling 9.5 billion Euros for 5 years. The aim is to finalise the programme during the first semester of 2009. Ghana’s signature of its IEPA was postponed due to their change of government; they are now waiting on a date for signing.

Eastern and Southern Africa

The end of year deadline to conclude a comprehensive regional EPA was missed by the Eastern and Southern Africa (ESA) EPA regional configuration. Both ESA and the European Commission agreed that the timeline set to complete the negotiations could not be met because of the number of issues to be addressed; it was thus decided to pursue negotiations beyond 2008. With regard to the negotiations towards a regional EPA, the ESA Council of Ministers decided at a 5 December 2008 meeting to establish a high-level technical teamcomprising of chairpersons from the five new negotiation clusters (market access for goods, development, trade in services, trade-related issues, and dispute avoidance and settlement). The team will develop options to progress negotiations on each of the contentious issues for the consideration of the ESA Ministers, while the ESA also continues discussions with EU Member States. In the margins of the Council, there was also a meeting of the Implementation Committee on the IEPA and it was decided that Mauritius will host the Common Market for Eastern and Southern Africa (COMESA) Fund. ESA Ministers also stressed the need to ensure the implementation of the regional Tripartite Summit (initially agreed on 22 October 2008) on the harmonisation and coordination of EPA negotiations amongst the three Regional Economic Communities (COMESA, the Southern African Development Community and theEast African Community) to ensure convergence and monitoring.

East African Community

The EAC missed its end of year deadline to complete its internal negotiations and sign the EAC Common Market Protocol. The new deadline is April 2009 to provide enough time for the protocol to be implemented in 2010. Consensus on new issues was reached at the EAC Common Market High Level Task Force negotiations held on 2-10 December 2008. Tanzania’s stance on land ownership and issuance of regional identity cards, however, prevented overall agreement. Experts warn that unless a compromise is found, the EAC integration project could be permanently undermined. The pace of EAC-EU EPA negotiations is dependent on the EAC integration process, which will determine the commitments the EAC are ready to take in the EPA.

Southern African Development Community

The impasse between members on how to move forward on the EPA failed to break at the SACU Council of Ministers meeting on 5 December 2008. Unless a compromise is found quickly, the signing of the SADC IEPA could lead to serious divisions among members, the collapse of regional SADC EPA negotiations, and the dismantlement of SACU with serious consequences for poorer countries in the region and a deterioration of relations with the EU. The European Commission put forward a “non-paper” for a tariff alignment deal aimed at preserving SACU tariff coherence at a meeting between SADC Ambassadors and European Commission officials on 10 December 2008. The “non-paper” proposes that South Africa align its tariffs to the commitments taken by Botswana, Namibia, Lesotho, and Swaziland (BNLS) under the IEPA in return for improved access for South Africa to the EU market. The European Commission indicated that it is also willing to go beyond this and include further market access concessions on both sides if South Africa is in agreement with the proposal. The governments of South Africa, Namibia, and Angola (ANSA) wrote to EU Member States on 6 January 2009 welcoming the European Commission’s “non-paper” as a positive acknowledgement of the ANSA contention that the IEPA, in its current form, will undermine the SACU common external tariff. ANSA stated that this positive development could constitute a basis for addressing concerns with the IEPA that moves away from a piecemeal and partial approach to one that is decisive and comprehensive, in order to effectively promote regional development and integration and to meaningfully strengthen trade relations between Southern Africa and the EU. ANSA called on the EU Council to delay the signing of the IEPA so as to allow time to create the conditions for all Members of the SADC EPA group to participate in a final EPA outcome and establish a single regional trade arrangement with the EU. South Africa and the EU agreed at the South Africa-EU Strategic Partnership Ministerial Troika Meeting on 16 January 20098 that both sides should consider the implications of the EPA on current processes of regional integration in SADC. They agreed that both sides should seek to find mutually acceptable solutions to the concerns raised in the negotiations. South Africa and the EU remain committed to reaching an outcome that consolidates SACU’s common external tariff and which constitutes the essential underpinning for the proper functioning of the customs union. European Trade Commissioner Ashton visited South Africa and met bilaterally with the South African Minister of Trade and Industry, Mandisi Mpahlwa, as well as jointly with the Trade Ministers of Angola, Namibia, and South Africa to discuss their concerns.

Caribbean

Following the signing of a full EPA in mid-October 2008, the focus in the Caribbean is now on implementation; the CARIFORUMEUEPA began to be provisionally applied as of 29 December 2008.10 Most Caribbean countries have started to make progress in addressing the requirements of implementation at the national level. The more sensitive issue of addressing implementation requirements at the regional level, however, must be dealt with through regional consensus amongst the Caribbean Forum of African, Caribbean, and Pacific States (CARIFORUM). The Dominican Republic is leading a call – that is increasingly backed by a number of Caribbean governments – to determine the best regional vehicle to ensure the EPA is effectively delivered. The country tabled a Statement on Matters Related to Institutional Arrangements at the 3 December 2008 Caribbean Community and Common Market (CARICOM) Council for Trade and Economic Development (COTED) meeting. The statement proposes options for a regional EPA implementing institution that calls for an explicit consensus of all CARIFORUM representatives. Emerging regional positions on this issue appear to point towards delegating responsibility either to the Caribbean Regional Negotiating Machinery or the Caribbean Export Development Agency; the CARICOM Secretariat is viewed as unacceptable. Positive development could constitute a basis for addressing concerns with the IEPA that moves away from a piecemeal and partial approach to one that is decisive and comprehensive.

The United Kingdom Parliament has not started ratifying the CARIFORUM EPA because Haiti has yet to sign. Parties are working with Haiti to ensure that the country is in a position to sign shortly, however. The issue may need to be resolved before all national ratification processes are completed. The EU-CARIFORUM EPA has been placed in the World Trade Organization (WTO) category of Regional Trade Agreements for which factual presentation is on hold because it includes a non-Member of the WTO (Bahamas). Such inclusion has implications on the examination process for which there is no consensus yet in the WTO on how to proceed; the issue is still under consideration at the WTO.

Pacific

The Pacific ACP (PACP) countries also missed their 31 December 2008 deadline for completing regional EPA negotiations, though talks with the EU have advanced via e-mail exchanges since the last round of negotiations in September 2008. It may be necessary to move negotiations forward at the Ministerial level to resolve issues that cannot be addressed at the technical level. The European Commission is working on its reply to the Pacific’s EPA draft text covering mutually agreed areas (goods, fisheries, development chapter, etc.). The European Commission’s proposal to sign the IEPAs with Fiji and Papua New Guinea has been transmitted to the EU Council for approval. Translation is complete and the Council Secretariat is preparing the final documents for approval and signature.

For a longer version of the EPA update, please see: http://www.acp-eu-trade.org/newsletter/tni.php