EU Parliament Make New Push on EPAs

Brussels considers the EPAs a WTO‐compatible method to promote growth and economic integration in the developing world. But critics assert that such agreements liberalise trade too much and too quickly, overwhelming emerging economies. Yet recent statements from Brussels contend that such criticisms are misplaced, as the EU appears committed to moving forward with the agreements.

The EU has “absolutely no interest whatsoever” in creating agreements “that make any country poorer,” said EU Trade Commissioner Catherine Ashton. “I believe that these are good agreements that support economic development and integration in the ACP and provide stability in these economically turbulent times . they are agreements that provide the opportunity for ACP states to lift their citizens out of poverty through the dignity of their own labour and the genius of their own ideas.”

Reaffirming her commitment to further liberalisation, Ashton also sent a letter to African trade ministers on 20 March, pressing SADC officials to set a date for signing interim agreements – a move which Ashton claims is necessary to ensure legal security for preferences offered to Botswana, Lesotho, Namibia, Mozambique and Swaziland.

Despite attempts to conclude the agreement, the SADC EPA is now nearly fifteen months past the original deadline of January 2008. In the latest effort to move the talks forward, trade officials met in Namibia to address concerns of Angola, Namibia and South Africa, a meeting seen as productive by many observers. However, officials from some African nations were hesitant to solidify the interim agreements and requested more time from Brussels. “Many countries feel that the EPA in its current form would undermine the regional integration agenda,” said South African Deputy Director of Trade and Industry of Xiam Carim. Other African representatives remain non‐committal on exact signing dates, indicating that some nations await approval from their respective trade ministers. “We’re ready to sign, we’re just waiting to be advised accordingly,” Swaziland Foreign Affairs Ministry official Clifford Mamba said in an interview last week. Yet in light of strong support within the European Parliament, Brussels was optimistic regarding the development of additional EPAs.

“I welcome the Parliament’s vote on the Economic Partnership Agreements. It is an important political signal that the European Parliament has given its assent to the first examples of a new generation of agreements that safeguard the EU’s special relationship with the ACP,” said Catherine Ashton.

Link to ICTSD Reporting: http://ictsd.net/i/news/bridgesweekly/43823/

ACP‐EU Parliamentary Assembly ask for flexibility

The 3rd Regional Meeting of the ACP‐EU Joint Parliamentary Assembly (ACP‐EU JPA) was held at the Guyana International Conference Centre, Liliendaal from February 24‐27. The meeting brought together ACP members of the JPA from member states of the Caribbean region and their counterparts from the European Parliament. The meeting was presided over by Co‐President Glenys Kinnock and Acting Co‐President Otmar Rodgers of Suriname. In the formal opening session of the meeting statements were presented by Speaker of the National Assembly Ralph Ramkarran and the Co‐Presidents while President Bharrat Jagdeo gave the keynote address.

Members also called on the European Commission and EU member states to ensure that timely and adequate resources were made available, in particular to support the implementation and adjustment costs of EPAs, managing the loss of government revenue, and building capacity to address supply side constraints.

Additional funding, they contended, should be provided within the framework of the principles agreed upon in the Paris Declaration on Aid Effectiveness and the Accra Agenda for Action, especially those aspects relating to donor coordination. They asserted that this was even more imperative given the likely impact of the current financial and economic crisis, which will have far‐reaching consequences in the region.

New opportunities

On an optimistic note, it was acknowledged that the Agreement presented new opportunities “for ownership, accountability and transparency which if properly utilized will assist in bridging the democratic deficit perceived in the negotiation phase by strengthening the scrutiny and oversight role of parliaments during implementation.”

Tourism

The communiqué noted that members urged Caribbean member states to promote tourism in the context of regional integration and sustainable development in which the local population also takes ownership and benefits from the industry since currently 80 cents of every tourism dollar leaves the region. It was regretted, however, that there was no single visa system for or within the region despite the fact that globally the region is often promoted by the international tourism industry as a single destination.

Members also called for renewed efforts at ensuring the sustainability of tourism by adopting policies and practices that preserve the environment, and emphasized the need to fight against anti‐competitive prices in the tourism industry while expressing support for the “full and faithful implementation of the relevant industry regulations incorporated in the Cariforum EPA.”

Narcotics trade

According to the Assembly, the foremost security concerns in the region are the rising level of crime, the narcotics trade, human trafficking and illegal arms trade as well as the inadequacy of the criminal justice system. The communiqué said that globalisation had facilitated criminal syndicates to intensify and extend their activities on a global scale and members thought that the social and economic repercussions that will result from the global financial and economic crisis will lead to a rise in criminal activities.

Members, however, applauded the establishment of regional institutional mechanisms aimed at promoting collaboration among member states in fighting crime. Moreover, they requested that particular attention be paid to the laundering of money from the narcotics trade and in this regard they called for resources to be provided to countries in the region, many of which are used as transit points towards northern markets whose ever increasing demand for narcotics fuelled the trade.

“While transit nations are made unattractive for investment and tourism due to the narcotics trade, international financial support is concentrated on producer and consumer states,” the communiqué stated, adding that the narcotics trade had become a challenge to legitimate economic activities.

Members emphasized that fighting crime needed a multi‐sectoral and inter‐agency approach to address demand and supply issues, as well as preventative measures targeting youth and education as well as treatment and rehabilitation of drug addicts.

They noted too that the Caribbean region was affected by natural disasters with serious consequences for education, health, tourism and transport infrastructure and called for adequate resources to be provided for prevention adaptation and mitigation measures. It was observed also that while most Small Island Developing States and low lying states do not contribute to climate change, they suffer disproportionately from its effects. In this regard the international community was urged to give due regard to the principles of the Kyoto Protocol and the United Nations Convention on Climate Change that emphasize the importance of common but differential responsibilities among the Parties.

Standing forests

Meanwhile, members recognized the contributions of standing forests in the fight against climate change, and the need to improve infrastructure and establish forecasting systems and better responding mechanisms. Against this background members welcomed the action taken in the Caribbean region to mitigate the effects of climate as exemplified by the efforts of Guyana in responding to the 2005 floods. They noted the EU planned financial support for ACP states to respond to climate change and agreed with the proposal for financial compensation for Caribbean states such as Guyana and Suriname for their efforts in protecting standing forests.

The Co‐Presidents are expected to present conclusions of the meeting at the next meeting of the ACP‐EU JPA Bureau and the 17th session of the ACP‐EU JPA in Prague, Czech Republic, and to also forward the Georgetown Communique to the ACP Parliamentary Assembly, European Parliament, European Commission, Caricom Secretariat and the national parliaments of Caribbean ACP states, the communiqué added.

Members earlier acknowledged that the Cariforum EPA had been signed by all Caricom states except Haiti, despite some reservations. The EPA is a complex agreement, they acknowledged, therefore it was desirable that the Caribbean should have time for reflection and that the EU show restraint. Members were told that the European Parliament was currently engaged in the ratification process of the Cariforum EPA and that national parliaments of EU member states also have to ratify the agreement. They emphasized the need to adapt implementation of the Agreement to the specific needs of each country in view of the multidimensional nature of the possible effects of EPAs.

Members also discussed the problems faced by the banana industry in the region which is likely to be negatively affected by the outcome of the EU’s negotiations and they were also concerned by the news that the EU was finalizing negotiations with Central American states which could result in a cut in the EU import tariff on Central American bananas although legally the Caribbean EPA is supposed to protect the banana sector. Given the importance of bananas especially to the Windward Islands States which has enabled them to develop economically and socially, erosion of the EU market for bananas from these countries will have serious economic and social consequences that could lead to security threats and instability in the region. It was pointed out that diversification from this sector was almost impossible as there are no other viable alternative export products in the short term.

Meanwhile, members welcomed steps taken towards the normalization of the relations between the EU and Cuba which will have an impact on the EU’s strategy for the Caribbean. And while the EPA had not been signed by Haiti, it was hoped that this would not lead to that country being marginalized, the communiqué said.

Link to: http://www.stabroeknews.com/2009/news/local/02/28/flexibility‐urged‐in‐activation‐of‐eutrade‐deal/

Do not sign an EPA in light of the Global Financial Crises

All this comes at a time when the highly liberalized developed countries which are facing a financial meltdown, are introducing protectionist measures such as ‘Stimulus Packages’ to bail out their banks and industries.

Civil society organizations working on economic justice issues have continuously elucidated the concerns we have with the EPAs, not just the content but also the manner in which these negotiations are taking place. We would like to take this opportunity to reiterate our concerns with the Interim EPA: ‐

‐ GOVERNMENT REVENUE LOSS

Impact assessments that have been carried out by the Kenya Institute of Public Policy Research and Analysis (KIPPRA) show that the government will lose revenues due to tariff elimination and from regional trade. Other analyses that have been carried out by European Centre for Policy Development and Management (ECPDM) state that loss of revenue will be severe; this will greatly affect provision of social services such as education and health care.

‐ LOSS OF JOBS

65 per cent of Kenyan industries are faced with unfair competition from EU industries. These vulnerable industries include food processing, textiles, paper and printing. Analyses done by KIPPRA indicate that the EU will become the main supplier of food and beverages accounted for 67 per cent of all food and beverages imported into the country. This will lead to loss of jobs of over 100,000. As the global recession kicks in, Kenya has begun to experience massive job losses in the horticultural, banking and other sectors. ‐ ARTICLE 13 – STANDSTILL CLAUSE

This clause freezes tariffs on ALL TRADE between the parties whether or not these products are subject to liberalization. As a result, even if a product is on the ‘exclusion list’, the tariff on this product cannot be raised after the entry into force of the agreement. For example, imported milk and milk products attract a tariff of 60 per cent however with the entry into force of the agreement; Kenya will be unable to increase this tariff to protect any vulnerable sector.

‐ REMOVAL OF EXPORT DUTIES

Export duties have been used to raise revenues for some developing countries across the world accounting for more that 20 per cent of government revenue in countries like Burundi. In Kenya, export duties have been used to encourage value addition for example, in the leather sector.

‐ ARTICLE 18 ‐ EU MEMBER STATES’ EXPORT SUBSIDIES NOT ELIMINATED

The Interim agreement allows the EU to continue issuing their producers export subsidies. It is important to note that the dairy sector in the EU received 16 billion euros; this translates to USD 2 per cow per day! Over 56% of Kenyans survive on less than USD 1 per day

‐ ARTICLE 16 – MOST FAVOURED NATION (MFN)

The EPAs threaten South–South integration. Europe insists on a ‘most favoured nation’ (MFN) clause in EPAs, requiring the EAC countries to extend to Europe the benefits of any deal that they might strike in future with other large countries or regions such as India, China, or Brazil. Ensuring permanent, privileged access to EAC markets might be good for Europe, but it is not necessarily in the interests of EAC countries. Just at the point when historical dependence on Europe is waning, this provision limits the leverage of EAC countries to negotiate favourable deals with the very countries where their exports are growing most rapidly. Brazil, supported by China and India, has raised concerns about this provision at the WTO.

We strongly urge the Minster, Hon. Kimunya to halt the signing the agreement in light of the concerns that we have raised.

We also urge the Minister to reconsider negotiating the EPAs and look into possible alternatives such as the Enhanced Generalised System of Preferences (GSP plus) which also assures us of preferential access into the EU market.

Africa, trade, and the crisis: a stimulus package for Africa

Research at the London‐based Overseas Development Institute and the National Institute of Economic and Social Research shows that the road to African recovery depends on the size and focus of the stimulus. Debt relief would be helpful but have no direct effect on demand and hence growth and poverty. If the stimulus is spent to cushion the impact on the vulnerable it will have short‐term positive impact on growth as it helps smooth income losses. In case the emphasis is on productive investment it will have a short and long‐term impact by preserving the pre‐crisis growth prospects.

(…)

Key global trade governance priorities for Sub‐Saharan Africa

The legitimacy of the G20 leaders will depend on the extent to which they can integrate the interests of non‐G20 members. They should collaborate with Africa to create the conditions for swift recovery and even

higher growth. Focus could be on increasing policy transparency and stability and enhancing policy credibility that in turn will make the region attractive to domestic and foreign investors. They should ensure

the Doha Round is completed in a timely manner with the interests of African countries properly reflected

in the final agreement. A related priority is to conclude the EPA negotiations in a manner that eases the integration of African countries in the international trading system.

Finally in case the stimulus finances investment in infrastructure, Africa would see growth in productivity that can nurture long‐term growth beyond pre‐crisis growth potential. The same research shows that growth in Africa will in turn contribute to swift worldwide recovery, especially in countries with significant trade links with Africa such as Europe and China. African countries need a stimulus package to mitigate the

contagion of these internationally originated problems. The stimulus shall have properly integrated sets of

trade, monetary, and fiscal measures. It could provide assistance to facilitate economic adjustment and nurture investments in human and physical capital, such as to minimise long‐run costs. The stimulus should

support appropriate safety nets for those most vulnerable and most exposed to the crisis; it should be consistent with long term sustainable levels of indebtedness. The private sector and particularly the Small

and Medium Enterprises (SMEs) that will be creating wealth necessary for poverty reduction should receive

particular attention. Unfortunately, African countries cannot internally mobilize the necessary resources.

Various proposals have been floated recently. One example by the World Bank is to devote 0.7% of the stimulus of developed countries to a “Vulnerability Fund for Africa.” This Fund could finance projects that would help mitigate the consequences of the crisis, including safety nets programs, investments in innovation, technological upgrading, and infrastructures that can provide the foundation for future growth.

The Vulnerability Fund for Africa would also undertake those actions that governments would have undertaken with funds diverted from current reform program. Effective implementation Aid for Trade would assist African countries affected by the financial crisis to increase exports of goods and services, to integrate into the multilateral trading system, and to benefit from liberalised trade and increased market access. It would help distribute the global benefits more equitably. So far most of the suggestions have been coming from outside Africa. The G20 leaders could facilitate collaborative efforts aimed at bringing forward a common African response to the crisis through an Africa‐led stimulus package that is properly funded, free from un‐necessary bureaucracy, and not diverting resources from existing programs.

by Dominique Njinkeu

* Dominique Njinkeu is the Executive Director of the International Lawyers and Economist Against Poverty (ILEAP) in Toronto

Jamaica could become regional economic hub under EPA

The development plan sees Jamaica expanding its trading practices to include non‐traditional export sectors, such as services, culture, sports and intellectual property. It also focuses on the building of stronger links with established and new trading partners, offering investors access to an intricate network of markets in Europe, the Caribbean and the Americas. Dr Baugh spoke to the tremendous benefits that European investors stood to access, as a result of doing business with Jamaica, and sold the island as a potential industrial hub, offering an excellent logistical and infrastructural foundation for investment.

He described the signing of the EPA as a tremendous achievement, noting that the emphasis has now shifted to the establishment of Government, Parliamentary and Administrative structures to ensure its smooth implementation. The minister invited prospective European investors to take advantage of the agreement and to become part of the process to ensure that the EPA works for all stakeholders.

In selling Jamaica’s vision of achieving developed world status by 2030, he described the country as the place to live, work, raise families and do business. He said Jamaica was aggressively positioning itself as the place to do business in the context of its overall development objectives. He outlined a number of areas in which Jamaica possessed competitive advantage as an ideal location for investment. He pointed to the country’s stable Parliamentary democracy; the simplification of regulations and procedures for creating a more investment‐friendly environment; legislation which protects and guarantees the rights, powers and privileges of investors; the natural economic advantage presented by the island’s strategic geographical location and the fact that there are no language barriers with the English‐speaking international business community.

The minister said that the comprehensive nature of the EPA, which covers goods, services, investment, competition, intellectual property, public procurement, labour and environmental provisions, had forced Jamaica to take a more aggressive approach towards implementation. "We want to ensure that Jamaica’s trade develops beyond traditional goods into new areas, such as services, and we want to see our trade with Europe grow beyond our traditional partners, to include the new European Economic Community members in Eastern Europe," he argued. "We are also looking to engage the North American market more aggressively, beginning with the possible negotiation of a free trade agreement with Canada, this year. We will also be looking at deepening existing trade agreements with our regional partners, to ensure that we create conditions for the private sector to benefit and to trade," he added.

Dr Baugh alerted stakeholders and potential investors to the fact that companies that do business in Jamaica, under the EPA, would benefit from the country’s objective to become a partner in trade and economic co‐operation in much larger marketplaces of the hemisphere and the rest of the world. He also emphasised the critical fact that goods and services produced in Jamaica, under the EPA, would have up to 86 per cent elimination in customs duties, when they enter Europe. Other speakers at the forum included, Minister of Industry, Investment and Commerce, Karl Samuda, and Minister without Portfolio in the Ministry of Finance and the Public Service, Don Wehby.

By Jamaica Observer

Aid for Trade and EPAs: Commissioner Ashton in Zambia 5‐7 April

The European Commission will join other international partners including the European Investment Bank, the World Bank, the African Development Bank and the UK government. While in Lusaka, Commissioner Ashton will also meet with trade ministers from the Eastern and Southern African (ESA) group in order to push forward the Economic Partnership Agreement (EPA) process in the region.

Impacts and fears (1): Cameroon

The stepping stone or 'interim' EPA gives Cameroon duty free quota free access to the EU market, with only an asymmetric and gradual opening of its own economy. Cameroon has excluded a number of agricultural and manufactured goods from liberalisation, and will liberalise 80% of imports from the EU over a period of 15 years.

The Agreement also includes commitments by the EC and its Member States to assist Cameroon to improve its competitiveness as well as measures to help exporters to meet EU import standards (sanitary and phyto‐sanitary (SPS) measures). Also included is cooperation on more efficient customs procedures, as well

as on fiscal adjustment to ensure that removal of tariffs does not destabilise the country's public finances. Trade in goods

The provisions on Trade in Goods cover:

Duty free quota free access into the EU for all imports from Cameroon as of 1st January 2008, with transition periods for rice and sugar;

An asymmetric and gradual opening of its markets to EU goods, taking full account of the differences in levels of development between them and the EU (see below);

A chapter on trade defence with bilateral safeguards allowing each party to reintroduce duties or quotas if imports of the other party disturb or threaten to disturb their economy;

A chapter on Technical Barriers to Trade as well as Sanitary and Phyto‐Sanitary (SPS) measures, to help Cameroonian exporters meet EU import standards; and a chapter aiming to facilitating trade through measures such as more efficient customs procedures and better cooperation between administrations.

Goods liberalised in the Interim EPA

All imports from Cameroon have entered the EU duty and quota free since 1st January 2008 (other than transition periods until 2010 for rice and 2015 for sugar). This is an improvement over the previous Cotonou trade regime. In return, over the next 15 years, Cameroon will liberalize 80% of imports from the EU.

Liberalised EU imports are mainly industrial machines (pumps, generators, turbines, etc), vehicles (boats, aircrafts, cars), and certain chemicals. These are all inputs used by Cameroon's industries which are not produced locally. Eliminating import duties on these products will reduce the costs of inputs for local businesses.

Trade balance between the EU and Central Africa shows a surplus in favour of Central Africa. The main EU exports are industrial goods and vehicles. Central Africa's main exports are oil (over 50% of Central African exports) and agricultural tropical products (cocoa, bananas, pineapples, wood).

Goods not liberalised in the Interim EPA.

Cameroon excluded a number of agricultural and non‐agricultural processed goods from liberalization towards EU imports, mainly to ensure the protection of certain sensitive agricultural markets and industries but also to maintain fiscal revenues.

The excluded products include most types of meat, wines and spirits, malt, milk products, flour, certain vegetables, wood and wood products, used clothes and textiles, paints, and used tyres.

Other elements

There is a detailed dispute settlement mechanism to support effective implementation of the agreements and new, improved, Rules of Origin will be annexed to the interim EPA as soon as they are agreed with the whole region in the full EPA negotiations. In the meantime Cameroon benefits from the general EPA improved Rules of Origin (Council Regulation 1528/2007).

Development Cooperation

Development Cooperation provisions make the link with the EU development cooperation. They identify priority areas of development cooperation to accompany the implementation of the interim EPAs. The main areas identified are:

• Development of basic infrastructure with a regional dimension;

• Agriculture and Food security with a regional dimension;

• Reinforcing, diversifying and upgrading of the capacity of the economic and productive sectors with a

regional dimension;

• Reinforcement of regional integration;

• Improvement of the business environment; and

• Implementation of trade rules in the agreements.

Cameroun perdra plus de 200 milliards en 12 ans

By Mohamadou Houmfa, Journal du Cameroun

L’esprit de la démarche des responsables est simple, tout accord peut‐être dénoncé si une partie le veut. C’est pourquoi, l’Asac continue, malgré la signature d’un accord de partenariat économique d’étape le 15 Janvier 2009 par le Cameroun et l’union européenne, d’interpeller les décideurs camerounais. Son président, Docteur Ebale, enseignant d’histoire à l’université de Yaoundé I a rencontré la presse ce mardi Février 2009. Pour lui, si la signature des accords de partenariat économique fait débat, c’est parce qu’elle n’augure rien de bon pour le Cameroun. Le Cameroun qui a pourtant selon lui intérêt à se défendre et défendre l’Afrique Centrale parce que nous avons le tissu industriel le plus fort de la région. Les panélistes réunis autour du président de l’Asac se sont accordés sur le fait que la signature des Ape tels que présentées, en ce moment, constituent un risque énorme pour les pays de l’Afrique Centrale. Pour Jacob Kotcho, secrétaire permanent de l’association de défense des intérêts collectifs (Acdic), la signature des Ape est un facteur déstabilisateur de l‘intégration régionale. Alors que l’Afrique Centrale est en train de d’amorcer sa marche vers un ensemble sous‐régional harmonieux et cohérent, il y a lieu de constater que le Cameroun est le seul pays qui a signé jusqu’ici l’accord d’étape des Ape. D’après Jacob Kotcho, l’Afrique Centrale pourrait perdre 775 milliards de francs Cfa dont 295 milliards pour le Cameroun en 12 ans du fait de ces accords de partenariat économique. Au‐delà de la menace qui pèse sur l’intégration régionale justement, la libre entrée de 80 % des produits européens aura des implications fiscales extrêmement lourdes. Ainsi que l’indique les panélistes, ce sont les droits de douanes qui vont baisser alors que les droits de douanes représentent près de 40 % des recettes budgétaires de certains pays de l’Afrique Centrale Inquiétudes Mme Andela, panéliste et membre de la société civile s’interroge sur la démarche de l’Union Européenne qui entend aider le Cameroun à compenser les pertes engendrées par les accords de partenariat économique. « C’est un véritable scandale. Dans toutes les négociations qui engendrent des pertes pour l’une des parties, la compensation doit être faite par l’autre partie » fulmine t‐elle. Celle‐ci a aussi soulevé son inquiétude par rapport à l’intention du gouvernement d’élargir l’assiette fiscale pour permettre la compensation des pertes créées par les Ape. Ainsi que sur l’attitude de l’Union Européenne qui « fait une fixation » sur le respect des échéances plutôt que sur le contenu des accords. J’ai le sentiment que l’Union Européenne ne se préoccupe que des dates arrêtées pour la signature des accords au lieu de discuter du contenu de ces accords a‐t‐elle dit. Jacob Kotcho a, quand à lui, tenu à préciser à l’assistance que la notion de libre accès des produits camerounais sur les marchés européens est une notion encadrée. Ce ne sont pas vraiment tous les produits camerounais qui vont entre dans l’Union Européenne puisque ces produits doivent avant tout respecter les normes de qualité.

Les accords de partenariat économique continuent donc de faire débat même si tout indique qu’ils devraient entrer en vigueur en 2010. Les préoccupations que continuent de soulever la société civile seront‐elles entendues ? L’Asac interpelle en tout cas le gouvernement puisque, comme l’a fait remarquer jacob Kotcho, Il faut dire la responsabilité de cette affaire incombe d’abord à nos décideurs. Reste à voir de quelle marge de manoeuvre dispose ces décideurs et quels sont les outils de pression qu’utilise l’Union Européenne sur ces décideurs. Dans un contexte où l’offensive commerciale de la Chine est presque foudroyante.

Impacts and fears (2): South Africa

Southern Africa: SA May Be Excluded From EU Partner Deal

By Mathabo Le Roux, Business Day

The European Union (EU) is likely to move towards the official signing of an interim economic partnership agreement, known as an EPA, with countries of the Southern African Development Community (SADC) that will exclude South Africa. A meeting in Swakopmund, Namibia, between the European Commission (EC) and the SADC group failed to break an impasse over concerns SA has, despite significant further concessions by the EU to sweeten the deal. A source close to the talks, who declined to be named, said it was likely the EC would ask to be given the go‐ahead to prepare to sign the interim deal as all attempts to bring SA back into the talks had failed. This will see Botswana, Lesotho, Namibia and Swaziland sign the deal, leaving SA, the only other member of the Southern African Customs Union, out of the deal.

The EU agreed to favourable terms for infant industry protection, which could see the countries in the SADC configuration exclude sectors earmarked for development from liberalisation. The EU also allowed for existing export taxes ‐‐ used by countries to encourage beneficiation ‐‐ to continue and gave scope for new export taxes to be introduced.

The EU also modified its demand on the quantitative restrictions of exports in favour of the SADC group, and the parties agreed on the free circulation of goods to facilitate easier trade in the region.

Sources close to the process said Namibia ‐‐ which shared SA's concerns ‐‐ had been won over by the EU's concessions and indicated it would sign, clearing the way for the commission to propose a date for signature to legitimise trade relations between Europe and the region.

The EU has been unilaterally extending preferences to the region in breach of World Trade Organisation (WTO) rules since the expiry of a waiver on the Cotonou agreement in December 2008. Europe is anxious to bring its trade relations with the SADC group in line with trade rules to avoid a WTO challenge. Jorge Peydro‐Aznar, the European Commission (EC) head of trade in Pretoria, said the meeting was positive.

"Good progress was made on most concerns. We remain hopeful of a deal, because we need to address the WTO compatibility issue as a matter of urgency," he said. SA's chief trade negotiator, Xavier Carim, was also positive about the talks but said no movement had been made on the most‐favoured nation (MFN) demand and the legal status of the parties. Under the MFN, concessions made to countries whose trade exceeded more than 1% of world trade would, in future trade agreements, be automatically extended to the EU.

" We did well on most issues. There is scope for further progress, but it is not clear if we will get another chance to talk ," Carim said. The EC was to report back to member states on the status of the talks. Eight major issues were discussed at the Swakopmund meeting and only two were unresolved ‐‐ MFN and the fact that the SADC region was negotiating EPAs under four different configurations, which SA argued would hamper plans for future regional integration. The EC last week offered to raise the threshold of countries' portions of world trade to 1,5% and agreed to limit the MFN requirement exclusively to customs duties, but this was still not acceptable to SA.

EU Commission Manufactured African Business Support for EPAs

Corporate Europe Observatory Press Release

Internal email communication by DG Trade obtained by Corporate Europe Observatory (CEO) unveils how the EU Commission has actively orchestrated African business support for its Economic Partnership Agreements (EPAs) with countries from Africa, the Caribbean and the Pacific. MEPs will vote on the EPA negotiations at their sitting in Strasbourg today and tomorrow.

According to the information revealed to CEO, DG Trade was responsible for setting up a business trade forum ‐ the Business Trade Forum EU‐Southern Africa ‐ to provide active support for the EU's EPA negotiations with Southern African Development Community (SADC). Together with the European employers' federation BusinessEurope, DG Trade also drafted the pro‐EPAs position of the EU‐Africa Business Forum.

Corporate Europe Observatory trade campaigner Pia Eberhardt said:

“DG Trade has deliberately set about creating an EU‐African corporate consensus on EPAs to back up its own agenda. It even pushed the European employers' federation, BusinessEurope, to take a more extreme position on the negotiations. African businesses, meanwhile, have been completely by‐passed in the process.” The European Parliament session will decide whether or not to give assent to the two Economic Partnership Agreements which have been signed so far. It will also vote on a number of related resolutions. Several civil society organisations, including CEO, are calling on MEPs not to support these agreements.

Pia Eberhardt added:

“MEPs must deny their support for these agreements until there has been a complete overhaul of the EPA system. The Commission must be called to account over its bullying of ACP governments and told to stop manipulating African business to do the dirty job of legitimising agreements, which will only benefit big business in the EU.”

Link to: pulling‐the‐strings‐of‐african‐business.pdf

EPAs: the state of play

Central Africa

A work plan for the next stages of the EPA negotiations and finalisation of the 10th European Development Fund’s Regional Indicative Programme have been the focus of Central African and European Commission officials’ work since their February round of negotiations. CEMAC (Communauté Économique des États d'Afrique Centrale) Trade Ministers met in March to review progress in the negotiations and provide new negotiating instructions ahead of the next scheduled round of negotiations with the European Commission in Brussels (at technical and senior official levels) the weeks of 23 March or 20 April 2009. Negotiations are expected to continue, in parallel, on market access for goods and services; rules of origin; trade‐related issues; the EPA text on development; the Joint Orientations Document for EPA development support; net fiscal impact; and an estimation of the needs of the region in Aid for Trade.

A platform was created for Cameroonian customs and business officials to discuss how to better facilitate trade with the Central African region. The Forum Douanes/Entreprises (the Customs/Business Forum) met on 10 March 2009 and established working groups to discuss the priority issues of optimising customs facilitation measures, rationalising customs controls and contractualising the relations between customs and business authorities.

A road map to address monetary and fiscal concerns in view of the international financial crisis and it’s impact on CEMAC was agreed at a Ministerial meeting on 6 March 2009.

West Africa

West Africa tabled a draft regional market access offer to the EU for liberalisation of 60% of EC imports over 25 years (2010 à 2034) at joint technical and senior level EPA negotiations from 16 to 20 February in Dakar. A final offer must still take into account the eventual completion of the ECOWAS common external tariff and national and regional determinations of the economic and fiscal impact of this offer. WA also requested that the EC services MA offer be provided immediately to the region in exchange for a commitment from the region to negotiate an offer over the next 3 years as it identifies its sectoral interests and prepares negotiations. The European Commission welcomed the offers, but questioned their WTO compatibility in terms of reciprocity, coverage and transition timing.

Negotiations on the EPA texts were nearly completed on Trade Defence Instruments, Sanitary and Phytosanitary rules, Technical Barriers to Trade and Trade Facilitation. Compromises seem in reach on West Africa’s request to maintain regional levies and export taxes.

Fundamental divergence of views continues on the MFN clause and WA's request to be able to reintroduce duties in order to implement its industrial and agricultural policies.

West Africa also tabled proposals on trade related issues, cooperation for the implementation of the EPA, dispute settlement, general exceptions, institutional arrangements, EPA final provisions and other EPArelated issues and negotiations were started negotiation on most of these areas on this basis The draft EPA development plan was refined and its national components improved. The EC welcomed West Africa’s proposal for a draft chapter on cooperation for the implementation and viability of the EPA WA put forward a compromise text in relation to its call for an EU commitment to continue EPA related support beyond the 2020 deadline of the CPA.

Discussions on these issues, at the next negotiation round, to be held in Brussels in late April or early May 2009.

Eastern and Southern Africa (ESA)

National and regional level preparations continue up to ESA Ministers meeting that could be arranged on the sideline of the AU Trade Ministers held in Addis Ababa 16‐20 March and the ESA‐EC Ministerial. Joint technical negotiations can then resume depending on the outcome of these meetings.

Training sessions in ESA MS on services were launched in Mauritius from 24 to 26 February 2009. The key objective of the training sessions is to provide the ESA countries concerned with the tools to identify the key services sectors for their economy, taking into account their development goals. This would enable them then to define their offensive and defensive trade interests in the context of the negotiations and to build capacity for both public and private sector players to prepare offer and demand schedules for services in the context of wider national and regional development needs for the purposes of effective negotiation. Zambia was the first African country to sign, on 5 March, the EC’s new MDG contract with the EC for direct long term budgetary support of €225 million over six years (2009‐2014), provided via 10 EDF, aligned with the countries own procedures and policy priorities focused on improving the management of public finance, improving social services and promoting structural reforms to bring employment and growth and aiming to speed up progress towards achievement of the MDGs in beneficiary countries

EAC

An information seminar on Services and Investment in EPAs for the EAC region was held from 16 to 17 February 2009 in Dar es Salaam. In attachment you’ll find some results and findings.

Link to tradoc_142368.pdf

SADC

Eight of ten of the outstanding contentious issues in the negotiations on the signing of the SADC IEPA were resolved at make or break joint meetings of technical and senior EU‐SADC officials meetings from 9‐11 March 2009 in Swakopmund. The meeting was preceded by a SADC EPA Group Ministerial meeting on 20 February where the concerns of Angola, Namibia and South Africa, as well as Lesotho’s proposal, including calling for the recognition of Lesotho’s unique position as an LDC within SACU, were taken on board as full SADC EPA group concerns.

The EU agreed to more favourable terms for infant industry protection which could allow SADC countries to exclude from liberalisation sectors earmarked for development reasons. The EU further allowed for existing export taxes to continue and provided scope for new export taxes to be introduced. The EU also modified its proposal for the quantitative restrictions of exports in favour of the SADC group. The parties also agreed on the free circulation of goods to facilitate trade.

Divergent positions remain though on the European Commission’s proposal to include a most‐favoured nation clause in the EPA despite the Commission’s offer to raise the threshold of countries’ portions of world trade to 1,5% and agreed to limit the MFN requirement exclusively to customs duties, but this was still not acceptable to South Africa, who maintains that the core contentious issue remains in that it should not be automatic, but instead consultative, especially for SACU Member States who cannot have differential obligations. The South Africa Trade and Development Cooperation Agreement includes this provision for consultation, but the European Commission does not want to extend this in to the IEPA.

Disagreement persists also on the legal status of the parties. It was decided to put this to lawyer to sort out this technical issue. According to South African trade officials, there is scope for further progress to resolve these two remaining issues.

The European Commission will report back to EU Member States on the negotiations, as will SADC to a SADC Ministerial meeting (yet to be set, but which will take place in the coming weeks) for direction on the two outstanding issues and on signing. Press reports indicate that the EU may move to sign an IEPA without SA, but SA sources indicate that the remaining issues will be effectively addressed and they will be able to then sign the IEPA. Negotiations on full EPA far away, need at least 12 more months to negotiate that.

Caribbean

Caribbean Community and Common Market (CARICOM) Heads of Government gave the mandate to coordinate Caribbean Member States’ implementation of EPAs to the CARICOM Secretary General at their meeting from 12‐13 March 2009 in Belize City. According to the EPA agreement, coordinators (including at national level) were to have been appointed at the time of provisional application of the agreement, i.e. 29 December 2008. The Caribbean Forum of African Caribbean and Pacific (ACP) States (CARIFORUM) is required to be ready to participate in institutions of the EPA by mid‐April this year. CARICOM’s decision on the EPA Coordinator must have the explicit consensus of all CARIFORUM members to be binding.

Caribbean Heads further endorsed the establishment of the EPA Implementation Unit and confirmed that the assistance of the Unit is available to all CARIFORUM signatories to the EPA (i.e. also to the Dominican Republic). The unit was established in February 2009 and is headed by Branford Isaacs, Adviser to the Secretary‐General on EPA Implementation. It is unclear what the relationship of the unit will be with the Caribbean Regional Negotiating Machinery which negotiated the Caribbean EPA, but has been criticized, most vocally by Guyana who says the CRNM mishandled the EU deal and had become too independent. The Dominican Republic is on the record rejecting that any mandate be granted on the matter to the Office of the Secretary‐General of CARICOM unless the Dominican Republic enjoys equal rights with the rest of the CARICOM Member States. And for that, a deep process of legal and institutional reform is needed as a matter of urgency, addressing the serious governance issues observed in this particular institution.

Alternatively, a true Office of the Secretary‐General of CARIFORUM needs to be created, separately from the aforementioned one. In the meantime, they proposed that CRNM be granted a provisional mandate to undertake the regional coordination efforts for EPA implementation.

CARICOM Heads of Government also exchanged views with the Minister of Foreign Affairs of the Dominican Republic, who represented his President, on issues relating to the implementation of the EPA and on his country’s relations with the Caribbean Community. The Dominican Republic objects to CARICOM coordination arguing that it would be a recipe for inertia given Caricom's record on implementation. Heads of Government agreed that discussions with the Dominican Republic should be continued with a view to arriving at a consensus on the designation of the CARIFORUM Co‐ordinator under the EPA.

Jamaica has outlined its vision of economic growth and development, to be stimulated by direct European investment. The plan calls for trade diversification to non‐traditional export sectors, such as services, culture, sports and intellectual property. It also focuses on the building of stronger links with established and new trading partners, offering investors access to an intricate network of markets in Europe, the Caribbean and the Americas. Work continued in the CRNM in the drafting of briefs, working documents and informing of positions on for example the drafting of the Rules of Procedures to govern institutions to be established under the EPA.

Pacific

With a view to breaking the current deadlock in Pacific‐EU EPA negotiations, Hans Joachim Keil, Samoa Trade Minister and Pacific Leadspokespeson for EPA Negotiations wrote to European Trade Commissioner Catherine Ashton on 10 March 2009 proposing to hold a Joint Technical Working Group meeting in late March early April in Brussels to seek convergence on outstanding technical issues (MFN treatment, export taxes, infant industry provisions, etc) to the greatest extent possible. Contentious issues must be addressed before additional PACP countries put forward goods market access offers. Senior political representatives could then decide on how best to conclude the negotiations so that the EPA can be signed this year.

Much of the Pacific countries focus currently is on negotiations for a Free Trade Agreement with their powerful neighbours Australia and New Zealand. Pacific negotiators have often said that the EPA negotiations with the EU was a good test run for this potentially far more significant regional trade agreement.

Dr Roman Grynberg, who until 1 March 2009 was the Director of Economic Governance at the Pacific Islands Forum Secretariat, and Chief EPA Technical Negotiator, has left the position and will now take a senior economic position with the government of Botswana. Dr. Grynberg has been a strident public defender of the Pacific and what he viewed as the EU’s bullying of the region in the EPA negotiations. In a series of currently running weekly editorials he takes no prisoners in his criticism of the EPA negotiating process and the current negotiations with Australia and New Zealand. “An EPA with Europe could have been a real development instrument (as Lamy had promised ten years ago) but the Europeans who negotiate now suffer severely from sclerosis of their imagination. The EPA as it is, solves nothing and has done nothing to endear Europe to any of the ACP regions.”

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

Baroness Ashton welcomes European Parliament support for EPAs

Speaking to the European Parliament, Commissioner Ashton had pledged that the new trade agreements with African, Caribbean and Pacific (ACP) countries would serve development and offer developing countries the opportunity for advancement and growth. Commissioner Ashton promised that moving forward, EPAs would reflect and respect the different partners' needs and interests in a flexible manner. Above all, she stressed that she had no interest in agreements that made any country in the ACP worse off, dispelling some persistent myths that the EU was trying to unilaterally redefine the EU‐ACP relationship

To download full document

Swimming against the tide: How developing countries are coping with the global crisis

According to the Bank’s research, the number of people living below the poverty line is expected to increase by several million worldwide as credit becomes more difficult to secure, global trade dwindles, and remittances decline. To combat these negative effects, the World Bank offers a number of suggestions, including increasing direct aid to developing countries who are in desperate need for this assistance to meet basic needs.

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EU and US push for Doha deal, closer bilateral trade ties

The European Union and the United States are partners in the world’s largest trade relationship. Every day, nearly $2.7 billion in manufactured goods, agricultural products and services originating on one side of the Atlantic are delivered on the other side. U.S. and European companies have invested more than $1 trillion in each other’s economies, supporting millions of jobs. These enormous flows of trade and investment have played a critical role in promoting U.S. and European prosperity, and the markets, growth, and technological advances that transatlantic trade and investment have helped promote have in turn helped promote economic development throughout the world.

We met today at an extremely difficult time for the global economy, a time that is testing the resilience of the rules‐based multilateral trading system that has played such a critical role in building the global economy. Extraordinary times demand extraordinary leadership, and we have committed ourselves today to intensify our efforts to ensure that our bilateral trade relations and our cooperation on multilateral issues of common interest make the strongest possible contribution to global economic recovery.

We agreed on the importance of achieving an ambitious and balanced outcome to the WTO Doha Development Agenda as soon as possible. We also agreed on the importance of maintaining a sustained effort to follow through on the pledge G20 Leaders made in November to refrain from raising new barriers to investment or to trade in goods and services, and we endorsed the process recently commenced at the WTO for monitoring trade measures undertaken in response to the international economic situation. At a time when the temptation to turn inward, and away from the rules‐based system, may be stronger than it has been in decades, we also agree that the United States and the EU must lead by example, turning outward more intelligently to continue to strengthen the rules‐based system and create new market opportunities.

We also committed ourselves today to a renewed effort to working through, and where possible resolving, the bilateral issues that are part of the landscape of our trade relationship. It is important to recall that our disagreements cover only a small fraction of our total trade and investment, that those disagreements do not prevent us from cooperating, and that the areas in which we cooperate far outnumber the ones in which we disagree. But with global trade flows declining for the first time since 2001, endangering U.S. and European jobs, we should redouble our efforts to solve bilateral problems that impede trade between us. We both confirm our commitment to working closely together to drive forward the multilateral and our bilateral trade agenda.

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Seattle to Brussels Network statement for the G20

Negotiations and agreements to liberalise financial services, in GATS as well as in free trade agreements (FTA), in the opinion of S2B Network “show many contradictions with the current official statements to strengthen regulation. We express our concerns that GATS and FTA rules which apply to liberalised financial services actually mean deregulation. For instance, fully liberalising financial services means that governments cannot impose limits on the total value of financial services transactions or assets (GATS Art. XVI), thus allowing the financial industry to become too big to fail. Also, the GATS requests made by the EU to many countries, including developing countries, in 2002 and 2005, were clearly asking to ‘eliminate’ many particular financial regulations, including some established after the experience of the Asian financial crisis and related to capital reserves”.

The GATS and FTA non‐discrimination rules also require that those who have fully liberalised financial services cannot discriminate between those foreign banks that receive subsidies or have been nationalized in the home country, as now happened during the crisis, and those who do not receive subsidies – which clearly puts the banks of poorer countries at a disadvantage. “The Cariforum‐EU EPA – underlined the S2B Network ‐ might undermine the EU’s call for tackling tax havens since eight of the Cariforum countries are tax havens according to the OECD, and the EPA provides for current account liberalisation for all residents (Article 122), capital account liberalisation for investors (Article 123), and liberalisation of financial services including ‘trust services’ and ‘over‐the‐counter’ trading of derivatives (Article 103).

We would like to ask for your interpretation of the GATS “Understanding on Commitments in Financial Services” according to which the EU and many WTO industrialised member countries have already scheduled their liberalisation commitments, and which includes a “standstill” on regulation and a commitment to allow any new financial service. Is the prohibition of short‐selling by the US and EU countries in fact illegal according to GATS rules and the Understanding, since even the ‘prudential carve out’ (Annex on Financial Services, Art. 2) does not allow prudential measures to be taken if they undermine liberalisation commitments? Are liberalisation commitments of over‐the‐counter trading of derivatives coherent with European leaders’ call to ensure appropriate regulation and oversight of all financial markets, products and participants ? Will the GATS rules continue to underpin the dangerous expansion of the financial industry until they are too big to fail?”

For the reasons mentioned above, they conclude “now is not a time to liberalise financial services in any trade and investment agreement, nor to conclude the WTO round based on the current negotiations. We hope the above concerns will be clearly reflected in the agenda of the EU, and G‐20, on financial reforms”.

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Global Review on Aid for Trade 2009, Issues and state of implementation in Africa: Does Supply Meet Demand?

There is a great deal of data about how trade and aid for trade efforts affect the developing world. The OECD, who makes it available for donors, recipient countries and researchers all over the world, holds a great deal of this information. This database is also the basis of the Global Review of Aid for Trade. This information, while good, is a bit too broad if one wants to draw conclusions for specific areas and issues. As African countries prepare for the second Global Review that is scheduled to take place in the first half of this year, it is imperative that much thought be put on how the implementation of AfT could be made to optimally address the trade challenges of the region.

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April: Next EPA negotiation rounds:

News

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