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