Papua Nuova Guinea and Fiji signed an I EPA

Commissioner Ashton said: "This agreement is an important step towards a strong and lasting EU-Pacific trade and development partnership. We have already seen how the initialling of the agreement has delivered results, with new investment flowing into the fisheries industry, supporting development in Papua New Guinea and creating jobs."

The interim Economic Partnership Agreement was initialled in November 2007 by Papua New Guinea (PNG) and Fiji who are two of the fourteen Pacific ACP countries but represent the vast majority of the regions exports to the EU. The agreement has been provisionally implemented by the EU since 1 January 2008 and it has already attracted investment into Papua New Guinea, especially in the Madang Marine Park.

Under the agreement all imports from Papua New Guinea and Fiji will have immediate duty free quota free access to the European market (with short transition periods for rice and sugar). Papua New Guinea removes customs duties on 88% and Fiji on 87% of their imports from the EU over the next 15 years.

Background

Total trade between the EU and Pacific ACP countries in 2008 was around €1 billion. The most important Pacific exports to the EU are animal and vegetable oils, sugar, coffee, tea and spices and copper. The EU's main exports are mechanical machinery, electrical machinery, vehicles and oil. The EU is a major trading partner of Papua New Guinea and Fiji, who together represent 83% of all EU - Pacific trade.

The Pacific ACP region includes 14 countries. The Least Developed Countries of the Pacific include Kiribati, Samoa, Solomon Islands, Tuvalu, Vanuatu and the developing countries of Cook Islands, Fiji, Marshall Islands, Federated States of Micronesia, Nauru, Niue, Palau, Papua New Guinea, and Tonga. Another ACP country, Timor Leste, has observer status in the EPA negotiations"

West Africa EPA negotiations deadline extended from June to October 2009

So as to ensure that both parties benefit from the EPA trade regime and the implementation of the EPA Development Programme, the Heads of State and Government directed the ECOWAS and UEMOA Commissions to step up the negotiation process so as to ensure the signature, in line with the agreed timetable, of a regional agreement that would in the initial phase, cover trade in goods and development cooperation within the scope of the EPA. In this regard, they urged the Chief Negotiators to finalise discussions on outstanding issues in particular, the improvement of the development-oriented market access offer. They called on the European Union and its Member States to demonstrate clear commitment to the financing of the EPA Development Programme.

West African leaders also reaffirmed their commitment to the consolidation of the regional integration process. With regard to the regional Common Market, the summit approved the expansion from four to five bands of the tariff regime for West Africa. This will see the Common External Tariff (CET) for the region increase from the four tariff regime bands of between 0 and 20 per cent for goods imported into the region from non-ECOWAS member states to include a fifth band to allow for Member States to increase their peak tariff on imported goods from 30% to 35 % for certain categories of goods imported into the region. Leaders urged the Commission to speed up discussions on the regional methodology to determine what products would fall within the 5th band and their re-classification. Specifically, the Heads of State and Government called on Member States to ensure the effective application of the ECOWAS Protocols on the Free Movement of Persons and Right of Residence and to put an end to all forms of harassment along corridors and borders. A joint committee of the Technical Committee on Trade, Customs and Free Movement will meet later to undertake the process of reclassification to determine the goods that will qualify for this agreed new peak tariff.

The European Union and West African negotiators agreed to conclude a regional agreement on trade in goods and development cooperation by October 2009 at their meeting on 17 June 2009. Doubts about its readiness to sign EPA by end June deadline were expressed by the Nigeria’s Minister of Commerce and Industry, Chief Achike Udenwa as conditions that must be on the ground for the overall development of the country and the region are not yet in place. He drew attention to contentious issues that needed to be settled before the conclusion of the EPA such as development issues, supply-side constraints, infrastructure facilities, capacity building, regional integration and adjustment cost of liberalization. Chief Udenwa said government is being cautious due to the adverse economic impact the EPA is likely to make on the economy of the country. Earlier, Ghana President, John Evans Atta Mills, criticised clauses in the draft EPA claiming it is meant to allow European countries dump their cheap and highly subsidised goods and services on Ghana. Both sides reaffirmed their commitment to moving forward the longer term process to build a lasting partnership between the EU and West Africa.

Nigeria and the EU agreed to intensify political dialogue and cooperation through a broader political framework called the "Nigeria-EU Joint Way Forward" at their meeting Ministerial Troika Meeting on 9 June 2009. The purpose is to establish the principles, objectives, modalities, guidelines and priority subjects for enhanced political dialogue and cooperation between the Parties. The Parties also reaffirmed their commitment to urgently conclude the negotiations for a comprehensive regional EPA that would foster economic governance, regional integration, contributing to the eradication of poverty and to the achievement of the Millennium Development Goals.

ECOWAS EPA Negotiating Ministers called for an unequivocal EU commitment to funding EPA development programme to ameliorate the effects of the agreement on West Africa before singing an EPA at the Ministerial Monitoring Committee meeting in Abuja on 15 May 2009. Such a contribution to the EPA Development Programme (EPADP) should be "adequate and accessible" beyond the commitment already made in the European Development Fund (EDF). They stressed the need for a financing plan to be presented by the EU prior to the signature of the agreement. On the issue of the liberalisation of market access for European goods, the ministers reiterated their position that only between 60 and 70% of the regional economy should be affected over a transition period of 25 to 30 years preceded by a 5 - 7 period of moratorium.

Cote d’Ivoire is in principle due to start the liberalisation under the Interim EPA in September 2009. Given that supplementary time is required to complete the rules of origin negotiations together with the period of about a year required by the European Commission for all its administrative processes before the start of the implementation of the rules or origin agreement, the West African Ministerial Monitoring Committee recommends to Cote d’Ivoire to envisage within the framework of its EPA Committee the postponement of at least a year of the beginning of the liberalization to ensure that appropriate rules of origin are set in place. The agreement will enter into provisional application on receipt of notification from Côte d'Ivoire that the necessary procedures have been completed. However, the primary focus is currently on negotiation of the full regional EPAs that will replace these interim agreements.

EU-West Africa Economic Partnership Agreement (EPA): negotiators meet in Dakar (Senegal)

Participants in the technical and senior officials' meeting followed up on the Ministerial meeting which took place in Brussels in June. On that occasion, it was agreed that a regional deal on trade in goods, development cooperation and other trade-related rules will be concluded by the end of October 2009. In Dakar, negotiators made good progress on a number of areas including the EPA Development Programme (PAPED) and rules of origin.

Negotiations continue on issues such as market access, regional levies and the Most Favoured Nation clause as well as development co-operation. Next round of technical negotiations is scheduled for 21 September 2009.

Background

The EU-West Africa bilateral trade is represented by import-export of goods worth €43.6 billion (both ways, 2008 data), however more than half of this is in EU-Nigeria trade (oil). Excluding Nigeria, the EU mainly exports industrial goods including mechanical machinery (14%), electrical machinery (9%) and vehicles (7%) to the region. Excluding oil from Nigeria (55% of West African exports) the region's main exports to the EU are represented by and cocoa (11%), iron (8%) and rubber (6%). Only two West African countries, Côte d'Ivoire and Ghana, initialled bilateral "stepping stone (or "interim") EPAs" with the EU at the end of 2007. The interim EPA with Ivory Coast (Côte d'Ivoire) was signed on 26 November 2008.

(source DG Trade EU Commission)

Link to: http://ec.europa.eu/trade/wider-agenda/development/economic-partnerships/

EAC states demand development deal before signing EU trade pact

According to the bloc’s Secretary-General Mr Juma Mwapachu, although the partner states are willing to sign a deal on the framework, concerns over development assistance have prevented them from doing so. "We need some breathing space so that we work towards what is best for us with regard to development. They need to have some provisions to address the supply side constraints", he said.

He said the provisions under the European Development Fund (EDF) are not sufficient to reward the region should it enter into comprehensive Economic Partnership Agreements (EPAs) with the European Commission (EC).

"We are willing to sign the framework and our ministers have been in Brussels to re-affirm that, as long as development needs are addressed", Mwapachu told a media briefing in Nairobi.

Experts at the United Nations Conference on Trade and Development (UNCTAD) have already urged countries negotiating EPAs to ensure that the deals have specific components on development that would help alleviate the costs inherent in entering such pacts.

"Infrastructure improvement should be among the key priorities of these EPAs. Helping Africa to put in place the hard and soft infrastructure needed to strengthen economic integration among African countries could pave the way for higher FDI flows and more intra-African trade", the agency said.

Permanent Secretary at the Ministry of EAC Affairs Mr David Nalo said countries still have concerns over the Most Favoured Nation (MFN) clause and are thus reluctant to sign the FEPA.

According to the World Trade Organisation (WTO), the MFN is a status handed by one nation to another in international trade, such that the receiving nation will be granted trade advantages (for instance, low tariffs) that others nation do not receive.

The EAC’s hard stance is likely to add onto the EC’s woes which just three weeks ago renewed pressure on Kenya and other East African states to sign the FEPA citing "a slow pace of proceedings".

However, Kenya’s Trade Permanent Secretary Dr Cyrus Njiru has downplayed Europe’s latest concerns, saying that Kenya and other EAC states are optimistic of signing the FEPA on time.

"The deadline is not cast in stone. We are willing to sign when we are ready to", he said in an interview with Business Daily, noting that most of the issues in the negotiation text have already been agreed upon.

President Kibaki recently said that Kenya would conclude negotiations with Europe and sign the framework by the end of this month. But meeting this deadline now seems unlikely going by Mr Mwapachu’s sentiments.

Nevertheless, Mwapachu said they are still committed to negotiations because of the potential impact on the regional economies should they fail to sign. "We are talking and we are sure something will come through that is good for all of us", he said.

Analysts believe that failure to sign the FEPA could result in trade disruptions for Kenya and other EAC countries. Trade with Europe would revert to the less generous market access terms under the Generalised System of Preferences (GSP), which Kenya estimates would see some of its products currently being exported to the EU at zero rates attracting duties ranging from 8.5 to 15.7 percent.

By Odhiambo, Allan; Reuters (Business Daily, Nairobi)

Link to: http://www.businessdailyafrica.com/-/539552/630762/-/56sbqg/-/index.html

Calls for Namibia not to sign interim-EPA hold merit, says analyst

"The calls from Namibian civil society organisations and the NCCI for the government not to sign the interim agreement at this stage hold more than merit," said Namibian independent trade policy analyst Wallie Roux in an article in the Namibia-based newspaper New Era.

Roux noted the complex history of the negotiations surrounding the EPAs and I-EPAs, as well as Namibian Trade and Industry Minister Dr Hage Geingob’s said reluctance to sign the EPAs on the basis that, in their current form, the EPAs directly affect the country’s future South-South trade and cooperation, as well as its regional integration efforts.

European Trade Commissioner spokesperson, Lütz Güellner, was said to have countered Geingob’s comments, stating concerns over the ambiguity of Namibia towards the I-EPA and a possible legal challenge to end the country’s current ‘duty-free quota-free’ market access to EU markets.

This was of concern for Namibian business owners, which export to the EU, particularly beef exporters supplying German markets.

Recently, Botswana Trade and Industry Minister Daniel Neo Moroka explained why Botswana had signed the I-EPAs, and noted that the country wished to protect its commercial interests considering the country's major exports of beef and diamonds were destined largely for EU markets.

He noted that reverting to the generalised system of preference (GSP), and losing preferential access into the EU could mean a loss of income of some P500-million, which would have an adverse social impact on about 600 000 people in Botswana.

On June 4, Botswana, Lesotho and Swaziland (BLS) signed the I-EPA, and Mozambique signed on June 15. Namibia, South Africa and Angola did not sign.

"This provisional application will cause discrepancies in the Sacu common external tariff. Also, given the non-resolution of the Most favoured Nation (MFN) clause, should Sacu extend better terms in a trade agreement to a third party, the BLS countries will have to extend the same to the EU. This will lead to further discrepancies in the Sacu common external tariff," noted Roux.

Prior to the signing, negotiations took place in Swakopmund from March 9 to March 12.

Referring to these EPA negotiations, Roux said that the agreement was reached on draft texts concerning quantitative restrictions, food security, free circulation of goods, export taxes and infant industry protection. No agreement was reached on the MFN clause and the Definition of the Parties. Despite the draft texts on the five issues, one still requires European Commission (EC) agreement, while another is subjected to a joint review of customs legislation and procedures.

"Despite the Swakopmund ‘agreed’ texts, 19 other articles remain unresolved in the I-EPA text. Some of the essential outstanding articles include: regional integration, agricultural safeguard measures, and transitional arrangements, as well as four articles on customs duties, cooperation and procedures. The EC only wants to discuss these in the negotiations towards a full EPA, despite having a profound influence on the interim EPA text," explained Roux.

He added that the EC made it clear that the Swakopmund ‘agreed’ EPA texts would only be incorporated into the final EPA, thus giving it a non-legal status in the interim EPA. "Instead the EC opted for the adoption of two declarations that only refer to the Swakopmund ‘agreed’ texts, yet again giving it an uncertain legal status."

The EU’s refusal to Namibia, South Africa and Angola’s requests to amend the I-EPA or to annex a statement with the said concerns to the agreement, was the issue.

"This unfortunate development has moved the EPA negotiations beyond the point of determining whether an interim EPA or full EPA would be beneficial for the Southern African countries. At this time the decisive factor is about legal coverage in case of a dispute with the EU. This is a sad state of affairs given that the original ’partnership agreement’ as contained in the Cotonou Agreement is no longer at play," said Roux.

By Christy van der Merwe

Link to http://www.engineeringnews.co.za/article/calls-for-namibia-not-to-sign-interim-epa-hold-merit-says-analyst-2009-07-27

Europe’s abusive EPA condemned as it tears Africa apart. Now, Africans are hitting back at Europe

Namibia is the current African country to demand publicly that Europe stop its ‘bully’ trade negotiations, saying it will only sign any (EPA) agreement with Europe if new wordings are introduced and the contentious issues resolved.

Earlier this week, Namibian Industry Minister, Hage Geingob, spoke against the disparity in the trade agreement, saying: "The EU says that they cannot change the texts because it’s too much work to prepare new translations. That’s really a lame excuse, instead of consulting us, they informed us that there was a date for signing - May 7. That’s not how you deal with partners. We might be small, but we are still a sovereign state. You cannot smoke cigars in boardrooms in Brussels and bulldoze us."

Monopoly

The EPA Trade agreement is not only imposed on African governments but will join these regions’ economies and give Europe’s big business a monopoly, which experts say it is anti-development. But the EU wants to renegotiate after its criticism by both the UN institutions and African experts and that’s why it has introduced the interim trade agreements, which means it could strike an interim agreement with groupings such SADAC, ECOWAS or EAST African trade group.

The interim agreement, however, is still causing trouble and tearing the groupings apart. While some African countries agree to the interim deal, others still find it worrying. "We met in Gaborone last week to rescue the unity in SADC and agreed that those that want to sign can go ahead. Botswana, Lesotho, Swaziland and Mozambique will sign. The ANSA-countries (Angola, Namibia and South Africa) equally get space to iron out some issues with the EU," said Hage Geingob, the Namibian Industry minister.

Unrealistic

In West Africa for example, the deadline date of June 30, for all parties to agree on a uniform negotiations is becoming unrealistic. At an Abuja meeting last month, the Economic Community of West African States (ECOWAS) commission’s president, Mohammed Ibn Chambers warns that West Africa would feel the pain if they fail to agree on a common regional agreement.

"Without concluding an EPA *Economic Partnership Agreement], our region will have different trade agreements with the European Union that will adversely affect our regional integration process. So we need indeed to conclude a regional agreement to avoid having different agreements because of the differential rate of development in our region," Chambas said.

The Gambia with a population of 1.5million has already said EPA will affect its country’s financial stability. Because most of its revenues are generated from imports of foreign goods, EPA’s reciprocity principle will mean The Gambia will eventually have nothing to gain since it is not an exporting nation.

Lamin Dampha, a senior economist at the Ministry of trade said: "The Gambia will not be able to take advantage of the opportunity because of the absence of a strong productive sector." The implications of any present EPA agreement will have a far-reaching effect on its economy, echoed Dampha.

Unequal partners

Nigeria which is an exporting state has however made its position known. Any agreement will mean equal partners and equal market deal. "It is pertinent to recall why the EPA negotiations are still going on 18 months after it should have been concluded in December 2007. It is so because this has been a negotiation between two unequal partners, the EU on one hand and the ACP countries on the other," said Nigeria trade minister, Achike Udenwa.

With the rest of West Africa finding trouble understanding the contents of the Europe’s agreement, Ghana and Ivory Coast have no problems signing an interim agreement.

Since 2007, the EPA has been a contentious issue but there seem to be a common voice among many African countries, that the European Union allows improved equal access to its markets.

Last week, between May 28 and 29, the ACP-EC council of ministers met in Brussels and agreed to changing certain financing modalities under the Cotonou Agreement1 in order to facilitate lending of the European Investment Bank to heavily indebted poor countries from the ACP group. "There was an open exchange of views to assess the state of the ongoing negotiations on Economic Partnership Agreements (EPAs) between the ACP States and the EC. Important developments are expected in the following months," stated the EU.

by Muritala Bakare

Link to: http://en.afrik.com/article15771.html

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.

NGOs welcome the new MEPs: let’s discuss our concerns

- a briefing paper introducing EPAs to the new Members of the European Parliament (MEPs) (Since the June 2009 European elections, 77% of the DEVE members and 60% of INTA members are new to these committees, and about 40% are new to the parliament)

- a discussion paper ("Criticial Issues in the EPA negotiations") to re-launch the debate on EPAs among European decisionmakers after the June elections

This discussion paper highlights 4 key issues, in relation to which the undersigned CSOs believe the EU needs to change its approach: 1. The development dimension 2. Market access in goods or the issue of tariff elimination 3. The non-goods issues 4. Contentious Issues: revising the interim agreements The way forward lies within the Cotonou Agreement not beyond

From the start of the EPA negotiations, the EU has been trying to go beyond the WTO and Cotonou requirements to obtain agreements that fit its broader trade policy objectives at the expense of its development objectives. The agreements concluded so far risk hindering, instead of fostering regional integration and sustainable development in ACP countries. A strong turnaround in the negotiations is therefore urgently needed, rather than merely introducing hesitant flexibilities on a few issues.

The EU must at a minimum respond favourably and unconditionally to ACP requests for re-negotiation of contentious issues, and refrain from pushing countries that have initialled EPAs to sign and ratify these agreements in haste and without amendments. But, beyond this, the EU should refrain from further overloading and complicating the negotiations by demanding that ACP countries include issues and rules in the agreements that are not required for WTO compatibility, such as the MFN clause and rules on export restrictions, as well as services, intellectual property rights and the socalled 'Singapore issues'.

The EU should also respond positively to proposals for flexible market access arrangements and to requests for reliable and additional aid for regional economic development programmes. In the case that ACP countries express that they are not ready to conclude an EPA, because they believe the agreement will not facilitate their development, the EU must fully support any request for alternative solutions that ensure that these countries are not left worse off than under the provisions of the Cotonou Agreement that were in place before the end of 2007.

The discussion paper is supported by the following organisations:

Afrikagrupperna/Africa groups of Sweden; AITEC, France; ATTAC France; 11.11.11, Belgium; Both Ends,

Netherland; Coordinadora de ONGD de Euskadi, Spain; CNCD 11.11.11, Belgium; Comhlamh, Ireland; Fair,

Italy; Forum Syd, Sweden; German Stop EPA Coalition www.stopepa.de; Germany; IBIS, Denmark; Micah

Challenge, Portugal; MS ActionAid, Denmark; Oxfam International; Setem-Catalunya, Spain; Traidcraft, UK;

Trocaire, Ireland; World Development Movement, UK; World Rural Forum, Spain.

Online resources for EU Parliament committees

INTA calendar for this year:

http://www.europarl.europa.eu/meetdocs/2009_2014/documents/dv/calendar2009_inta_/calendar2009_inta_en.pdf

INTA members:

http://www.europarl.europa.eu/activities/committees/membersCom.do?language=EN&body=INTA INTA Committee homepage:

http://www.europarl.europa.eu/activities/committees/homeCom.do?language=EN&body=INTA

Last INTA meeting is scheduled for 28 -29 September.

DEVE members:

http://www.europarl.europa.eu/members/expert/committees/search.do?committee=2857&language=EN DEVE Committee homepage:

http://www.europarl.europa.eu/activities/committees/homeCom.do?language=EN&body=DEVE

Last DEVE meeting was on 2-3 September

"(Brussels): At our first proper meeting (on 21 July) of the new term, we'll be discussing next year's EU budget and how climate change affects developing countries, along with an expert from Oxfam (Tim Core) advisor. We meet back after the holidays on 2-3 September to focus how the financial crisis has hit poor nations. We also exchange views with the Swedish minister for development cooperation Gunilla Carlsson, for the new presidency, and hold a hearing for new development commissioner Karel De Gucht."

http://www.europarl.europa.eu/meetdocs/2009_2014/documents/deve/oj/786/786675/786675en.pdf DEVE meeting calendar

http://www.europarl.europa.eu/activities/committees/calendarCom.do;jsessionid=33EE77E8419EBA8E5519EBDEFCD9C5EA.node2?language=EN&body=DEVE

Next meeting is scheduled for 5-6 october 2009

To download full document

ACP, EU set early 2010 deadline for concluding EPA talks

The two key demands are greater flexibility in the negotiations and guarantees that no country should be worse off at the end of the process. Haomae welcomed assurances by EU Trade Commissioner Catherine Ashton that these concerns would be accommodated in future consultations. "The ACP side is looking for decisive steps - guided by political will - that can move the process forward," Haomae added. The Joint Council agreed to continue EPA negotiations with a view to concluding deals by early 2010.

EU Council confirms commitment to reach 2010 Aid for Trade target despite delays

The EU will continue implementing its 2007 Strategy on Aid for Trade in all its dimensions, including on financial commitments and aid effectiveness principles. The Council welcomes the recent improvement of AfT monitoring and encourages further harmonisation both within the EU and globally. The Council further recalls the importance of supporting regional integration agendas, including by making progress on regional AfT packages. The Council also stresses the importance of progressing towards comprehensive, regional, WTO compatible and development-oriented Economic Partnership Agreements (EPAs) with ACP partners. European NGO networks, however, criticised the Council for not requiring EU Member States to meet individual targets, making it increasingly difficult to hold European governments to account over their development promises. The EU Development Commissioner, Louis Michel, also accused EU Member States of failing countries worst hit by the global economic crisis by delaying approval of a plan to release 500 million Euros of funds. The European Commission said in April 2009 it would accelerate aid to poor countries by releasing some previously earmarked funds earlier than planned. EU Development Ministers meeting said they took "positive note" of the European Commission's plan to present details of the proposal and that they looked forward to discussing it, but stopped short of a clear endorsement. "I think there is a kind of natural and spontaneous reluctance of some member states to deliver on their commitments," Commissioner Michel said.

More info: http://www.acp-eu-trade.org/library/files/ACP-EC_EN_290509_Council-EU_Main-results-of-the-ACP-EC-Council-of-Ministers.pdf

LDCs need new development path in wake of crisis

In its "Least Developed Countries Report 2009" released Thursday, UNCTAD said that the crisis has laid bare the structural deficiencies of the world's 49 poorest countries and has demonstrated their inability to achieve long-term growth and poverty reduction. To enable the LDCs to overcome their structural constraints and reduce dependence on external support, there is a need for a re-consideration of the role of the State, UNCTAD said.

For the LDCs, the market has not been able to generate sustained and inclusive growth, in part, because the market only works through incremental changes and small steps. These countries therefore need to "build developmental States" -- "a state whose ideological underpinnings are developmental and that seriously attempts to deploy its administrative and political resources to the task of economic development," UNCTAD added. According to the report, the current economic crisis is the result of weaknesses in the neo-liberal thinking that has shaped global economic policies over the last three decades; weaknesses that have been magnified by policy failures and lax regulation in the advanced countries. Most advanced economies are in recession and emerging markets have slowed.

The report points to the fact that reliance on commodities as the main source of export and fiscal revenues, along with the strong pro-cyclicality of commodity prices, contributes to the considerable volatility of output growth in many developing countries, but especially in the LDCs. Another factor is the high levels of indebtedness which represent a chronic structural weakness in LDCs. Despite an overall improvement during the recent boom, the debt burden remains unsustainably high in most LDCs, much higher than in other developing countries - an average of 42% of gross national income (GNI), compared to 26% in other developing countries. The current economic crisis creates both the necessity and the opportunity for a change of direction by LDCs and their development partners. The LDCs, although in a vulnerable position, must start to address their chronic structural weaknesses, says the report, recommending in this context: refocusing attention on developing productive capacities; building a new developmental State based on a better balance between States and markets; and ensuring effective multilateral support.

Neither the good governance institutional reforms which many LDCs are currently implementing, nor the old developmental State, including successful East Asian cases, are entirely appropriate models now for the LDCs. What is required now is a developmental State that is adapted to the challenges facing an interdependent world in the twenty-first century. The report argues that the developed market economies, which are most responsible for the global financial collapse, not only have a moral obligation to help the poorest countries through the present crisis, but also share a mutual interest in setting the LDC economies on a sustainable growth path. Failure to do so will risk increasing the number of unstable States and thus wider threats to peace and security.

It will be very difficult to realize a domestically-owned developmental vision and programme without the support of donors, says the report, noting that half the LDCs had less than 18.4 cents a day (compared to $3.20 per capita per day in lower-middle income countries in 2006, and $38.40 per capita per day in high-income countries) available per capita to spend on private capital formation, public investment in infrastructure, the running of vital public services such as health, education and public administration, as well as the provision of law and order. The report also discusses how macroeconomic policies of the LDCs can be modified in light of the global deterioration in real and financial conditions.

It will be important for LDC Governments to continue to devote a significant share of their budgets to public investment, which will enable them to maintain some degree of momentum in their previously achieved growth trajectories, which were brought about by the global boom in the export of primary commodities. It is imperative that donor countries stick to their previous commitments to ODA (official development assistance) and also increase donor financing to offset the negative impact of the global recession on LDCs.

The report lays out some general outlines for the kinds of tax policies that LDCs both in sub-Saharan Africa and elsewhere could usefully adopt. Countries should refrain from further reducing tariffs until domestic indirect and direct taxes are able to substantially boost revenue. Noting that tariffs can be expected to fall further in the coming years as countries join free trade areas and customs unions, the report says that since trade taxes still account for a significant share of tax revenue, the revenue losses from further liberalization, especially under conditions of declining trade, could be significant.

The report also highlights the importance of trying to direct ODA more towards building the domestic capacities of LDCs to mobilize domestic sources of development finance, saying that this implies much greater emphasis on mobilizing domestic savings.

On agricultural policies in the LDCs, the report underlines the need for these countries to raise their investments in agriculture to reduce hunger and prevent future food crises. Noting that 21 of the 31 countries worldwide currently facing food crises are LDCs, the report says that breaking the cycle of deficient food production, subsistence agriculture, low productivity, declining investment and increasing scarcity of land and water amongst others will require a more active government role than has been the case over the past 30 years. The report recommends increasing investment in agriculture, promoting technological change to boost farm productivity, enhancing local agricultural capacities and institutions and supporting regional integration of the LDCs. "Long-standing agricultural export subsidies and domestic support policies in the developed countries remain a critical obstacle to agricultural development in LDCs," says the report, noting that these subsidies are associated with rapidly increasing food imports in LDCs, alongside declines in agricultural production.

Pointing out that the tariff regime is an important tool for raising government revenue and fostering agricultural development and industrialization, the report finds that tariffs in LDCs however have been declining as a result of multilateral, regional and bilateral agreements, structural adjustment programmes and through autonomous reform efforts.

"In view of the negative effects of the food and financial crises, trade policies and associated export taxes could be rationalized and reviewed to ensure availability of imported food staples at affordable prices and to promote agricultural production."

Another key message is that the LDCs must take effective steps to expand domestic industry to weather the current global recession and to grow over the long term. A more diversified economy remains the best insurance policy for LDCs to reduce their vulnerability to future shocks.

Simultaneous efforts in the LDCs to raise investment levels, build new economic links, and upgrade technological capacity - which is at the heart of industrial growth - are the surest way of promoting a more effective involvement in the world economy and the best way to avoid the economic dangers of the lopsided reliance on commodities exports and private capital flows that have been exposed by the current crisis.

However, to carry out such economic transformations, the LDCs need sufficient "policy space" to make decisions that fit their domestic situations and can best lead to economic growth.

Download the full report: www.unctad.org

Turning African Agriculture into a Business

Agribusiness remains in its infancy in most sub-Saharan African countries, many of which now pay higher prices for imported food products and struggle to keep inflationary pressures under control. Given the strong long-term prospect for world food prices, the paper argues that increasing food crop productivity should be a top priority. But this requires sizeable investments. Greater involvement of the private sector in designing and implementing such food-crop commercialisation programmes could develop viable local food industries, the authors contend. The continuous and effective support of the international development community is also needed.

Link to:www.oecd.org/dataoecd/58/56/42987772.pdf?contentId=42987773

Declaration of the Platform of West African Civil Society Organizations on the Cotonou Agreement (POSCAO-AC)

After a new round of negotiations which was started in January 2008 and lasted for 18 months, both parties came to the conclusion that there were still major divergences were on most of the issues. West Africa in particular estimated that most its concerns were not sufficiently taken into account to justify its commitment in an EPA by then.

According to the NGOs signing this statement: "If West Africa is not careful, it runs the risk of chasing rainbows by engaging in an excessive liberalization of its trade with Europe in the hope of speculative funds which will only turn out to be nothing but an empty shell. Europe does not have the 9.5 billion Euros that West Africa needs to finance the pro-development EPA programme and has not made any commitment any in that direction. At best, it will take the money intended to finance other programmes within the framework of the European Development Fund and Member States’ bilateral aid to fund the EPA , which will hardly cost her any efforts".

Link to the declaration

G8 Summit “L’Aquila” Joint Statement on Global Food Security

The fund’s initial investment will be US$15 million. The declaration comes at a time when the combined effects of long-standing underinvestment in agriculture, price volatility and the economic crisis have led to increased poverty and hunger in developing countries. According to the UN, the number of malnourished people has risen over the past two years, reversing a four-decade trend of declines. The announcement was an opportunity for leaders to further promote the development of a global partnership focused on agriculture and food security with the aim of prioritising the importance of agriculture on the international agenda, launching new investments and improving the efficiency of aid programs and regional coordination by involving all the partners. Every country represented in L’Aquila subscribed to the initiative.

Link to: http://www.g8italia2009.it/static/G8_Allegato/LAquila_Joint_Statement_on_Global_Food_Security%5B1%5D,0.pdf

Comparing safeguard measures in regional and bilateral agreements

With the ‘serious injury’ determination, guidelines can be found in the applicable WTO rules and dispute settlement procedures, but the determination of ‘serious disturbances’ is somewhat vague and unclear. What exactly is meant by ‘serious disturbances’ and how would the investigating authorities determine such threshold? No direction in determining the threshold of ‘serious disturbances, or even a definition to assist the petitioners, is provided for in any of the examined agreements. The agreements are further silent on the requirement of a ‘causal link’. Only some of the agreements specifically mention the right to resort to global safeguards.

The EPAs provide for the use of multilateral safeguards including the Special Agriculture Safeguard under Article 5 of the WTO Agreement on Agriculture. However, as some ACP countries are not party to this agreement, they will be unable to use the mechanism. Those ACP countries who did not undertake tariffication during the Uruguay Round are also unable to employ the Special Agriculture Safeguard – despite being parties to the Agreement on Agriculture. In these instances the mechanism will only be available to the EU. The EU does initially exempt the ACP imports from safeguard action, but only for the first five years. This is in contrast to some of the other agreements which provide for the exclusion from safeguard actions under specific conditions.

The EPAs also provide for the suspension of further reduction of the applicable rates or duties as well as an increase in the rate of duty for the concerned product. A similar qualification is maintained as the one in the TDCA – duties may not increase to a level which exceed the duties that are applied to other WTO members. In addition to the typical remedies stated above, the EPAs include tariff quotas to be imposed on the product concerned. No specific rules or guidelines are, however, incorporated to regulate the allocation of quotas between suppliers.

The EPAs also confirm that safeguard measures are only to be taken for such time as may be necessary to prevent or remedy ‘serious injury’ or ‘serious disturbances’. This is, however, more precisely defined as a period not exceeding two years. This can be extended for another two years if the conditions justifying the imposition of the safeguard continue to exist. If the CARIFORUM member states apply the safeguard measure, or where the EU applies a measure limited to the territory of one or more of its outermost regions, the measure may be applied for an initial period of four years, extendable to a maximum of eight years. The TDCA states that a safeguard measure can be applied for a maximum of four years, but this can be extended by the designated authority in exceptional circumstances.

In the case of the EPAs, safeguard measures which exceed one year must progressively be liberalised. The other examined agreements are silent on this point arguably due to the general nature of the procedural obligations. The ‘cooling-off’ period provided for in the EPAs is one year while the period stipulated in other agreements is three years.

Only the EPAs contain slightly more comprehensive provisions that deal with the duration of the provisional measure. The limit is 200 days when measures are taken by the CARIFORUM member states or when measures are taken by the EU concerning the territory of its outermost members. The duration of the provisional action is limited to 180 days when the EU takes the measure. By implication this means that the EU is allowed to impose provisional safeguard measures, even though the EU is prohibited from imposing bilateral safeguard measures.

by Paul Kruger, Willemien Denner and JB Cronje (ICTSD)

Link to http://ictsd.net/downloads/2009/07/safeguardweb.pdf

Scenarios for West African Region EPA Negotiations

The variety of economic interests and capacities that comprise the complex position of the West African Region, which includes 16 countries, has made efforts to complete EPA negotiations with the EU challenging. The four scenarios, constructed by 20 experts from 10 countries-all closely involved with the negotiations, illustrate the options available to the region and the impacts and consequences resulting from the pursuit of any one course of action. The scenarios consider the regional impacts of full trade liberalisation, partial trade liberalisation agreement, three separate EPAs with no integration, and no trade agreement. The scenarios aim to encourage a broader discussion of the options while assisting efforts to preserve and advance regional integration while ensuring continued access to European markets.

Link to http://library.fes.de/pdf-files/bueros/benin/06493.pdf