Stop EPAs Day: 7 years to blame

Despite pressure from the EU, only one out of six regions has concluded a full regional trade deal so far. Whilst a number of countries were pressured into interim Agreements at the end of 2007 under the threat of losing market access to the EU, more than half of the ACP countries have not agreed to any form of EPA, such is their degree of concern with these agreements. Many ACP countries are calling for the deals not to be signed and for contentious clauses to be renegotiated.

Through a collective mass fax and e-mail action, more than 80 organisations in 30 countries across Europe, Africa and the Pacific have called on decision-makers to fundamentally change the course of the ongoing negotiations on Economic Partnership Agreements (EPAs) between the European Union and ACP countries. The EU approach to these negotiations is the main problem, activists say.

EPAs were supposed to promote ACP countries’ development and regional integration, but the EU’s approach to the negotiations has undermined these objectives. "Concluding EPAs on this basis – the NGOs wrote in the document - would severely constrain ACP countries’ scope to maintain or introduce measures to support their economies and to defend jobs, food security, environmental sustainability and any efforts to build regional integration in Africa.

In their faxes and e-mails, activists and campaigners accuse the European Commission of pressuring ACP-Countries to take on new obligations that go beyond WTO compatibility requirements. They urge European decision-makers to allow flexible market access arrangements and to meet ACP requests for the re-negotiation of contentious issues included in the agreements. ACP civil society organisations call on their governments to stand firm and not to give in to EU pressures. They demand that the ACP governments suspend negotiations as long as the financial crisis rages in their countries.

Link to the document: http://www.amicideipopoli.org/web/index.php?page=home-2

Mauritian body contests EPA pact

According to them, some technocrats and some ministers are forcing the country to sign the almost irreversible agreements without allowing the people and their representatives in parliament to know their contents and consequences on the Mauritian economy and future generations.

Muneean and Subron said the technocrats and the elites had not learnt the lessons of the past.

"The agreements with the World Trade Organisation (WTO) signed hastily by Mauritius and other countries have been negative for many developing countries," they said, recalling that the interim agreement to be signed Saturday was never discussed between the government and the civil society in Mauritius. 3

They denounced the fact that unions, owners of small businesses, organisations grouping fishermen and other citizen movements were totally excluded from the negotiation process.

"Those who will benefit from the EPA are not those who will have to suffer its consequences," they said.

Citing a study by the Mauritian government which dates back to 2004, they said Mauritius would gain nothing by signing the agreement that will make customs revenues on the island fall by 54% and threaten about 60,000 jobs.

"The EPA will not improve the living conditions of the population. It will only lock up our economies in a neo-colonial strategy of exports based on cheap labour force and degradable working conditions for our populations.

''It (pact) is not concerned with the development of Mauritius and Africa but it will generate more benefits for the European companies and some local interests, " Muneean and Subron said.

Link to: http://www.afriquejet.com/news/africa-news/mauritian-body-contests-epa-pact-2009082834117.html

EU-West Africa EPA: negotiators met in Brussels

The talks, at technical and senior-officials' level, addressed West Africa's market access offer and other issues such as agriculture. Both sides converged on the need to include a non discrimination clause in the agreement. Regional levies, development co-operation (the EPA Development Programme or PAPED) and rules of origin were also part of an agenda that both sides consider important for their future relations.

Further talks are scheduled to take place on 23 and 24 October in Abidjan (Côte d'Ivoire) and at senior-officials' level on 6 November (venue to be decided).

Launching the COMESA Customs Union: The Secretary General Talks

TNI: The launch of the Customs Union has been postponed several times in the past. Why is now the time right to launch the Customs Union?

Ngwenya: The launch of the COMESA Customs Union has become an irreversible process. First and foremost, what is forgotten in Africa is that regional cooperation, regional economic integration is essentially a politically driven project. Politically driven on the basis of shared values and objectives in terms of creating wealth, in terms of creating a zone of prosperity. The financial crisis, which resulted in one of the worst global economic recessions, is also a wakeup call for our countries because what is being demonstrated through regional integration is that there have been no cancellation of orders for products traded within the region although we know there has been cancellation of orders for exports outside because demand for our products is now depressed. We also know that it is difficult for us to get credit – trade credit there is an estimated shortfall of anything from US$80-100 billion in terms of trade financing but we have also launched our Regional Payments and Settlements System which will no longer use letters of credit because it will be financed through the accounts by commercial banks which are pre-funded by central banks. In the current trade of US$15.2 billion, we estimate that the region has been paying US$500 million for confirming letters of credit and the trade transaction. Now we estimate that our clearing house is going to reduce that trade (there will be a 1 percent or less transaction fee – because they still have to charge for the service) US$75-80 million. So all these combination of factors have situated the customs union in a better position because it is not only the CU but also supported by financial payment facilities that we have established.

TNI: How do you expect to collect and distribute revenue collected?

Ngwenya: It is very simple. You can collect revenue from customs duties at the port of entry, then you transfer it to the destination country. This will be achieved in the medium term as it would require that COMESA puts in place a revolving fund which will ensure that the revenue is promptly transferred to the receiving country. If you collect US$20 million, you transfer US$20 million to that country. It will work because we launched the Regional Payments Settlement System in Victoria falls, which can be used to credit the account within 24 hours. In fact, governments will be better off under that revenue collection system because at times it takes about one month for goods to move in transit from the port of entry to the country. In the mean time the government does not have revenue. Whereas if you collect it there, within 24 hours the government will have the revenue. Now the second way to collect revenue is to collect revenue and put it in a common pool where you distribute it according to a formula. Now we cannot do that at this point in time, for the simple reason that our governments still depend heavily on trade taxes but this is the ultimate objective of COMESA.

TNI: How will COMESA facilitate this process?

Ngwenya: In order for us to fast track revenue collection and forward, it to the recipient countries, we suggest that under the aid for trade programme – in partnership with the EU, our biggest partner – we could set up a revolving fund which is not going to be a grant, but which is going to be used only to make sure that the monies are paid. If you put up a revolving fund for US$200 million you should be able to get the governments to get all their money, because you have a fund from which you are paying what has been collected, and you then put the money that you have forwarded into that revolving fund, and then do away with transit and all these problems. You do away with the current problems of goods in transit that get diverted into transit countries and cause injury to domestic businesses that are paying their taxes. It will also eliminate the corruption that is associated with the movement of transit traffic – some of these reforms will strike at the core of corruption.

COMESA advisor urges unity over EPAs

Announcing the decision of six of the 16 ESA members – Comoros, Madagascar, Mauritius, Seychelles, Zambia and Zimbabwe – to sign interim EPAs with the EU in Mauritius this Saturday, Tekere said Europe is a major trading partner for the region and accounts for 40 percent of total trade.

"But we cannot have trade without a proper regime to guide us and also we want to move away from dependency to partnership so that we can be able to negotiate on our terms and with what we have", he said.

"But the biggest challenge is that some countries are not signing and this undermines regional integration and cohesiveness because it shows that we are not united as a group but those countries not signing have given reasons of various strategic national interests."

The interim EPAs would allow 100 percent market access for all goods from the ESA region but with temporary exceptions for rice and sugar, Tekere said. The EU would provide about €2 billion for costs of adjustment and development assistance.

"We need about 30 billion Euros for development assistance and to meet costs of adjustments but we have not secured these funds, anyway we should not put our lives in the hands of Europe but we should decide our own destiny hence the need to look for alternative resources within the region", Tekere said.

Despite the proposed signing of the interim EPAs with the EU this Saturday, numerous contentious issues still remain unresolved. The EU has failed to agree with ESA on many issues such as export taxes to protect infant industries whereby taxes can be imposed on raw materials to encourage value addition.

The EU has also insisted on inserting a standstill clause into the EPAs that would prevent the ESA region from negotiating any other agreement with other concerned parties, and the most favoured nation (MFN) clause which would entail ESA countries extending to the EU whatever trade agreements they may enter into with any other countries or regions.

Tekere, however, said the list of issues not agreed upon has now been reduced. "We have agreed to modify tariffs and we shall not open up sensitive industries which we think are critical to our economies and on the MFN clause we shall only open up to 80 percent market access", he said.

Zambia and Comoros refuse to sign the EPA

According to information posted on the European Commission's website, the EU has signed an interim EPA with countries from the ESA grouping.

"These countries are Mauritius, Seychelles, Zimbabwe, and Madagascar. Zambia and Comoros have indicated they will sign at a later date," it stated.

It stated that the agreement was signed in Grand Baie, Mauritius, by EU trade commissioner Catherine Ashton and Swedish deputy trade minister Gunnar Wieslander on behalf of the EU.

The deal offers the ESA countries that signed the agreement immediate and full access to EU markets [with transition periods for rice and sugar], together with improved rules of origin.

ESA countries will open their markets gradually over the next 15 years, with a number of important exceptions reflecting their development needs.

Commenting on the development, commissioner Ashton said the EU had now laid the foundation to build a more comprehensive trade partnership that would support the ESA region's work to build diverse and sustainable economies.

As a Least Developed Country, Zambia would still access the European market on a duty free access arrangement under the EU Everything But Arms trade arrangement and does not need to submit a market access offer to sign the agreement and benefit from its development cooperation and fisheries provisions while negotiations towards the more comprehensive deal continue

See: http://ec.europa.eu/trade/issues/bilateral/regions/acp/pr290809_en.htm

Link to: http://www.postzambia.com/content/view/12986/50/

East Africa: Six Countries to Ink EPA Deal

Speaking during a media briefing in Lusaka yesterday, Common Market for Eastern and Central Africa (Comesa) chief of technical advisor on EPAs for ESA Moses Tekere said Commerce, Trade and Industry Minister Felix Mutati would sign on behalf of Zambia.

Trade commissioner Baroness Catherine Ashton would sign for the EU. Dr Tekere said the agreement was expected to create a long-term economic relationship between the EU and African Caribbean and Pacific (ACP) countries.

"Zambia is among six ESA countries to sign this EPA agreement with EU.The agreement aims to enhance trade, investment and development aid with the EU," Dr Tekere said.

In the framework of the interim EPA, the EPA grants full access to the European market with temporary exceptions for rice and sugar while the ESA countries would liberate partially and in phases over 15 years.

Dr Tekere said the EPA for the ESA region includes the provisions for the development cooperation and fisheries. He said since independence, several Comesa countries depended on the EU to market their products although the trade relationship was not so effective in the past years.

He said it was for this reason that in 2007, Comesa member States started negotiations with the EU to facilitate smooth trade partnership.

"The 2007 negotiations between ESA and the EU is the one to be signed in Mauritius by these six ESA countries with the EU to enhance the trade relationship," Dr Tekere said.

He said Zambia would benefit a lot from the agreement as it would have its trade markets open to the EU member States through the duty free trade policy.

Dr Tekere said Zambia, being a booming producer of sugar would have an opportunity to export its product to the EU thereby increasing its trade capacity

Link to http://www.times.co.zm/news/viewnews.cgi?category=4&id=1251178464

They Want to Silence Us: The Impact of Governance on Trade and Rural Development in Cameroon

Poor governance practices within national institutions include embezzlement, corruption, and a lack of adequate political vision and framework for trade development. Regarding international fora, governance problems are linked to a lack of transparency between parties and to the failure to respect commitments and regulations.

It is noteworthy to mention that there are numerous causes to the lack of governance preventing trade development in ACP countries. The lack of democracy, freedom, and respect for established rules constitute a major barrier to taking full advantage of trade liberalisation. In such a context, independent stakeholders who are not party to trade negotiations can play a key role in ensuring better citizen monitoring.

Political will to fight behaviours contrary to good governance principles cannot be imposed, and the lack of a development agenda based on a citizen vision and of clearly identified and respected priorities are the source of a highly detrimental lack of transparency.

Based on these seemingly insignificant events occurring in some ACP countries, this article exemplifies the impacts of poor governance on trade development.

By: Jacob Kotcho, Secretary General of the Citizens Association for the Defence of Collective Interests (ACDIC)

Link to: http://ictsd.net/i/news/tni/54817/

Sacu takes united stand on EPAs

The EPA has been singled out as a priority and the Sacu Council has requested the Sacu Commission, under chairmanship of Finance Permanent Secretary Calle Schlettwein, to come up with a strategy and timelines regarding the controversial trade pact.

Finance Minister Saara Kuugongelwa-Amadhila, currently the chairman of the Sacu Council, yesterday said the customs union decided to deal with the EPA issue "following the principle of unified engagement amongst Sacu members states in trade negotiations with third parties, including in the SADC-EC interim EPA and EPA negotiations, while recognising different levels of development and capacity of member states." In layman’s terms, this means that Sacu as a group sees the outstanding issues as issues of concern, realising that signing the final EPA without resolving it will be detrimental to development, the Minister said a press conference. Sacu members Botswana, Lesotho and Swaziland have already signed the interim EPA, but South Africa and Namibia are still refusing.

Namibia has repeatedly stressed its commitment to conclude the trade agreement, but is demanding that the EU first puts negotiated concessions on food security, infant industry protecting and free flow of goods in writing. Important issues like the Most Favoured Nation clause (MFN) and the Definition of Parties (DoP), which will directly impact on South-South trade and regional integration, also remain huge stumbling blocks. An EPA with the EU will ensure that Namibia enjoys quota- and tariff-free access to EU markets.

Kuugongelwa-Amadhila said Sacu is pursuing the matter with an "open mind", as the EU has not indicate that they aren’t willing to negotiate on the outstanding issues. However, she didn’t want to speculate on a date that Namibia would be willing to sign the interim EPA. "(The Sacu) Council agreed to redouble their collective efforts to resolve the outstanding issues in the interim EPA and EPA negotiations," she said, referring to the Special Sacu Council of Ministers Meeting in Swaziland two weeks ago.

Kuugongelwa-Amadhila said the Sacu Council emphasised a need for a common trade strategy and trade negotiation agenda and agreement on the content of negotiations the customs union is prepared to enter into, taking into account the capacity of member states. They also stressed the need to finalise a common negotiating mechanism. "Council recognised the changing trading landscape and the importance of developing a common strategy on new generation issues, such as services, investment and intellectual property rights in trade agreements," she said.

As whether the status quo will result in tighter border controls and higher tariffs by Namibia and South Africa to stop cheaper EU imports from flooding their markets via Botswana, Swaziland and Lesotho, the Minister said Sacu is taking the "optimistic approach" and will therefore stick to the common external tariff. Any other steps will be "defeatist" and a "fall-back", she said.

by JO-MARÉ DUDDY -The Namibian

Link to: http://www.thezimbabwean.co.uk/2009100225105/business-news/sacu-takes-united-stand-on-epas.html

Regional Trade Integration Is About Give and Take

It's "do or die" for the world's oldest customs union. Disagreement over the development consequences of the EU's proposed economic partnership agreements (EPAs) with African states has threatened to split the Southern African Customs Union (SACU) a year before its centenary in 2010.

Botswana, Lesotho and Swaziland unilaterally signed a controversial interim EPA with the EU. The other SACU members, Namibia and South Africa, want the most favoured nation (MFN) clause out of the agreement. The MFN automatically extends SACU's trade allowances to third parties to the EU.

For Tswelopele Moremi, who is at the helm of the SACU Secretariat in Windhoek, it's time for the customs union to put its money where its mouth is. If the five countries can overcome their differences, it will propel the union forwards as a tool of regional integration.

IPS: How much pressure has the signing of the interim EPA put on SACU's Common External Tariff (CET) and the future of the union?

Tswelopele Moremi (TM): SACU is still in business, but it's not business as usual. Article 31 of the 2002 Agreement allows countries to enter into preferential trade agreements unilaterally as long as they have the blessing of the other members. This go-ahead was given at a high level ministerial meeting in Gaborone in May. I do not think the CET is in jeopardy. Different EU trade regimes have co-existed within SACU before, such as South Africa's Trade and Development Co-operation Agreement (TDCA) (with the EU) and the Cotonou agreement (between the EU and the rest of SACU). The signing of the interim agreement does not necessarily mean a split in the union. It does show that countries interpret global developments differently and that the concept of further integration needs to be defined. The bigger picture is that member states should speedily work towards concluding the EPAs with the EU. The EPA is not only necessary from a World Trade Organisation (WTO) perspective but will also align the TDCA and the interim EPA, strengthening regional integration.

IPS: Isn't it unlikely that South Africa will sign any EPA that includes the most favoured nation (MFN) clause?

TM: The MFN and other issues that were identified in Swakopmund in March will need to be resolved before a final EPA can be concluded. A new round of negotiations starts in September 2009. There should be more clarity on where everyone stands by the end of the year but there is goodwill among the member states.

IPS: What about reports that the system of enhanced payments – that transfers the bulk of the revenue pool to Bostwana, Lesotho, Namibia and Swaziland -- has lead to tensions in SACU?

TM: South Africa is the largest contributor to the pool and takes out little. The smaller countries, on the other hand, have ceded much autonomy to the Union and are compensated for that fact. Not surprisingly issues around the revenue will come up from time to time, but the member states have not formally indicated a wish to change the sharing formula. Of course the 2002 Agreement, implemented in 2004, has radically changed SACU. The countries are engaging each other on equal footing and on a deeper level. And this goes to the heart of what integration is about. It's more than just revenue sharing. It's about putting up common policies and institutions, about facilitating trade between the members and the outside world. It's also about recognising different levels of development. Sometimes a country is ready to move on, while others are not. It is a process of give and take.

IPS: This July it was five years ago that the Agreement entered into force. What has been accomplished since 2004?

TM: We have concluded trade agreements with the European Free Trade Area (EFTA) and Mercosur and signed a Trade, Investment and Development Cooperation Agreement (TIDCA) with the U.S., which we see as a stepping stone to a future free trade agreement. Currently we are negotiating a preferential trade agreement with India, which we think will have great benefits for the region. The establishment of the tariff board and the development of common policies may not have progressed as much but these things take time. In June we advertised a tender to develop a common industrial policy. It's now time to implement the 2002 Agreement as soon as possible.

IPS: SACU revenue is reportedly declining, by how much and what is the impact on national budgets?

TM: Only after the audit of the revenue pool in October we will know the exact figures and their impact. However, it is clear that SACU revenues are lower than estimated because of the global crisis. Revenue has always fluctuated, but the ups and downs are more visible since 2002. The past couple of years we have seen extremely big growth of the pool. At one point it would have to come down. We have to realise that in this era of reciprocity (where countries grant each other equal trading allowances) initiated by the (WTO) Doha Round, the trend is towards liberalisation of markets and taking down of tariff barriers. This will also impact negatively on the revenue stream, although income from excise might go up. If SACU is enlarged or morphs into a larger SADC customs union, revenue has to be shared with more players. This is why there is an additional impetus in accessing larger markets as a customs union.

IPS: What role can SACU play in the SADC customs union that is set for 2010?

TM: The increased interest in SACU as a tool for regional integration shows that we are really more beautiful than we give ourselves credit for. After all, we bring a 100 years of experience to the table. Establishing a customs union is more than simply declaring it. Institutions need to be built, policies developed. It's a process that takes years. In April 2009 we passed a WTO review of the 2002 Agreement with flying colours, which shows how far we have come. But countries will have to think carefully about the implications of deeper integration. Once a country has joined a customs union, whether it is SADC (Southern African Development Community), the Common Market for East and Southern Africa (COMESA), or SACU, there is no way back, as countries cannot belong to more than one customs union. There is a recognition that for SACU to play a role in this process it needs to be further strengthened, also politically. Next year will be a critical for that. (END/2009)

By Servaas van den Bosch/IPS news

Link to: http://www.ipsnews.net/news.asp?idnews=48200

EU trade agreements undermine regional integration, says SA official

Speaking at the Southern African Forum on Trade, Department of Trade and Industry (DTI) international trade and economic development deputy director-general Xavier Carim said that South Africa was committed to addressing these issues with the EU and other members in the SADC and the Southern African Customs Union, however, it was clear that there was a need to develop a common approach to effectively address this.

"We also need to see a willingness from the EU to prioritise its professed concern to promote regional integration, not just in broad declaratory statements, but in detailed outcomes of the negotiating processes," he added.

The SADC-EPA group, comprising Botswana, Lesotho, Namibia, Swaziland, Mozambique, Angola and South Africa, split in June over whether or not to sign the interim-EPA offered by the EU. Botswana, Lesotho, Swaziland and Mozambique moved ahead with the signing, despite objections from other members, including South Africa. One of the underlying principles of the EPA is that it should complement and support regional integration initiatives.

SADC members had now established five separate negotiating configurations, in relation to the EU. "Each of these configurations has different tariff dismantling obligations, the products that are covered are different, the timing for the tariff reductions is different, the products that are excluded are different, and all of this is going to certainly complicate and possibly foreclose efforts to foster deeper regional integration in SADC," Carim explained.

He added that it would certainly mean strengthening customs controls and rules of origins controls within the region as a result.

He added that the main motivating factor of the EPA negotiations was to ensure World Trade Organisation (WTO) compatibility, however, the provisions contained in the agreement were beyond WTO compatibility.

SACU COHERENCE UNDERMINED

Carim said that the EPA has also threatened the functioning of 99-year old Sacu.

"We already see that the commitments on the ‘new generation’ issues are in place and that is also going to complicate work in Sacu. But also, unless we are able to address the differences in the trade regimes under the South African free-trade agreement with the EU, compared to the EPA, with respect to the tariff regime and the rules of origin, we are going to see Sacu itself, the coherence of Sacu being undermined."

In fact, Carim added that going forward, the more serious divisions were emerging with respect to the divisions that could emerge in new generation issues - those of trade in services, in procurement, in competition, in investment. Not sure what you are saying?

"Simply from the fact that before the region has been able to develop regional approaches and develop regional rules and markets in these areas, commitments will be undertaken vis-a-vis a third party, and that is going to make it more difficult for us to build regional integration in these areas," he added.

SACU NEEDS COMMON POLICY TO REACH POTENTIAL

Carim emphasised that, from the South African government perspective, Sacu had "enormous potential to move beyond an arrangement based solely on a common external tariff and held together by a revenue sharing arrangement".

"Sacu’s main value is not as a captive market for South African exports, as it was under the Apartheid regime. But in the current global context, Sacu’s value will lie in its ability to be transformed into a vehicle for advancing and deepening integration at a sub-regional level; to act as an anchor in the SADC regional project; and also as a platform for harmonising engagement in wider global trade relations," said Carim.

He added that owing to the way in which Sacu was already established, it could allow the potential to advance to a common market, and eventually, towards a monetary union.

In order for this to happen, member states would need to spend much more time building common policy in the area of trade and industrial policies.

"We need a work progamme to overcome the current policy deadlock that we currently face, and the zero-sum approach, by building production value chains across all member state in agriculture and industry," stated Carim.

He said that the region would also need to intensify the programme of work around regional infrastructure. Work was under way but needed to be intensified, particularly based around the spatial development initiative that was said to have registered some successes already.

"The common policy vision is a pre-requisite for strengthening Sacu institutions, including the proposed Sacu Tariff board, the Sacu tribunal, as well as an effective and a well-resourced secretariat. Progressive harmonisation of various institutional arrangements will also need to be complimented by harmonisation of policies in the areas of competition and standards over time," emphasised Carim.

It was felt that Sacu could also act as an anchor for deeper integration in the SADC.

"For Sacu to realise its potential we also need some common understanding on how to position ourselves in a rapidly changing global economy. Shifting patterns of global trade, the rise of new economies require that we look beyond immediate and short term trade relations, to developing mutually beneficial trade relations with the new sources of global economic growth in the global economy," noted Carim.

Common approaches to trade negotiation was viewed as vital, and Sacu members have agreed to hold strategic discussion at the next council meeting to take this issue forward.

"If we are not able to move along these lines, Sacu runs the risk of being stuck in a policy gridlock, and remaining what it has always been - a customs union structured around a revenue sharing arrangement that will be steadily rendered ineffectual by global developments beyond its control," argued Carim.

He said that Sacu was "at something of a cross roads", and either needed to move forward, in a more co-ordinated and harmonised way, or, find itself increasingly ineffectual.

By Christy van der Merwe

Link to: http://www.engineeringnews.co.za/article/eu-trade-agreements-undermine-regional-integration-says-sa-official-2009-08-03

AGENDA - October