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PRELIMINARY REPORT ON THE STATE OF PLAY OF THE ACP-EU TRADE NEGOTIATIONS

 1.0      Introduction

The European Union is still negotiating a free trade agreement with the African, Caribbean and Pacific (ACP) Regions termed Economic Partnership Agreement (EPA).  The negotiations were launched in 2002 in Brussels and were due to have been completed in December 2007. However, by the end of December 2007 a lot of gaps were yet to be bridged and some seemed unbridgeable. This led to some countries and regions signing an Interim EPA or an 'EPA lite’ and to continue with the negotiations after. The CARIFOURM is the only region that has concluded a full EPA. The whole negotiations have been an arena of contention between the European Commission (EC) and the ACP groupings.

The trade deal is perceived to have the potential to place a lot of burdens on the ACP regions by taking a look at the various clauses in the interim agreements and the assessments at the countries levels. A lot of contentious issues still persist till date and in some areas, there have been deadlocks in the negotiations.  The trade deal has also received a lot of opposition from Civil Society Organizations and think thanks. Campaigns against the deal seem to have toned down for some time now and many analysts and campaigners are in the dark as to what is happening. This report attempts to give updates of what is happening in all the regional blocs specifically and the Africa continent at large. The updates outline the state of the contentious issues in the agreement. The report also dwelt much on media reports and websites information. This could be prone to misrepresentation of facts.

2.0      State of Play within the ACP Region

The most recent meeting on the EPA negotiations at the highest level was the 93rd Session of the ACP Council of Ministers meeting held in Brussels from the 26thto 29th May 2011. The ministers noted that progress on the EPA negotiations have been slow and reiterated their call that outstanding issues including the most favored nation clause, standstill clause, substantially all trade, export taxes, development cooperation, non-execution clause and definition of all parties, among others, must be resolved.  The ministers also noted that among other things that, a differentiated approach on the EPA has the potential to undermine the integration process of the region. This is was contained in Decision No. 1/XCIII/11 of the 93rd Session of the Council of Ministers held in Brussels, Belgium from 26 to 29th May 2011.

Also, in November 2010 Africa Trade Ministers held their most recent meeting in Kigali, Rwanda and adopted a declaration on the EPA. The declaration, among other things, called on the EU to rethink the basic premises of the EPAs. This could be regarded as the continent wide official position on the EPAs. They also adopted a position paper by the African Union Commission and the Region Economic Communities (RECs) on the EPA. The paper captures all the contentious issues as well as implications of such an agreement on the Continent and makes firm recommendations as the way forward for engagement between the EU and Africa.

Broadly, some of the contentious areas according to the position paper on the EPA are:

I.            Development Dimension of the EPA

II.            Definition of ‘substantially all trade’ coverage and transitional period

III.            Most Favored Nation (MFN) Clause

IV.            Non Execution Clause

V.            Treatment of Community Levy

VI.            Export Taxes

VII.            Quantitative Restrictions

VIII.            Standstill Clause (Modification of Tariffs)

IX.            Special Agricultural Safeguards

X.            Rendezvous Clause

XI.            Rules of Origin

Also, the South Centre, through its analytical note (SC/TDP/AN/EPA/26 June 2010) outlined 21 contentious issues pertaining to the goods negotiations in the EPA with the above listed issues inclusive. For instance there is no review clause in most of the Interim agreements.

These issues are a common thread running through all the interim EPAs and even those of the renegotiated ones. (For more information refer to the Position Paper on the EPA by the AU/RECS)

2.1 Options Recommended by the AU/RECs in the Position Paper

The AU is asking that all the EPA contentious issues mentioned above need to be adequately addressed by the EU for the trade regime to serve as an instrument for the achievement of the objectives set for it in the Cotonou Partnership Agreement. This will require the EU to grant the flexibilities requested by African countries. Failure on the part of the EU to grant the flexibilities will pose serious risk for the development of Africa.  Below are the various options recommended for the EPA process.

 A. Continue with the EPA Negotiations on Goods and Development Linked to Benchmarks and based on AU Position

EPA negotiation with the EU should continue. However, liberalization commitments should be pegged to clear development thresholds or benchmarks and must not be more onerous than the low levels of liberalization by other countries (e.g. Mexico and Syria) in EU FTAs. Only when these benchmarks have been attained should countries liberalize a certain percentage of their trade with the EU. The EPA negotiations should also take into account the common positions on the various contentious issues articulated in the AU template. For example, various clauses in the EPA which the EU has inserted should be eliminated: standstill clause; export taxes; MFN clause, non-execution clause and abolition of community levies as these are clearly WTO-plus and would put Africa’s development objectives in serious jeopardy. Also other clauses must be brought into line with the WTO, such as the article on quantitative restrictions and the EU’s commitment at the WTO to eliminate export subsidies by 2013 and to substantially reduce domestic supports in agriculture. Other clauses must be vastly improved upon: bilateral safeguards; infant industry clause; modification of tariffs; definition of the parties, to name only a few.

  B. Sequencing of EPAs vis-à-vis Regional Integration

Intensify regional integration and South-South cooperation such as the tripartite Free Trade Area (FTA) process already underway by three Regional Economic Communities (COMESA, SADC, and EAC), and the consolidation of intra African trade and integration. The Tripartite FTA will eventually become a common market of 26 countries comprising more than half of the population of sub-Saharan Africa. Trade policies and customs legislation are still in the process of being harmonized in many African sub-regions. At the same time, there are also nascent efforts at exploring the possibility of extending this future tripartite common market to other regions.

 C.EPA negotiations should be concluded after GATT Article XXIV Negotiations have been completed

African Ministers at the Doha Ministerial Conference had envisaged that the negotiations on ‘development aspects’ of GATT Article XXIV should be completed before EPAs are signed. This is to ensure that there is coherence between a development friendly GATT Article XXIV and the EPAs. This continues to be the logical sequence, so that the EPAs are able to embody the developmental aspects of a revised GATT XXIV. Various African Heads of States Declarations and AU Summits have reinforced this important sequencing in the negotiations so that EPAs do in fact deliver on development and African countries are not forced to take on liberalization commitments which are beyond their capacity, leading to deindustrialization

 D. Extend EU’s Everything But Arms (EBA) Regime to all of Africa

Under this option, all African countries would have Duty Free Quota Free access to the EU market.  The whole of Africa can be seen collectively as a disadvantaged region.  This is similar to the African Growth and Opportunity Act (AGOA), where a waiver has been granted at the WTO, allowing the US to provide preferential market access to Africa. The distinction between LDCs and non-LDCs in Africa is largely artificial. As the ACP Guidelines for the Negotiations of EPAs notes, non-LDCs in Africa ‘are on the fringes of the LDCs when viewed in terms of the proportion of the population living under the poverty line and the vulnerability of some of the economies’.

In addition, all African non-LDCs are (or are expected to join) in customs unions with LDCs. If the non-LDCs liberalize, the LDCs in the customs union will have to liberalize at the same rate and to the same extent, or the customs union will be broken. It is therefore only logical; for the sake of preserving African regional integration, that African countries in customs unions (or in the process of creating customs unions) with LDCs should have the same EBA trade regime vis-à-vis the EU. (There is some recognition of this issue in the WTO: in the non-agricultural market access negotiations, South Africa is to receive more flexible treatment given that it is in SACU with an LDC).

This is a very good option for Africa since it preserves Africa’s regional integration, as well as provides African countries (including non-LDCs) with continued market access to the EU, as was promised to Africa in the Cotonou Agreement. A major challenge for LDCs under the EBA, however, has been the EU’s EBA rules of origin. These will have to be improved if real market access is to materialize.

E. Improve EU’s Generalized System of Preferences (GSP) Regulation

African non-LDCs that are not signatories to the EPAs can trade under the EU’s GSP scheme. In addition, African countries which satisfy further criteria (ratifying and implementing certain treaties) can obtain improved market access under the GSP plus.  The EU’s GSP and GSP plus regulation can be improved and the criteria refined such that African non-LDCs can more easily use the GSP plus regulation, providing duty-free market access on additional tariff lines to the EU. All African non-LDC countries already meet the level of vulnerability required for potentially accessing the GSP+. Like the EBA, the GSP/ GSP plus scheme has burdensome rules of origin which undermine actual market access. These have to be improved upon.

F. Discontinue the EPAs

Failing the successful  conclusion of a development-oriented EPA, or the expansion of the EBA coverage and GSP regulation, African countries may have to discontinue the EPA negotiations and focus on deepening Africa’s regional integration and the development of South-South cooperation (as outlined in the second option), in particular with countries and regions that are more amenable to Africa’s development aspirations.

3.0 What is the state of Play in the Various Blocs

The table below summarizes the different IEPAs that have been signed and approved by the European Parliament (EP), those that have been signed only and those with which signatures are pending.

    Table 1: Status of Interim Agreements

Status

 Agreement

Comment

Signed agreements approved by the EP

 CARIFOURM

 Signed on 15 October 2008 and approved by the EP on 25 March 2009.

Côte d'Ivoire

 Signed on 26 November 2008 and approved by the EP on 25 March 2009.

Signed agreements

 Cameroon

 Signed on 15 January 2009.

SADC

Signed by the EU and by Botswana, Lesotho and Swaziland on 4 June 2009. Mozambique signed the agreement on 15 June 2009.

Namibia has not signed yet.

Pacific

 Signed by the EU and Papua New Guinea on 30 July. Fiji requires more time for completion of their national procedures and is currently dealing with political problems, including at regional level.

ESA

 Signed by the EU and by Madagascar, Mauritius, the Seychelles and Zimbabwe on 29 August 2009. Comoros required some time to further examine the agreement and Zambia has expressed the ambition to consult with other LDCs of the region.

Signature pending

 Ghana

 Ghana and European Community signature arrangements pending.

EAC

 Signature authorised by Council in July; timing to be confirmed pending final discussions with EAC. Failed to sign in June 2010

3.1 Economic Community of West African States (ECOWAS)

This Region is made up all fifteen member states as well as Mauritania. The main exports to the EU are: oil, cocoa, bananas, pineapples, wood, and it are the most important region for trade- 40% of all EU-ACP trade. Ghana initialed the IEPA while La Cote d’Ivoire signed the Interim Agreement with the EU in 2008. In the case of the latter it was signed on 26 November 2008 and approved by the European Parliament (EP) on 25 March 2009.

In Ghana, the Government could be under some intense pressure to consolidate the IEPA. In May 2011 during the celebration of the EU’s week in Ghana, a national forum on the EPA was held, in which the European Delegation called on the Ghanaian Government to consolidate the interim agreement[1].  This was contained in the EU Delegation in Ghana website on the 13th of May 2011

At the ECOWAS level, the Community has expressed deep concerns regarding the persistent divergences between the European Union and West African parties. These concerns were contained in a Final Communiqué reached by the sub-regional economic bloc at the 39th Ordinary Session of the Authority of Heads of State and Government of ECOWAS held in Abuja, Nigeria from March 23-24, 2011.

The Heads of State and Government affirmed their common position on the EPAs as follows:

*        preserve the independent resources of regional organizations by excluding ECOWAS Community Levy and the UEMOA Community Solidarity Levy from the scope of the tariff liberalization;

*         Ensure a sustainable and gradual liberalization that safeguards the region’s tax revenue

*        Ensure development capacity and avoid a reversal of the recent regional integration achievements

*         West Africa is ready to offer to the EU a maximum of 70 percent market opening over a period of 20 – 25 years;

*         Ensure additional financial resources from the EU for the financing of the EPA Development Programme (EPADP).  The additional and availability of resources should be taken into account in the text of the agreement and

*        Maintain the policy space required to promote trade with other trading partners such as South-South countries/blocs within the framework of most favored nation clause in the EPA.

The ECOWAS Body during the meeting also indicated its resolve to deal with the divergences in order to ensure a simple and development friendly rules of origin which takes into consideration the different levels of development of the two parties.

Furthermore, the session agreed to defer extension of rules of origin preferences to cover Ceuta and Melilla till such time that the potential impact of such a move on West Africa could be ascertained, and avoid mechanisms that would affect regional trading relations based on unilateral political sanctions within the framework of the non-execution clause.

According to the communiqué, the Authority requested the negotiators from both regions to continue consultations in order to reach agreement on the outstanding divergences.

Notwithstanding, the clarion call by the ECOWAS Body the EU is working behind the scenes to complete the consolidations of the IEPA especially in Ghana since Ivory Coast has already signed its interim agreement with the EU. The EU made the call during a national forum on the EPA in early May 2011.   

After the Heads of State meeting in Abuja, European and West African negotiators met in Dakar (Senegal) at the technical level from 23 to 25 May[2] 2011, to discuss the way ahead in Economic Partnership Agreement (EPA) talks. According to the report from the Weekly Digest on EPA, newspaper on EU’s trade, on 17th June 2011, progress was made, though not clear, on the text of the agreement: rules of origin, market access, the EPA Development Programme (PAPED) and other outstanding issues. The report however indicated that additional work is needed to hammer out differences on issues such as the Most Favored Nation (MFN) clause, which are now nevertheless very limited in number. The EU is confident that a compromise can be found with a decision at political level. The next meeting EU-WA contacts include a technical and Senior Officials' round in Brussels on 26-29 July.

3.1.1 Ghana Situation on IEPA

The Ghana specific case is worth noting. The EU Delegation in Ghana has been calling on the Ghanaian Authority to sign and consolidate the IEPA. This came up during the celebration of the EU EPA Week in May 10, 2011. The Minister of Trade and Industry was reported to have called on the private sector in Ghana to be involved in the EPA.

The EU delegation website claims that: “The Minister of Trade and Industries, Hon. Ms. Hannah Tetteh, in an address to kick-start discussions on the EPA at the forum stressed the need for the Ghanaian business community especially the private sector, local and foreign to lend a voice to discussions on the need for the ratification of the IEPA and to tell Ghanaians and civil society the benefits they stand to gain from the agreement as well as how important the EPA is to their industries. “You have more credibility than government and need to tell the people about your experiences with the interim EPA.  You must also lead discussions and get involved and push for the consolidation of the EPA” the website of the EU Delegation claims.  (For more on the claims of the Delegation visit the website in Ghana: http://eeas.europa.eu/delegations/ghana/index_en.htm)

Before the said meeting there was a meeting of a section of CSO organizations to brainstorm on the way forward on the EPA following indicative statements from the Ministry of Trade and Industry.  Present at the meeting were: Third World Network Africa, General Agricultural Workers Union, Ghana Trade and Livelihoods Coalition and Action Aid Ghana among others. This is a sign that CSOs in Ghana are bracing for a fierce battle on the EPA Campaigns once again.

3.2 East African Community (EAC)

 East African Community (EAC) is made up of five members: Burundi, Kenya, Rwanda, Uganda and Tanzania. Main exports to the EU: plants, cut flowers, coffee, vegetables, fish, tobacco while the main imports are machinery, chemicals, vehicles.

East African Community (EAC) EPA negotiators met in Nairobi from 2-4 February[3] 2011 and agreed on a roadmap for the negotiation of a comprehensive EAC-EU EPA in 2011. This roadmap outlines the priorities for negotiation – such as market access, economic and development cooperation, agriculture, trade related issues including trade in services – and sets up a negotiating timetable. Ongoing regional discussions are currently taking place to formulate strategies to move the negotiation process forward. Technical level negotiations with the EU were scheduled to start in March although no exact dates were given.

Reports in The Citizen, Dar es Salaam, on the 31st of May 2011 indicated that the European Union (EU) is still negotiating with the East Africa Community (EAC) on the conclusion of the Economic Partnership Agreement (EPA). The EU ambassador to Tanzania, Mr. Tim Clarke, confirmed this to The Citizen (Tanzanian leading daily English Newspaper) in an exclusive interview in his office recently.

The Ambassador said, according to the report, the two sides were expected to conclude the process by the end of this year 2011. Last year the EAC secretariat conducted the third negotiations in Dar es Salaam between the EAC Partner States and the European Commission (now Delegation of the European Union) on the EPA. The failed signing ceremony was due partly to the intervention of the five permanent missions of the Community in Geneva, Switzerland.

It was also reported  by the same newspaper that the former minister for Industry, Trade and Marketing, Dr. Mary Nagu, told participants attending a one-day Joint EAC-EU-EPA Workshop that the EAC states and the EU initialed a Framework Economic Partnership Agreement (FEPA) on November 27, 2007 in Kampala. The parties undertook to continue negotiations of (FEPA) with a view to concluding a comprehensive EPA.  In the initial led FEPA, the EAC offered to liberalize 82.6 per cent of its trade with the EU. It retained an exclusion list accounting for 17.4 per cent of the trade with EU.

 A total of 65 per cent of EU imports into the EAC already enter the market free of duty. This is because the EAC has already set the Common External Tariff to zero for all imported capital goods. About 15 per cent of EU imports are intermediate goods (inputs to economic activities in the EAC region) and were proposed to be liberalized by 2023.

Financing the EPA process is worth noting. In a report by Allan Odhiambo, The Monitor via allafrica.com, 22 April 2011, indicated that East African heads of state overruled a decision by the regional Parliament to use a donor grant to revive stalled trade talks with Europe. The EAC Council of ministers has been embroiled in a struggle over the use of 3.48 million donor funds to facilitate stalled negotiations on new Economic Partnership Agreements (EPAs) with Europe. The disputed funds stem from a grant by the Swedish International Development Agency (SIDA). Budgetary estimates showed EAC requires about Sh272 million to continue the talks

Sources close to the East African Community Secretariat indicated that there are funding concerns.  However efforts were being made to circumvent the funding concerns and will shortly re-launch the EPA negotiations initially at the regional level and perhaps engage the EC much later.  Accordingly, the secretariat will obtain funding from the EAC Partner States budget with effect from 1st July 2011.  In the meantime the first regional consultations are being proposed in the 3rd week of June 2011.  The consultations are to review the joint negotiations roadmap and attempt to define the EAC's interests given that there has been a lapse in the negotiations timing.   So in this Region, there are signs of the negotiating picking up.

3.3                Southern African Development Community (SADC)

The SADC Region is made of Angola, Botswana, Lesotho, Namibia, Mozambique, Swaziland and South Africa. Main exports to the EU: diamonds, oil, fish, beef, sugar, tobacco with its main imports as machinery, vehicles, chemicals from the European Union.

3.3.1 EPA negotiations on backburner[4]

Reports indicate that the negotiations in the region have stalled. Negotiations for a new economic partnership agreement (EPA) between SADC members and the European Union appear to have been shelved with no fixed date for resumption of the protracted trade negotiations according to the Southern Times[5] on the 18 of April 2011 edition.  According to the report talks between SADC countries and the EU for a new trade deal are on the backburner, with both parties shifting focus to pressing domestic economic and trade issues.  

The SADC and EU negotiating teams last met in November 2010 in Mozambique.   Instead, the Southern Africa bloc seems more concerned with talks on coalescing SADC, the East African Community and the Common Market for Eastern and Southern Africa into what is known as the Trilateral Free Trade Area (T-FTA).  

The T-FTA brings together 26 countries with a combined gross domestic product of US$624 billion and a population of approximately 700 million. The T-FTA is in line with continental ambitions to deepen and widen integration and trade opportunities from Cape to Cairo, Egypt.  On the other hand the EU is grappling with its sovereign debt crisis. The European bloc also has to contend with a market squeeze induced by the emerging economies of Brazil, India, China and South Africa (BRICS).

It is also worth noting that reports indicated that [6]Namibia's Finance Minister, Saara Kuugongelwa-Amadhila, in March 2011, hinted that negotiations for a new trade deal with the EU could be concluded in July. This was also contained in the 18th April edition of the Southern Times. 'The timeframe for concluding the negotiations will largely depend on the extent to which the parties accommodate each other on issues of interest and the challenges that such issues would present on negotiations.  'A new deadline for the negotiations has been set for July 2011,' Kuugongelwa-Amadhila told Parliament. This is a bit contrary to the reports in the Southern Times.

There are also reports that the negotiations have been clouded by a series of disagreements and confrontations since the initial trade regime expired in 2007.  The EU is accused of employing bully tactics. Annascy Mwanyangapo, director of international trade in Namibia's Ministry of Trade and Industry told The Southern Times (still the 18th April edition of the Southern Times) that the absence of an operating timeframe scuttled hopes of a deal being reached any time soon.

Since then Africa and the EU have struggled to find common ground on key issues such as the most favoured nation clause, which Europe insists is non-negotiable.  Other thorny issues have emerged around new generation issues of trade in services, investment, competition and government procurement.  Analysts say the EU's position will leave poor African countries as net exporters of cheap, unprocessed materials. All these issues are yet to be addressed to the satisfaction of both parties. So currently the contentious issues still persist.

Again, writing in South Africa's Sowetan newspaper recently, Professor Mwesiga Baregu[7], blamed the EU for its divisive position on African countries (Southern Times, 18th April 2011 edition).  'The irony is that while Europe is creating greater unity through an expanded EU, Africa - under EU pressure - is disintegrating into regional EPAs linked to the EU with the effect of weakening existing regional economic communities and eventually scuttling the dream of a politically unified Africa. 'Ironically, the socio-economic marginalization of Africa in its share of international production, consumption and trade, as well as its impoverishment, is the same process intensifying the exploitation of Africa's resources,' Baregu opined.

3.3.2 Namibia Specific Situation

In Namibia the Government seems to be getting a lot of support for not signing the EPAs. Recent reports in the media with regards to Namibia's so-called 'reluctance' to sign the interim Economic Partnership Agreement (EPA) with the European Union (EU) have elevated the issue to a level that once again necessitates public debate on the merits of such a step. This was reported in Pambazuka News, Pan African Voices for Freedom and Justice (no date was indicated).

These reports were sparked by spate of remarks by the minister of trade and industry, Dr. Hage Geingob, on why Namibia has not yet signed the interim EPA. This has opened a debate with local civil society organizations (CSOs), the European Commission (EC), the local meat industry and the Namibia Chamber of Commerce and Industry (NCCI) joining the bandwagon in reaction to Geingob's comments.

Several local CSOs came out in support of the government's stance not to sign the interim EPA at this stage and voiced their concerns about the latest developments that brought about a discord between the Southern African EPA participants. This has specific reference to the necessity of preserving the integrity of the Southern African Customs Union (SACU).

The EC, through the spokesperson for the European trade commissioner, came out strongly to counter the recent remarks of Geingob with regards to the signing of the interim EPA. The latest from his side concerns the ambiguity of Namibia towards the interim EPA and a possible legal challenge to end the country's current duty free quota free (DFQF) market access to EU markets.

The chief executive officer (CEO) of Meatco, Kobus du Plessis, reacted to Geingob's comments by attaching an income and loss statement for the local meat exporting industry should Namibia decide not to sign the interim EPA. However, he acknowledged that the meat sector is not the only sector in the Namibian economy and that regional integration and SACU receipts are important to the country.

Lately the Namibia Chamber of Commerce and Industry (NCCI), through its CEO Tarah Shaanika, also voiced its support for the government not to sign the interim EPA at this stage. The NCCI recognizes the threat of the interim EPA to regional integration in Southern Africa and warned that the government should continue seeking strong and unequivocal written assurances that has been agreed in negotiations will be honoured. All these are positive signs for Namibia looking at the stand of the Government with regards to the EPAs.

3.3.3. Swaziland, Lesotho signed EPA under duress – Guduza[8]

All is not that smooth with the interim EPAs in Swaziland and Lesotho. It has been reported on the 5th of April 2011, in the Swazi Observer, that the Speaker in the House of Assembly of Swaziland, Prince Guduza, indicated that Swaziland and Lesotho signed the interim Economic Partnership Agreement (EPA) with the European Union (EU) under duress. He said both countries signed the agreement because they had certain export quotas to the EU. He noted that the EPA sowed a seed of confusion in the Southern Africa Development Community (SADC).

“SADC signed trade protocols for its members, which are binding. The parliamentary conference on trade and EPA which was held in Botswana in the previous weeks came up with numerous recommendations regarding trade in the region. One being that governments in the SADC region must involve civil society and parliamentarians in EPA negotiations,” he said.

The Speaker also indicated that the advent of EPAs did not allow membership to more than one trade group. Accordingly they realized that within SADC there were members of the Southern Africa Customs Union (SACU) as well as the Common Market for Eastern and Southern Africa (COMESA).  And this has disintegrated the region further. The Speaker also noted that Swaziland and Lesotho were subject to fail in the implementation of the EPAs as there was no way they would transport goods since South Africa did not allow such as it was subjected to SACU rules. This of course has created more uncertainties in the EPA process in the region.

The Speaker said the signing of the EPA was no longer in the SADC protocol. He said the EPA would be unworkable as it was anti the economic regional agenda signed through the SADC trade protocol. Meanwhile, University of Swaziland Lecturer Dr. Kabura last year said countries that wanted to sign the EPAs must deliberately delay them. He said the EPA must be rejected as it had few benefits for African countries.

On that note, Minister of Commerce, Industry and Trade Jabulile Mashwama said signing of the preliminary agreements of the EPA was delayed by problems in both the EU and SADC region. However, she said they would ultimately be signed.

3.3.4 Technical experts needed for EPA negotiations according to the Speaker            

The Speaker again, in Swazi Observer on 5th of April 2011, indicated that in signing the Economic Partnership Agreement (EPA) with the European Union (EU), Swaziland needs people conversant with such issues so as to make the ideal decisions. Prince Guduza also said during negotiations, the EU came with a commission well versed in such issues and had plenty of experience. He said there was no technical capacity in the region despite that it would be imperative in EPA discussions.

The Speaker recommended that there must be a Southern Africa Development Community (SADC) Secretariat to engage the EU Commission on behalf of SADC countries when negotiating on the EPAs. There was also the need, according to the Speaker, for the engagement of the EU so that they would look at negotiations in terms of the Southern Africa Customs Union (SACU) and the Common Market for Eastern and Southern Africa (COMESA).

Again, there must be SADC, SACU and COMESA representatives in the negotiations with the EU as opposed to the approach to the SADC bloc as it had failed, according to the Speaker. “Individual countries must stop negotiating alone. All SADC countries must speak one language when it comes to EPAs. “The agreement is now being negotiated with individual member states as opposed to the original position of negotiating blocs. This is further compounded by the fact that the SADC Secretariat does not have the mandate to negotiate on behalf of member states,” he said.

During the second regional parliamentary conference on trade and EPAs held in Botswana over the past few weeks, it was recommended that there should be promotion of research-based and region-wide consensus on a SADC position versus the ongoing EPA and other multilateral trade negotiations.  The conference also recommended that governments in the different countries be urged to make the SADC integration more people centred. All these reports above show that the region has a lot of hurdles to cross with regards to the EPA Agreement. The hurdles could be of immense help to the region in that it would slow down the pace of the EU.

3.4                Eastern and Southern Africa (ESA)

This region is made up of Comoros, Djibouti, Eritrea, Ethiopia, Madagascar, Malawi, Mauritius, Seychelles, Sudan, Zambia and Zimbabwe. Its main exports to the EU: copper, raw cane sugar, textiles, tobacco, processed tuna, coffee while its imports from the EU are: machinery, vehicles, and chemicals.

There have been no further negotiations with the EU since the technical level meetings held in Harare in December 2010. No date has yet been set for the next round of EU- ESA technical meetings was scheduled to be held in March. National and regional consultations on a number of EPA issues are currently being undertaken in East and Southern Africa (ESA). This was contained in the updates done by Melissa Julian, Melissa Dalleau and Quentin de Roquefeuil and reported in the Trade Negotiations Insight, Vol.  10 April 2011.

3.5 Economic Community of Central African States (CEMAC)   

All six members of the Economic Community of Central African States (CEMAC), plus the Democratic Republic of Congo and São Tomé and Príncipe are involved in the EPA process. Also, the main exports: oil, wood products, diamonds, cocoa, bananas with imports into the region from EU being  machinery, vehicles, chemicals, iron and steel, pharmaceuticals.

Negotiations have resumed. Technical experts from both sides resumed EPA negotiations in three working group meetings – market access, rules of origin and customs issues; services and investment; and EPA accompanying measures - held from 31 January to 4 February 2011 in Brussels, ending a two-year pause in negotiations. The European side was headed by a new team of negotiators from the European Commission’s (EC) Directorate General for Trade.

The Working Group on market access developed a list of goods representative of “sensitive economic sectors” elaborated with a set of development criteria in mind. The EU reportedly agreed to drop the inclusion of the controversial Most-Favored Nation (MFN) clause and confirmed that it would not seek to establish a standstill clause. On services, the group was reported to have made progress on the EPA text. As to what constitute progress is not clear. The working group on accompanying measures focused on the net fiscal impact of the EPA as well as on a methodology and a calendar for the elaboration of the joint orientations document. The two sides also agreed on an overall EPA negotiations roadmap for the year.

3.6 Pacific Islands Forum (PIF)

Pacific Islands Forum is made up of 14 island states (biggest are Papua New Guinea (PNG) and Fiji). The main exports to the EU: palm oil, sugar with its imports from the EU being machinery, transport equipment.

3.6.1 Pacific ACP States aim to conclude EPA by end of 2011

In 2011 a three day meeting of trade officials was held in Apia from 3-4 February 2011 to review the progress made in the negotiations thus far and plan future movement in EPA.  Participants considered a number of issues, relating, inter alia, to the EPA market access offers, key contentious and outstanding issues in the negotiations, rules of origins in the fisheries sector, as well as development cooperation. Upon reviewing the negotiations to date, Ministers agreed to continue negotiating as a single region for a comprehensive EPA with the EU.

Ministers adopted a Pacific ACP EPA 2011 Strategy that outlines a number of options and strategies for moving the negotiations forward and includes a commitment to conclude negotiations by the end of the year. Recognizing the rigorous schedule for the EPA negotiations, PACP states agreed to prioritize EPA-related activities and meetings over other regional trade negotiations. The PACPTMM took place in a context of significant controversy and allegations by Papua New Guinea (PNG) about the capacity of the Pacific Island Forum Secretariat (PIFS) to efficiently manage the negotiation process as well as regional political developments. Concerned about the slow progress in the negotiations and potential conflict of interest by those in charge of managing the negotiations within the PIFS, some PACPS have expressed an increasing lack of confidence in the ability of PIFS to look after the interest of the PACP states, which are also part of the 16 member Forum grouping.

On May 2009, the Forum leaders decided to exclude Fiji from meetings organized by the Forum, including PACP EPA meetings at Ministerial level. This was the key reason why PIFS did not convene any PACP ministerial meetings in 2010. It resulted in the formal proposal by Pacific Negotiation Group, PNG to relocate the management of the EPA negotiations process and related Economic Development Fund (EDF) resources to the Office of the Chief Trade Adviser (OCTA).

 3.7                Caribbean Forum of Caribbean States (CARIFOURM)

The CARIFOURM signed the EPA agreement since January 2008 covering all Caribbean states. (Haiti joined in December 2009). The main exports to the EU are fuel; chemicals, agricultural products (e.g. mangoes, bananas, rice, rum, sugar) and main imports from the EU are machinery

CARIFORUM[9] states have started tariff liberalization since January 2011 under the terms of the Caribbean Forum of African, Caribbean and Pacific States (CARIFORUM)-EU EPA. In January, Guyana became the first Caribbean country to take the necessary legislative steps to implement the EPA tariff reductions when the Guyanese National Assembly passed the Customs Duty (Amendment) Order 2011 amending the Customs Act to include the EPA schedule of tariff rates. St. Kitts & Nevis has also provided for initial EPA tariff reductions. According to the Jamaican Minister of Foreign Affairs and Foreign Trade, Hon. Dr. Kenneth Baugh, a draft has been prepared to amend the relevant sections of the country’s Customs Act and is being reviewed for submission to Parliament.

At their meeting in Grand Anse on 25-26 February, Caribbean Heads of Government noted a loss in momentum in the regional integration agenda and agreed on the need to reassess approaches to determine modalities so as to re-energize the regional integration endeavour. Heads agreed to hold a retreat before their next meeting in July 2011 to discuss the way forward for CARICOM. Heads of Government also reiterated the importance of the CARICOM Single Market and Economy (CSME) as a platform for the organization of production and the development of global competitiveness. The Council for Finance and Planning has been mandated to review the constitutional elements and advise on the feasibility of the timelines for the Single Economy completion.

The first meeting of the European Delegation to the CARIFORUM—EU Parliamentary Committee was held in Brussels on 1st February. The Caribbean-EU Economic Partnership Agreement provides for the creation of a CARIFORUM-EU Parliamentary Committee whose main task is to monitor the application and management of the agreement. It can request from the Joint CARIFORUM-EU Council specific relevant information regarding the implementation of the Agreement and make recommendations to the same Council, as well as to the CARIFORUMEU Trade and Development Committee.

The European Members of Parliament were informed that the European Parliament’s President wrote to all Caribbean parliaments inviting them to designate 15 representatives for the Joint Parliamentary Committee (one per country). The President also proposed to hold the first joint meeting on 15-16 June in Brussels. EU Trade Commissioner Karel De Gucht provided members with a summary of achievements stating the application of EU market access commitments and bottlenecks (including delays on the CARIFORUM side to appoint Joint Trade and Development Committee representatives) in the Caribbean-EU EPA implementation.

At the Trade and Development Committee level, the first scheduled meeting on implementation of the CARIFORUM-EU EPA took place at Christ Church Barbados, 9 June 2011. This was contained in a joint CARICOM-EU press release at Turkeyen, Greater Georgetown, Guyana on the 10th June 2011

‘Representatives of the Caribbean Forum of African, Caribbean and Pacific States (CARIFORUM) and the European Union today concluded marathon one-day deliberations in Barbados, under the auspices of the inaugural meeting of the Trade and development Committee under the CARIFORUM-EU Economic Partnership Agreement (EPA). The Meeting was chaired by H.E. Alexis Rosado of Belize. The state-of-play in EPA implementation took center-stage, in what were characterized as ―cordial and productive exchanges’ the press release indicated.

Again, according to the release both sides agreed that the Meeting represented a ―crucial step in efforts to provide impetus to the implementation of the CARIFORUM-EU EPA, not least because it provided an opportunity for detailed exchanges on and identification of follow up required in respect of a range of matters reflected on the Meeting’s agenda, namely: legal issues; ratification of the Agreement; institutional matters; Trade in Goods; Trade in Services; Trade-related Issues; development cooperation; and monitoring the implementation of the EPA.

The Meeting provided an opportunity for CARIFORUM to impress upon the EU the importance of continued support to the Rum Industry in the Region, and expressed concern regarding preference erosion — as it relates to agreements that the EU has concluded and those that are under negotiation — affecting Rum and other products of interest to CARIFORUM. Issues of national interest to the Region related to the liberalization schedule for Trade in Goods were raised with the EU, in particular relating to motor vehicles and their parts and changes to product rates assigned. The EU has given an undertaking to review these matters based on a formal submission by CARIFORUM.

(For more information see the press release visit: http://www.caricom.org/epaimplemenation unit )

3.7.1           Some comments on EPA negotiations with the CARIFORUM

 Comments by Dr. Warren Smith

What is happening in this region is best captured by the newly appointed president of the Caribbean Development Bank (CDB) in recent times, Dr. Warren Smith[10].  While addressing the CDB board of governors at their annual meeting in Trinidad and Tobago in late May 2011, he noted that the EPA that was signed in 2008 between the European Union (EU) and the Caribbean Forum (CARIFORUM) countries has added to the insecurities engulfing Caribbean economies.

According to him the EPA signalled the end of unreciprocated preferential access by Caribbean exports into the EU market resulting in new insecurities being created as agriculture production, farm incomes and employment declined, small farmers, especially in banana and sugar producing countries displaced and poverty levels rose dramatically more so, in rural communities.

“If you look at countries in the Eastern Caribbean like St., Lucia, Dominica, their banana industries have been adversely affected so that there is, if you will, first round fallout from that (EPA) development,” he said.

 Attorney General of Antigua &Barbuda wants regionalism as a pillar of EPA laws

Attorney General of Antigua and Barbuda, Justin Simon, also called for regional integration to be a key component of laws being designed to implement the Economic Partnership Agreement (EU EPA).  Speaking at the launch of a two-day seminar for legislative drafters on the EPA, Simon urged the legal minds to encourage regional co-operation in accessing the benefits of the EPA.

The CARIFORUM-EC EPA covers, among others things, trade in goods, investment and trade in services, competition policy, innovation and intellectual property, transparency in public procurement, environment and social aspects and personal data protection.

The two-day seminar for legislative drafters on the CARIFORUM-EU Economic Partnership Agreement (EPA) for Legislative Drafters was organized by the Caribbean Community (CARICOM) Secretariat.

 The CARIFORUM-EU EPA places new responsibilities on CARIFORUM states, with respect to undertaking market-opening and rules-related commitments. These commitments relate to trade in goods, trade in services and investment, as well as in trade-related subject areas, such as intellectual property, competition and government procurement. Legislative measures are necessary

in many cases.

3.7.2 A seminar for the Caribbean business community

Over 120 Caribbean businesspeople gathered to explore the potential benefits of the Cariforum-EU Economic Partnership Agreement (EPA) during a two day seminar held on 4 and 5 April 2011, in Port of Spain (Trinidad and Tobago) organized by the EU's Delegation in Trinidad and Tobago (T&T) for 15 CARIFORUM states.

Together they looked at the agreement's contents and explored how to put the EPA to work for their businesses - increasing exports, attracting more outside investment, and thereby driving growth and jobs in the Caribbean according to the reports.

 3.0      A Brief Analysis of the Situation

 Combing through all the regions the contentious issues are yet to be addressed as recommended by the African Union and the various regional economic communities. In the ECOWAS Sub region the Heads of State during their last ordinary session made it clear that EPAs should be pro developed. But the EU is also continuing with its divide and rule tactics in the region. The call by the EU for the Ghanaian Authority to consolidate the IEPA speaks volumes of the character and nature of the intention of the EU behind the EPA negotiations.  Based on the divisive nature of the EU the best approach is for the ECOWAS region to engage the process as a bloc and shun the country level negotiations.

Again, the position paper by the AU/RECs on the trade deal should be the guiding document on the negotiations. The insistence by the EU on the EPAs process though many oppositions and resistance shows that the EU has nowhere to go. This should be the strength for all the ACP negotiators to be firm in demanding the removal of all contentious clauses in the EPA agreement and to reshape the EPA to be truly a development oriented.

4.0 References    

[1] EU Delegation in Ghana website on 13th May 2011

[2] Weekly Digest on EPA, Newspaper on EU Trade on 17th June 2011

[3] EPA UPDATE by Melissa Julian, Melissa Dalleau and Quentin de Roquefeuil and reported in the Trade Negotiations Insights, Vol.  10 April 2011

[4] A report by Felix Njini on 18th April 2011 in Windhoek  in the Southern Times

[5] A newspaper for Southern Africa

[6] 18th April 2011 edition of the Southern Times

[7]Mwesiga Baregu is professor of political science and international relations at the University of Dar-es-Salaam (Tanzania) and also former head of the Peace and Security Research Programme at SAPES

[8] Stories by Nomthandazo Nkambule on April 5, 2011 in the Swazi Observer, a newspaper in Swaziland

[9] Information taken from EPA updates by Melissa Julian, Melissa Dalleau and Quentin de Roquefeuil and reported in the Trade Negotiations Insight, Vol.  10 April 2011


 




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