EU Council requests flexibility to address ACP-EPA concerns
EU member states adopted conclusions on the EPAs during the EU External Relations Council in Brussels on May 27. These conclusions state that the main objective remains to achieve regional EPAs covering a wide scope of issues, which take into account the political choices, development priorities and administrative capacities of the ACP in order to release development potential. The conclusions acknowledge “concerns expressed by ACP partners” and “problematic issues still outstanding.” They underlined “the need for a flexible approach while ensuring adequate progress” and called on the Commission to use all WTO-compatible flexibility and asymmetry. Moreover, “ACP countries and regions who so wish could draw, if appropriate, on provisions agreed by others in their EPA negotiation.” The Council also said that in “moving from interim agreements towards regional EPAs […] ACP requests for adjustments will be taken into account where appropriate, to the benefit of regional integration” and underlined “the need for an early notification at WTO of the interim agreements, after signature.”1
It was agreed that EU development assistance will support regional integration, EPA adjustments and reforms including through i) the ‘EU strategy on Aid for Trade’, approved in 2007, and ii) through regionally-owned funds, where appropriate. Support will not be conditional on signing an EPA. The ACP will no doubt continue to work towards clarifying needs and establishing regional funds and look forward to EU member states communicating specific commitments on AfT. The Council also reaffirmed that an appropriate monitoring system, assessing development and trade impacts, as well as progress in implementation, will be a key aspect of EPA implementation.
Central Africa faces negotiation challenges
Central Africa’s EU market access offer is almost completed, but needs to be consolidated as a regional offer. Several countries did not work on the same basis or criteria (transition periods or schedules) and need more time to harmonise these. Some observers say the delay is also mainly due to capacity constraints and divergent views within the region on national exclusion lists for sensitive products and dismantling tariff schedules. The missed deadline comes as little surprise given that the region had set itself a hugely ambitious timetable. Central African countries oppose the European Commission’s inclusion of a Most Favoured Nation (MFN) clause, which requires that market access offered to non-EU trading partners be extended to the EU as well. There is also disagreement on the link between capacity building support and trade liberalisation commitments in the EPA. Other contentious issues include financial support, delivery means and accompanying measures to address the impact of EPAs and build productive and competitive capacity. Central Africa is trying to accelerate its own regional integration process. It is unlikely that overall agreement will be reached during regional consultations or negotiations with the European Commission in Brussels on May 26-30, but talks should help to narrow differences. The two parties are expected to meet in Central Africa in July, where they are confident progress will be made towards a comprehensive regional agreement. Cameroon has not yet signed its interim agreement, despite being in the final stages of the process.
West African EPA deadline slips a second time
West Africa is unlikely to agree its EPA market access offer by the end of June, despite intense efforts to meet this deadline. As is the case in many African and Pacific regions, the delay is primarily due to capacity constraints and disagreements on national exclusion lists and dismantling tariff schedules. West African officials pushed for a definition of sensitive products as well as an extension of the deadline to complete national sensitive product lists and the regional market access offer, during a dedicated workshop in April. Sources indicate that the deadline for national lists was May 21, but several countries were unable to meet this. A regional offer will be difficult to secure and will not now be considered until the region’s ministerial ‘EPA Follow-Up’ committee in July. West Africa is keen to agree its regional EPA by June 30 2009, otherwise the Côte d’Ivoire and Ghana interim agreements will enter into force and threaten regional integration.
Work on the EPA text is reportedly proceeding well and should be ready for negotiations in June. West Africa also produced a draft ‘EPA for Development’ programme, which it intends to present to the European Commission. Sources indicate this document sets out EPA accompanying measures, an estimation of needs and costs for AfT and regional integration, and a 15-year calendar for EPA implementation. The struggle to finalise West Africa’s Common External Tariff (CET) advances, but a political decision to continue efforts beyond the end of June deadline is expected.
ESA outline areas for renegotiation of interim EPA
The Eastern and Southern Africa (ESA) region identified interim agreement provisions that it wishes to re-open in the move towards a full EPA, during a technical meeting in Lusaka from May 7-8. These include more flexibility regarding timing and coverage of trade liberalisation for LDCs; a revision of the MFN clause to exclude developing countries; enabling the use of export taxes; revision of the standstill clause and safeguards and improvements in rules of origin. The European Commission reportedly indicated it was open to discuss such issues in the EPA or WTO negotiations. It was agreed that the development strategy, matrix and benchmarks will be refined to serve as a basis for joint mobilisation of additional resources. In addition to agriculture, new issues such as services, investment, intellectual property, competition rules, public procurement, sustainable development and environment were discussed for the first time in Lusaka. ESA’s next meeting is scheduled for the end of June.
Meanwhile, ministers from the Common Market for Eastern and Southern Africa (COMESA) requested backing for a Customs Union during a Council meeting in Nairobi on May 15.2 Most COMESA countries have aligned their tariff structures and schedules, but lists of sensitive products and trade liberalisation coverage remain thorny issues. In a bid to broaden markets and boost trade, ministers called for COMESA to join free-trade areas with the East African Community (EAC) and the Southern Africa Development Community (SADC). These three groups will meet to discuss later this year.3
EAC makes good progress towards a common market
Negotiations for an EAC Common Market were launched during a high level task force meeting in Kigali from April 14-22. Sources claim that good progess was made and that the taskforce is expected to finish its work by end 2008.4 According to Eriya Kategaya, chairman of the EAC Council of Ministers, the establishment of a Common Market will turn the EAC into a “sizeable economy with great potential for joint development and robust participation in the global economy.”5 Rwanda’s East African Affairs minister, Monique Mukaruliza, said member states “must act resolutely in pooling the entire region’s resources as well as enhance the private sector competitiveness regionally and in the international markets to uplift the standard of living in the region.”