Trade Negotiations Insights • Volume 7 • Number 9 • November 2008

EPA Negotiations Update

by Melissa Julian, ECDPM

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Ashton confirmed as EU Trade Commissioner as Mandelson resigns

Peter Mandelson stepped down as EU Trade Commissioner on October 3, after being invited to join the UK government as Secretary of State for Business. Baroness Catherine Ashton was subsequently confirmed as his replacement and will remain in office until November 2009 when a new Commission executive is appointed.1 In her confirmation hearing by the EU Parliament on October 22, Ashton convinced MEPs she has the analytical skills and negotiating experience to successfully execute her responsibilities. (2) Though EU trade policy remains unchanged, the new Commissioner raises hope in the ACP and the European Parliament that she will be more transparent, inclusive and receptive to their views than her predecessor. Ashton said her priority is to engage in dialogue and negotiation with the ACP, including on controversial issues, and agree to necessary changes that will ensure EPAs are the best possible agreements and are supported by ACP countries.

EU Commission concerned by IEPA signature delays

European Commission procedures, which require interim EPAs be translated into 23 EU languages are delaying notification of the final texts to increasingly impatient WTO members, the Director General of the European Commission’s Trade Directorate, David O’Sullivan admitted to International Trade Committee MEPs on October 13. Translation is needed before the EU Council will authorise the Commission to sign and then notify them to the WTO. The Commission aims to sign and notify the IEPAs with Ghana, Côte d’Ivoire and Cameroon in November or December and with the Southern Africa Development Community (SADC), Eastern and Southern Africa (ESA) and the Pacific in early-mid 2009. Ratification by Parliaments can then begin, though some IEPAs may only be ready for approval after the new EU Parliament is elected in June 2009.

ACP to meet key EU member states on EPAs

The ACP Secretary General and President of the ACP Council are to work on agreeing modalities by the end of October to allow ACP leaders to engage in high-level consultations on EPAs with certain EU member states. This was agreed by ACP Heads of State and Government at their summit in Accra on October 2-3. (3) The summit also instructed its Council of Ministers to further consider the creation of an ACP Free Trade Area. In a separate declaration, ACP leaders reiterated that further progress in the EPA process must be based on adequately addressing the ACP’s legitimate concerns. (4)

Progress made on African EPA template

A template to guide African groups towards negotiating comprehensive pro-development EPAs, was the subject of a workshop organised by the African Trade Policy Centre (ATPC) and the Economic Commission for Africa (ECA) on October 8-10 in Addis Ababa. The template incorporates common African positions on EPAs and WTO negotiations. During the meeting, it was agreed to focus attention on overcoming shortfalls in the EPA implementation process and seeking ways to ensure that all stakeholders, notably those involved in infrastructure development and productive capacity issues, are involved in EPA activities. It was also acknowledged that while the different negotiating groups should aim for common positions on key aspects of the negotiations, inevitabley they would adopt different positions on other aspects. It was therefore stressed that the template should capture elements where the regional negotiating groups have the same positions vis-à-vis the EU.

Central Africa refuses to discuss market access offer

Central African EPA negotiators maintained their proposal for market access liberalisation of 71% over 20 years, with a 5 year preparatory period, at the EU-Central Africa Technical and Senior Official EPA negotiations on September 30-October 7 in Brussels. They called on the European Commission to interpret WTO provisions on this issue flexibly. The Commission maintains that trade liberalisation under 80% is not WTO compatible. Without a revised EU proposal, Central Africa refused the Commission’s request to jointly examine its market access offer and try to improve it. Central Africa called for the priorities of the Joint Orientation Document (JOD) on reinforcing production capacities and increasing economic competitivity to be adopted by both parties for inclusion in the EPA text. The Commission said the JOD can be referred to and annexed in the EPA. After much debate, important differences of opinion continue on this issue.

West Africa in difficult process to agree regional market access offer

Discussions to define the list of sensitive products to be included in West Africa’s market access offer to the EU were difficult, during an ECOWAS-UEMOA validation workshop in Ouagadougou on October 15-16. While member states thought the proposal had been improved, they still proposed further changes. Several major questions need consultation and internal negotiation in order to reach regional compromises. These include the definition of rules of origin and trade defence instruments, the treatment of inputs produced in the region, pharmaceutical products, basic food products for food security, ocean resources and textile products.

East African Community raises concerns on EPAs

Regional integration is not well respected in EPA negotiations because EAC countries are forced to negotiate issues that they are not able to properly study, according to EAC representatives at a workshop organised by ATPC and EAC on October 8-10 in Addis Ababa. One of the main areas to be negotiated is development that reflects regional integration ambitions. The EAC is not yet ready to negotiate on services and although partner states are interested in trade related issues, capacity building is required in this area before an offer can be made to the EU. EAC governments were asked to scrap the IEPAs by regional parliamentarians at the Inter-Parliamentary Relations Seminar in Kigali, Rwanda on October 1-3. (5) However the IEPA has to be ratified by national, not regional, parliaments.

ESA region prepares for difficult negotiations with the EU

The EAC’s split from ESA in the EPA negotiations is making it difficult to finalise the COMESA Customs Union by 2010, according to ESA representatives at the same ATPC-ECA workshop. They also said that the issue of export taxes is impacting on regional integration. Divergent views remain among the Europeans on the contentious standstill clause to raise tariffs for infant industries and there is still no agreement on substantially all trade, timeframe, flexibilities or bilateral safeguards. The development component is still empty. The European Commission wants to include investment in the services negotiations, whereas ESA does not. ESA does not want to go beyond TRIPs on intellectual property rights. Zambia concluded negotiations with the EU on its market access offer for the ESA IEPA on October 1. (6)

SADC also preparing for EPA negotiations with the EU

Botswana, Lesotho, Mozambique and Swaziland are ready to sign the IEPA according to SADC EPA representatives at the joint ATPCECA workshop in Addis. However, Namibia has concerns it seeks to redress ahead of signing. These countries now fear that if they do not sign they will lose their trade preferences from the EU. South-Africa and Angola have not yet even initialled the IEPA and worry that early signature by the others would have implications on how their concerns will be addressed. There is also apprehension about subjecting Parliament to two ratification processes, i.e. for the IEPA and the final EPA. These countries seek assurances that there will be no loss of market access while their issues are being addressed and that they will sign and ratify one single agreement that accommodates all parties and addresses every outstanding concern.

EAC-ESA-SADC agree to merge into a single REC with an FTA

The first ever Tripartite Summit of the Heads of State and Government of the Common Market for East and Southern Africa (COMESA), East African Community (EAC) and the Southern Africa Development Community (SADC) met in Kampala on October 22. (7) The summit agreed on a programme for harmonising trade arrangements, the free movement of business persons and the joint implementation of inter-regional infrastructure programmes, as well as institutional arrangements that the RECs would use to foster cooperation. The summit directed a Task Force to develop a roadmap for the implementation of this merger to be considered at its next meeting.

Caribbean signs comprehensive EPA with the EU

Thirteen of the fifteen CARIFORUM countries and the EU signed an EPA on October 15. (8) Guyana signed the EPA five days later (9) following intense discussion and eventual agreement on a joint declaration between the European Commission and CARIFORUM. (10) In a media release the government stated that due to “the imminent threat of GSP sanctions, Guyana will be signing the EPA.” (11) As we go to print, Haiti has not signed the EPA. Some African governments were watching closely to see if the EU would increase tariffs for Guyana. However, given that Guyana has signed, EU member states did not have to vote by qualified majority on whether to remove the country from EU Council Regulation 1528/2007, which would have resulted in Guyana being subject to the EU’s standard GSP system. African countries will now have to test the EU’s will themselves should they choose not to sign an EPA.

Pacific

Pacific ACP (PACP) trade ministers met in Nadi, Fiji on October 20-21. Ministers reaffirmed their commitment to continue to negotiate the EPA as a single region. Ministers recognised that while progress had been made on various technical issues at an earlier meeting of PACP and European Commission officials in September, a significant number of EPA issues remained outstanding and required time to work through. Ministers directed their officials to continue efforts on these issues and to meet directly with the European Commission as soon as possible to make significant progress. (12) Minsters also agreed that a comprehensive EPA might include provisions relating to intellectual property rights with obligations not going beyond those contained in the Cotonou Agreement. (13)

For more EPA news please visit: www.acp-eu-trade.org/epa

1 Commissioner Mandelson resigns to join UK government, Baroness Ashton of Upholland nominated to succeed him, European Commission Press Release, October 3 2008, http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/1459&format=HTML&aged=0&language=EN&guiLanguage=en
2 Website for European Parliament Hearing, http://www.europarl.europa.eu/hearings/commission/2008_10/commissioners_en.htm and hearing transcript http://www.dgroups.org/groups/CoOL/index.cfm?op=dsp_resource_details&resource_id=50555&cat_id=6364
3 Decision on Economic Partnership Agreement, 6TH SUMMIT OF ACP HEADS OF STATE AND GOVERNMENT, October 2-3 2008, www.acpsec.org/summits/ghana/ACP2805608_decisions_6thSummit_e.pdf
4 Declaration, 6TH SUMMIT OF ACP HEADS OF STATE AND GOVERNMENT, October 2-3 2008, http://www.acpsec.org/en/accra%20declaration/Declaration%20and%20Decision%20-%206th%20ACP%20Summit%20(2).pdf
5 EAC Common Market Drive Gets Major Boost as Region’s Parliamentarians Join Forces, October 7, www.apanews.net/apa.php?page=show_article_eng&id_article=76860
6 Zambia joins Economic Partnership Agreement with EU, October 1 2008, http://www.acp-eu-trade.org/library/library_detail.php?library_detail_id=4704
7 Results of the First COMESA–EAC-SADC Tripartite Summit of Heads of State and Government in Kampala 22.10.08. Special Edition E-COMESA Newsletter 177 - Tripartite Summit COMESA, EAC & SADC www.dgroups.org/groups/CoOL/index.cfm?op=dsp_resource_details&resource_id=50591&cat_id=6364
8 EU and Caribbean sign EPA, European Commission Press Release, October 15 2008, http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/1510&format=HTML&aged=0&language=EN&guiLanguage=en
9 Guyana becomes 14th signatory to the Cariforum-EC EPA, CRNM Press Release, October 20 2008, www.crnm.org/documents/press_releases_2008/pr0813_Guyana_Becomes_14th_Signatory_to_ the_EPA_rev2.pdf
10 EU Council Register, October 3 2008, http://register.consilium.europa.eu/pdf/en/08/st14/st14070.en08.pdf
11 Guyana Government Media Release on Caribbean EPA Signing, October 15 2008 www.dgroups.org/groups/CoOL/index.cfm?op=dsp_resource_details&resource_id=50473&cat_id=6364
12 Pacific ACP States Committed to Continuer Negotiating EPA with the EU as single region, Pacific Islands Forum Secretariat, October 24 2008, http://www.forumsec.org/pages.cfm/newsroom/pressstatements/2008/pacp-states-agree-continue-epa-negotiations-as-single-region.html
13 http://www.pacificmagazine.net/news/2008/10/23/some-pacific-island-countries-still-not-ready-for-free-trade