Trade Negotiations Insights • Volume 8 • Number 1 • February 2009

2009: EPAs at the crossroads

by Glenys Kinnock

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I suppose things could be worse for the EPA negotiations. After all, this time last year the ACP were contemplating the implications of their initialing of interim EPAs, which were ultimately agreed in haste, proved apparently inflexible, and represented a limited outcome, as far as the Commission was concerned.

The policy of concluding separate deals with individual countries, which has led to clear discrepancies between the Agreements, has had serious implications for the ACP’s young and fragile regional groupings. It has also undermined regional integration as a proven tool for promoting development.

It must be acknowledged that the positions of the ACP group, reached at the Ministerial level, have tended to unravel in the face of inordinate EU pressure both at the national and regional level. This has led to conflicts of interest and contention between ACP countries and regions, which is hardly conducive to the encouragement of effective dialogue, increased understanding, and a common pursuit of key development objectives. Nevertheless, there has always been clarity about the fact that those nations understand they are locking themselves into trade regimes of indefinite length and which have huge implications for their citizens.

And of course, whatever happens in the future, there will still be an urgent need to effectively review and monitor the EPA processes. At our Joint Parliamentary Assembly meetings, we are regularly made aware by ACP Parliamentarians of the fact that there has been barely any structural engagement with their Parliaments, and contacts with the ACP public and private sectors have been inadequate, to say the least.

These are ongoing issues. Now, however, we should focus on what are the prospects at the beginning of 2009. First, we can really take heart from the fact that there is a new Commissioner who has pledged to build and renew a relationship of respect, understanding, and partnership with the ACP. Commissioner Ashton and her DG Trade colleagues cannot afford to continue along the same path followed by the previous Commissioner. I trust that we will see a new flexibility that will be translated into a practical willingness to reduce the pressure on the ACP to suppress their reservations, to “get on with it,” and to sign on the dotted line.

The justifiable plaudits that Commissioner Ashton has received for her change in style and tone must now, as she herself has acknowledged, be matched by a change in substance. She is genuinely promising to offer real progress, but many of us can’t help fearing that Europe, as the dominant partner, holding all the cards, is unlikely to want to make major concessions. She has inherited a difficult legacy and a great deal hangs on her ability to fulfil the promise that she displayed both at her hearing in the European Parliament and at the meeting with the International Trade Committee.

And surely, as a matter of basic need and self-interest, the EU must now look beyond EPAs to build the improved relations with the ACP that will be helpful if Europe wants to broker critical multilateral agreements on, for instance, trade and climate change. Clearly in negotiation with countries such as China, India, and Brazil, Europe’s alliance with the ACP would be vital.

Similarly, the Commissioner will need to decide how she can convince those ACP countries that have, until now, proved not to be susceptible to European Commission pressure. Building effective regionalization would be an important element, but this implies renegotiation of the interim EPAs, and a commitment to facilitate and support indigenous initiatives.

The ACP has unstintingly asked for clarity from the Commission on the issue of renegotiation and for the “revisiting” of Agreements. It would appear, however, that renegotiation is actually already happening in practice - for instance, in a November 2008 TNI article, Judith Fessehaie reports that Zambia, and the Eastern and Southern African region, are renegotiating provisions on export taxes, quantitative restrictions, and trade remedies for unforeseen events.

Many ACP countries fear that once they have signed an interim EPA, they will have weakened their bargaining position and that disputed provisions in the interim text will remain in the full EPA. Furthermore, it is apparent that renegotiation of contentious provisions is ongoing and overlaps with the negotiation of services and new generation issues.

The Commission, however, continues to maintain that contentious issues can only be renegotiated after signature, in the context of negotiations towards a full EPA. They fear that revisiting one or two clauses will open up a Pandora’s Box, and that the interim EPAs initialled at the end of 2007 will unravel. On the other hand, it seems absurd to pressure the ACP to sign an agreement that they do not agree with, and which includes provisions that the Commission knows the ACP is not committed to implement.

It is important to note that the need to continue negotiations was clearly endorsed by the EU Council of May 2008. But now, what we are seeing is a smoke and mirrors approach – and one which has very little to do with legal rules.

It can be argued that not until full ratification will the agreements be non-negotiable and fully binding and the assumption now would appear to be that this should not happen until a full and comprehensive EPA is signed. Ratification of a text before a full EPA is finalised, according to some experts, would seem to make absolutely no sense. And also, some say the claim that the signature is essential for WTO notification is simply a red-herring.

One suggested compromise worth considering would be for the parties to sign a red lined text clarifying their unbreakable and absolute policy positions. This would limit the scope of continuing negotiation to the areas specifically identified, but it would also reassure the ACP of their right to negotiate contentious provisions.

And of course, European and ACP Parliamentarians have naturally spent a great deal of time deliberating on all the issues and problems raised in the EPA negotiations.

As we begin 2009 – because of the implications of EPAs for the EU budget – the European Parliament (as the EU budgetary authority) has the power of assent, without which everything would grind to a halt. This has been described, justifiably, as the “nuclear” option, since the Parliament is constitutionally limited to making a yes or no decision on whether to give assent. However the Parliament is, by its very nature, committed to maximising opportunities to exert influence on the Agreements and to setting out conditions for a Parliamentary assent.

In addition, Parliaments in EU Member States, depending on their constitutional arrangement, may be called upon to ratify EPAs.

At the time of writing, neither the signed Agreements with CARIFORUM or Côte d’Ivoire, nor indeed any other Agreements, have been referred to the European Parliament for assent. And the truth is that the Agreements that have been negotiated but not yet signed are, at the behest of a few member states, still in the Council being translated into all the official languages.

The scrutiny process is continuing, and we have plans for debates, questions, and a number of resolutions on the CARIFORUM EPA and other interim EPAs for the Parliament’s March plenary.

In the coming weeks we must build consensus and undertake to negotiate an outcome that will reflect the need for the Parliament to take a strong and principled position at this time. I trust that the Parliament will remain constructive and that we will, through the Joint Parliamentary Assembly (JPA) and other channels, continue to cooperate with ACP negotiators and colleagues.

My final point relates to the worrying institutional changes included in the Cariforum EPA which, as far as Parliamentary oversight is concerned, threatens to undermine the clear role and responsibility of the JPA as enshrined in the Cotonou Partnership Agreement.

There are concerns about the implications of setting up parallel institutional arrangements to those agreed under the Cotonou Partnership Agreement. It seems that as far as the Parliamentary Forum is concerned, very little thought has gone into the logistics of organizing and paying for new parliamentary structures, and also Council of Ministers structures.

The Caribbean, like all the other ACP regions is experiencing turbulent economic and financial times. It is to be hoped that the high-level meeting planned by the Commonwealth Secretariat on 27 January 2009 will yield rewards and the prospect of some straight-talking that can identify common actions and explore how EPAs can benefit ACP countries.

All of that remains to be seen, but we are encouraged by Commissioner Ashton’s determination to keep EPA negotiations at the top of the agenda. However, I sense that generally there is fatigue around EPAs – the never-ending negotiations that never seem to go anywhere. But there’s still a lot to play for, including ensuring that there is adequate, front loaded, and predictable funding to compensate the ACP for the cost of liberalization, restructuring, and EPA implementation.

These are battles that have to be fought and won in 2009, and that means that there must be a unity of purpose, and a determination to complete the task. The onus is on all of us to work together in the spirit of Cotonou to make EPAs work for the greater good of the ACP and Europe.

Author: Glenys Kinnock is Co-President of the ACP-EU Joint Parliamentary Assembly.