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African Union Trade Ministers adopt EPA declaration
African Trade Union ministers called on the African group in the World Trade Organization (WTO), in collaboration with other members, to intensify efforts towards appropriately amending Article XXIV of GATT 1994. The intent is to allow for necessary Special and Differential Treatment provisions, as well as the less than full reciprocity principle, and explicit flexibilities that are consistent with the asymmetry required to make the Economic Partnership Agreements (EPAs) development oriented. This would be inline with the EPA declaration, which was adopted at the African Trade Union meeting on 16-20 March 2009. The ministers also called on the European Commission to show greater flexibility in its position during the negotiations of full and comprehensive EPAs.
Ministers stressed that a well structured, balanced, and development-oriented EPA, which offers improved market access into the EU market, takes adequate account of the difference in the levels of development of the EU and African countries, provides the latter with necessary policy space, and which addresses the supply-side constraints of African economies can offer significant development dividends to Africa.
Ministers also welcomed the EU strategy on Aid for Trade and urged that the initiative be adequately funded, and effectively and expeditiously implemented to enable African countries and regions to fully benefit from the implementation of EPAs.
Ministers further reiterated the need for the contentious issues in the EPAs to be adequately addressed in the context of the negotiations of full and comprehensive EPAs.
Ministers also considered an EPA Template as work in progress and called on the African Union Commission (AUC), United Nations Economic Commission for Africa (UNECA), and the regional economic communities (RECs) to continue to consult in order to further strengthen the document and ensure coherence. They encouraged African countries and regions to make use of the template where necessary.
Of note was the need to keep trade open, to monitor the impact on competitiveness of African products that the stimulus and bail out packages in the west are having, and the need to develop intra-African trade. WTO Director General Pascal Lamy (1) said the lack of liquidity for trade financing and the higher risk premium is noticeably impacting the demand for commodities. This is outside the jurisdiction of the WTO, but international financial institutions and commercial banks are being mobilised to address the problem. Protectionist measures are taking the form of non-tariff barriers and import licensing, as well as tariff and subsidy rises and bail out packages.
Central African EPA negotiations postponed
The joint technical negotiating meeting scheduled to be held in Brussels the week of 20 April has been postponed at Central Africa’s request. This will allow Central Africa to first hold a regional trade ministerial meeting to, among other things, discuss EPA issues and establish their political direction. The CEMAC Secretariat is also currently undergoing a major reorganisation (all posts have apparently been published and are available), which has also disrupted its operations. No new date for joint negotiations has been set yet.
Progress made in West Africa EPA negotiations, but much work remains to conclude in June 2009
Progress was made at the informal round of EPA technical negotiations in Abuja from 24-27 March 2009. The two sides have agreed nearly all of the EPA text in goods, dispute settlement, general exceptions, institutions, and final provisions. Progress was also made in negotiations on issues such as transition periods for Special and Differential Treatment and agricultural subsidies. Divergence remains, however, on development co-operation, including beyond the Cotonu Agreement, and tariff measures to support sectoral policies in West Africa. West Africa has proposed that the joint Council consultative committee consider these issues.
Divergence also remains in relation to West Africa’s (WA) market access offer. The European Commission identified products representing around 20% of EU exports that could potentially be good candidates for liberalisation either because they are inputs for certain WA economic operators, or because there are little to no exports from the EU (hence no competition). WA took careful note of the European Commission’s comments and appreciated their approach of not focussing on the coverage, but rather aiming at establishing a development friendly offer, based on sound economic reasoning. WA promised to table an improved offer in the next round on this basis.
A separate parallel meeting took place on rules of origin with detailed line by line exchanges on specific rules for agricultural products. These exchanges open the way to potentially solving all divergences on the draft protocol and will continue in a next series of meetings where detailed exchanges on fishery and industrial products will take place.
Eastern and Southern Africa and the European Commission break deadlock to allow joint technical EPA negotiations to resume
Joint Technical EPA negotiations can now resume after months of suspension, following political agreement reached between ESA Trade Ministers and the European Trade Commissioner. Consensus was reached during their joint meeting held in Lusaka on 6 April 2009. According to ESA sources, the major challenges faced in the negotiations are largely due to the European Commission’s inflexibility to accommodate ESA least developed countries (LDCs). At the joint ministerial meeting, however, Commissioner Ashton showed her readiness to deal with contentious issues such as export taxes, quantitative restrictions, infant industries, development benchmarks, agriculture,
including a special safeguard clause for agriculture, additionality of resources, and other political issues such as the most favoured nation clause. There was an understanding that once political decisions are made and compromises reached, they will be attached to the interim EPA before signature. The Commissioner also expressed a desire for the negotiations to be completed—at least on the broad framework—before the mandate of the current Commission ends. In this respect, the European Commission would be prepared to adopt a flexible approach underpinned by the principle of variable geometry whereby those countries that are willing to move on some issues, including trade in services, could do so and others can join later.
Sources attending the meeting say Ashton also made it clear that in a partnership she was not going to impose anything that the other partner was not wiling to accept at this point. If what she has said is followed up by Commission officials, progress can be made, sources say.
As regards the signing of the ESA-EU IEPA, reports indicate that it may take place in August. The Commission’s services are still bogged down in the translation quagmire. Moreover, DG Trade is adding on new challenges by trying to link decisions on ESA requests with the IEPA trade regime that will be applied on its signature.
East African Community EPA nearly finalised, but divergence remains on key issues
While much of the text of a comprehensive EPA has been agreed, East African Community (EAC) sources indicate that negotiation progress is proceeding slowly on areas of interest in relation to development co-operation, trade in services, trade-related issues, and rules of origin. Monitoring and evaluation and benchmarking to guide implementation also need to be discussed.
Tanzania continues to object to a national identity document, access to and use of land, as well as permanent residence inclusion in the EAC Common Market Protocol. (2)
According to EAC sources, due to challenges faced by the region, the initial deadline of concluding the full EPA by July 2009 may not be met.
“Time is not on our side,” EU Trade Commissioner tells SADC
“Time is not on our side,” wrote the EU Trade Commissioner to SADC Trade Ministers at the end of March 2009, following their joint meeting days earlier. During their meeting, agreement, in principle, was reached on most of the main concerns expressed by South Africa, Namibia, and Angola (i.e., quantitative restrictions, special treatment for Lesotho, food security, free circulation of goods, infant industry, export taxes). Here too, the European Commission proposed that the two remaining outstanding issues—identification of parties and the most favoured nation clause—be discussed in the framework of the negotiations towards a final EPA. She recalled the urgency of signing the interim EPA and she called on Ministers to agree with the European Commission proposal on the way forward in order to sign the interim EPA, notify the WTO, and advance negotiations on the final EPA.
SADC officials note, however, that concerns remain within the region about the impact of notifying the interim EPA to the WTO before concluding the full EPA. They are particularly concerned with losing negotiating power on contentious issues and tariff re-alignments within the region. Political level follow-up continues on both sides to discuss how to move forward and how to perhaps implement a SADC EPA without South Africa while not undermining the SACU Common External Tariff. It seems the IEPA may be signed without South Africa, especially if rumours are confirmed that Namibia appears to have been swayed and is now leaning towards putting its signature under the IEPA.
At the moment, a date for the signature of the SADC interim EPA is not yet confirmed. Technically, it could be as early as May if the SADC group gives their agreement in the coming days.
COMESA, EAC, and SADC agree to establish single customs union
Twenty six African states from three regional economic communities - COMESA, EAC and SADC – agreed on a free trade agreement (FTA) encompassing member states of the three Regional Economic Communities with the ultimate goal of establishing a single customs union. The decision was taken at a meeting on 6 April 2009 in Lusaka. Here, COMESA, EAC, and SADC adopted a memorandum of understanding (MoU) on inter-regional co-operation and integration, which binds leaders to liberalise trade among their economies, co-operate in customs matters, and establish an FTA. It also obligates the leaders to design joint programmes for agricultural development and food security, and to collaborate with other members in preparation of common regional positions and strategies in both multilateral and international fora.
To facilitate cross-border trade, reduce transport delays and costs, and promote public and private sector investment, which in turn limits the potential to raise GDP growth rates, leaders also launched and received funding for a comprehensive USD 1.2bn Aid for Trade and infrastructure programme. The North-South Corridor Pilot Aid for Trade Programme (3) focuses on major regional infrastructure development including transport, power, and trade facilitation projects along the North-South Corridor traversing eight countries in East and Southern Africa. The European Commission, for example, pledged EUR 115 million and the UK committed £100m. The African Development Bank Pledged USD 600 million, as well.
Leaders also announced plans to implement critical reforms such as simplifying regulatory processes to speed up cross border clearing procedures, harmonize transit and transport regulations, and simplify administrative requirements.
Caribbean focus is on establishing institutions for EPA implementation
The Caribbean is focussing on the establishment and operationalisation of various EPA institutions at both the regional and national levels. Consequently, there have not been any significant meetings on the EPA during the past month.
The Caribbean Regional Negotiating Machinery (CRNM) is holding a series of seminars designed to build awareness of the European Commission-CARIFORUM EPA with the region’s private sector. The EPA awareness workshops conducted in Barbados, Dominica, Grenada, and the Bahamas were received with keen interest.
Still no reply from the European Commission to the Pacific’s request for continuation of EPA negotiations
No reply had been received by mid-April 2009 from European Trade Commissioner Catherine Ashton to a letter sent on 10 March 2009 from Hans Joachim Keil, Samoa Trade Minister and Pacific Leadspokespeson for EPA Negotiations. In the letter, Keil proposed to hold a Joint Technical Working Group meeting in late March/early April in Brussels to seek convergence on outstanding technical issues (MFN treatment, export taxes, infant industry provisions, etc.) to the greatest extent possible. Contentious issues must be addressed before additional Pacific ACP countries table goods market access offers, after which time senior political representatives could decide on the way forward with a view to signing the EPA this year.
A meeting of the Pacific ACP Technical Working Group on Legal, Institutional and Capacity-Building Issues is tentatively scheduled for 20-21 April 2009 to prepare for the next joint negotiations with the European Commission.
In other news, the Pacific Islands Forum Secretariat is seeking proposals from experts on aid for trade and the establishment of the Pacific Trade and Development Facility. (4)
Author
Melissa Julian is Knowledge Management Officer with ECDPM.
Notes
1. See: www.wto.org/english/news_e/sppl_e/sppl121_e.htm
2. East African Business Week, Kampala. 14 April 2009. See: www.tralac.org/cgi-bin/giga.cgi?cmd=cause_dir_news_item&cause_id=1694&news_id=64649&cat_id=1026
3. www.northsouthcorridor.org
4. Request for proposals on Aid for Trade and the establishment of the Pacific Trade, Pacific Islands Forum Secretariat, 15 April 2009. See: www.pipso.org/pipso-forum.php?PHPSESSID=372563 1d11d4d2f7a2092f3aecea215b&topic=60.0
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