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EPAs progressing, but signing depends on development certainty: ACP, EU
Substantial progress has been made in the EPA negotiations in recent weeks according to African, Caribbean, and Pacific (ACP) Group President, Joseph Maáhanua and EU Trade Commissioner Catherine Ashton. But both also stressed to those attending the ACP-EU Joint Ministerial Trade Committee (JMTC), which took place from 5-7 May, that agreement on remaining outstanding and contentious issues will be necessary before interim EPAs can be signed. Common ground on stumbling blocks - such as market access offers, the inclusion of Most Favoured Nation (MFN) and non-execution clauses, the definition of Parties to the Agreement/dispute settlement procedures, and elimination of taxes - will be necessary to ensure WTO compatibility and a stable, sustainable trading relationship with the EU.
Solomon Islands Ambassador Maáhanua noted that both Pacific and African regions have raised several contentious issues that need to be properly addressed before their countries can sign off on the EPAs[1]. He noted that the current scenario, where each ACP region has multiple regimes governing ACP-EU trade, is unsustainable. The ACP president also highlighted the challenges the group faces in light of the global economic, food, fuel, and financial crisis. He reportedly stated categorically that while the ACP is still committed to and intends to remain engaged in EPA negotiations, ACP governments cannot sign EPAs unless it is absolutely certain that those arrangements will lead to developmental benefits. To achieve progress, the ACP president suggested that the two sides tackle those issues that regions are ready to deal with and delay consideration of the subjects that need to mature in the regional processes. Finally, Maáhanua called on the EU, and the international community, to honour their commitments to Overseas Development Aid.
CEMAC re-organisation delaying EPA negotiations
There have been no Central Africa-EU negotiating meetings since February 2009. The Economic and Monetary Community of Central Africa - or CEMAC as it is known by its French acronym - had to postpone the negotiating round planned for the week of 20 April 2009 because they are in the midst of an internal re-organisation that has seriously disrupted their operations. Internal preparations, however, continue ahead of the next joint negotiating meeting, the date of which is yet to be scheduled.
West African EPA negotiations moving briskly, but much work remains
EPA trade commitments and their implementation modalities should be in line with the level of development of the West African region and EPA support measures should be in line with the development and poverty reduction strategy of the region, according to reports from the West Africa Ministerial EPA Follow-Up Committee meeting from 12-15 May 2009. West African Ministers, following a brief from their chief negotiators on the status of EPA negotiations (see below), called for contentious EPA issues to be resolved as soon as possible at the highest political level. They asked their chief negotiators to continue EPA negotiations with the EU and to insist principally that the EU should preserve flexibility accorded to developing countries by agreeing to a pro-development interpretation of WTO GATT Article XXIV. The Article, they say, translates into an appropriate EPA transition period and scope of trade liberalisation based on an assessment of West Africa’s needs. Commitments beyond WTO obligations should not be forced upon the region and West African policy space must be maintained, they stressed. Other priorities are to ensure provision of development cooperation resources by annexing a protocol on the engagement of parties to implement the West Africa EPA Development Programme (EPADP or its French acronym PAPED) to the EPA. Functionality of the EPA institutional framework was also called for as well as the effective evaluation of the impact of implementation on improving the economy’s competitiveness. Finally, Ministers instructed EPA negotiators to reject the European Commission’s proposal to include a non-execution clause in the EPA.
The Ministerial meeting followed the EU-West African EPA technical and senior officials level negotiators’ meeting from 20 to 24 April 2009 where several compromises were reached in areas, such as export taxes and free movement of persons. Significant progress was also achieved on the EPA-related development cooperation part of the agreement, but the parties could not agree on funding procedures and implementation of PAPED nor could they agree to extend support beyond fiscal compensation. A particularly difficult issue relates to West Africa’s proposal to create a link between the implementation of its EPA commitments and the provision of European Commission’s financial support programmes to improve competitiveness and production capacities in the region. The European Commission is not in favour of establishing such a link.
ESA interim EPA could be ready for signature in June
The Eastern and Southern Africa Group (ESA) interim EPA could be ready for signature in June 2009, following the ESA-European Commission (EC) senior officials meeting on 28 April 2009. Negotiations focused mainly on market access issues, rules of origin, and trade in services. The European Commission agreed to the ESA proposal to limit the scope of the standstill clause to products covered by the liberalisation schedules in line with other EPAs. The ESA group proposed that rules of origin should be structured asymmetrically in their favour, but the EC did not agree, saying the clause would make cumulation very difficult. On services, ESA underscored some areas of concerns, namely the MFN clause, the mutual recognition and the definition and conditions related to the Mode 4 categories.
The EC insisted the first priority should be signature of the interim EPA. ESA requested a mutual agreement on all the outstanding issues expressing the need to have a political understanding and to lock in agreements reached to ensure progress. This was agreed, but what form this will take, will have to be discussed and agreed.
EAC seeks EU market access assurance in interim EPA signing
There was no East African Community (EAC)-EU EPA negotiating round held in the second half of April/early May 2009. There are, however, some contentious issues that need to be resolved at a political level to pave the way for signing the interim EPA and finalising of the comprehensive EPA an EAC representative indicated in an update to the May ACP MTC. The EAC calls upon the EC to ensure that no ACP country will be removed from the list of beneficiary countries under Regulation 1528/07 (for interim EPA market access) as full EPA negotiations continue.
The EAC also calls for concrete measures to effectively address supply side constraints by enhancing actual investment inflows into the ACP. They are calling for concrete commitments that will ensure that adequate resources are provided as an integral part of EPAs. Other outstanding issues in the EAC-EU EPA negotiations include trade in services, agriculture, and economic development cooperation.
SADC interim EPA signing scheduled for 27 May
SADC EPA Ministers of Trade are meeting on 20 May 2009 to discuss progress in the EPA negotiations as well as the signing of the interim EPA currently scheduled for 27 May 2009. Following negotiations with the European Commission (EC) in March 2009, the main text of the interim EPA will remain unchanged and the best possible political and legal reassurances will be provided of the EU’s intentions regarding the full EPA. They will do this through a combination of declarations inserted into the final act of the interim EPA (which is signed by Member States, the EU Presidency, and the Commissions) and a letter of confirmation from the EC outlining in detail the deal reached in Namibia[ACCA1] . They will also align the interim EPA and Southern African Customs Union tariff schedules at the earliest opportunity through a joint decision of the interim EPA institutions.
From the EU Member States’ perspective, the deal struck shows the flexibility that they and the ACP have asked from the EC. South African sources, however, indicate that the key difficulty with Europe’s tariff alignment proposal is that it does not deal with the required alignment between the South Africa Trade and Development Cooperation Agreement (TDCA) and IEPA rules of origin. Even if Southern African Customs Union (SACU) import tariffs are aligned under the EPA and TDCA, the misalignment on rules of origin, as currently obtained, will require new customs controls within SACU, undermining the customs union. South Africa also seeks more clarity on how progress already achieved can be legally secured in an interim EPA signed without changes[ACCA2] . The Most Favoured Nation (MFN) clause and the definition of Parties to the Agreement/dispute settlement procedures, as well as finalising the SACU market access offer to the EU are also issues which need resolution. Nevertheless, South African sources say they remain confident that with more time and further engagement, the outstanding issues can be resolved.
Caribbean facing implementation challenges
Ambassador Henry S. Gill says he will resign as Director General of the Caribbean Regional Negotiating Machinery (CRNM) on 1 June. Gill said he based his decision on the Caribbean governments’ decision to incorporate the CRNM into the Caribbean Community and Common Market (CARICOM) Secretariat as a Specialised Department.[2]
An EPA Implementation Unit is operational in the CARICOM Secretariat and serves all Caribbean Forum of African, Caribbean and Pacific States (CARIFORUM) States (i.e., also including the Dominican Republic). Some CARIFORUM States have established or are in the process of establishing National EPA Implementation Units and some have designated EPA National Coordinators. Further, consultations are ongoing on the designation of the CARIFORUM Coordinator.
The CARICOM Council for Foreign and Community Relations meeting on 8-9 May acknowledged the re-submission by the Dominican Republic of its application for membership to CARICOM and noted that the matter would be considered further at the upcoming meeting of the Conference of Heads of Government in July[3].
Work in the Caribbean also continues on the rules of procedure for the various institutions of the EPA, identification of spokespersons who would deal with matters under the EPA where CARIFORUM has agreed to act collectively, and identification of capacity building and development support needs. Work is ongoing on an Infrastructure Fund for CARIFORUM. CARIFORUM is also continuing to refine the EPA implementation roadmap which sets out the legislative and administrative actions required at the national and regional levels and timelines for accomplishment of each action.
Pacific seeking EPA way forward
A response from the EU Trade Commissioner to the Pacific ACP (PACP) Spokespersons’ March 2009 letter requesting the resumption of EPA negotiations will be forthcoming shortly, according to ACP Group President Joseph Maáhanua, who was reporting to the ACP-EU JMTC on 5-7 May 2009. The region hopes the response will provide an impetus for further face-to-face negotiations this year with a view to concluding an EPA acceptable to both sides and tailored to the region’s specificities and achieving the objectives of Cotonou. He noted that at the same time, it is clear that many of the challenges still faced by the PACPs in the EPA negotiations are similar to those being confronted by other ACP negotiating groups. The Pacific ACP States would welcome an opportunity to discuss in more detail some of the issues to strengthen each other’s positions as well as that of the ACP Group as a whole, he said.
The PACP are under enormous pressure from their regional neighbours to hasten the launch of the Pacific Agreement on Closer Economic Relations, or PACER-Plus, negotiations from the earlier agreed 2013 launch to August 2009 (i.e., possibly before the EPA negotiations are concluded)[4].
Fiji, recently suspended from the Pacific Islands Forum, is not invited to regional meetings, but there will be discussions on its involvement in trade negotiations. The PACP are anxious not to set precedents in the EPA that would not allow countries time to liberalise services amongst themselves, negotiate a services agreement with Australia and New Zealand, and prepare their own detailed services offers and demands for trade in services with the EU.
Visit http://www.acp-eu-trade.org/ for all the latest EPA news.
Author
Melissa Julian is Knowledge Management Officer with ECDPM.
[1] www.acpsec.org/fr/coa/jointcoa2009.html
[2] CRNM Press Release, 11 May 2009, www.crnm.org/index.php?option=com_content&view=article&id=407:crnm-dg-gill-resig
[3] http://www.caricom.org/jsp/pressreleases/pres144_09.jsp?null&prnf=1)
[4] http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10570274&ref
[ACCA1]Not sure what the deleted text refers to.
[ACCA2]without changes to what?
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