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ACP, EU set early 2010 deadline for concluding EPA talks
William Haomae, co-president of the ACP-EU Council of Ministers and foreign affairs and external trade minister of Solomon Islands, reiterated ACP EPA demands at a meeting of the Joint ACP-EU Council of Ministers meeting held on 29 May 2009 in Brussels. The two key demands are greater flexibility in the negotiations and guarantees that no country should be worse off at the end of the process. Haomae welcomed assurances by EU Trade Commissioner Catherine Ashton that these concerns would be accommodated in future consultations.[i] “The ACP side is looking for decisive steps - guided by political will - that can move the process forward,” Haomae added. The Joint Council agreed to continue EPA negotiations with a view to concluding deals by early 2010.[ii]
EU Council confirms commitment to reach 2010 Aid for Trade target despite delays
The EU Council adopted conclusions on 18 May 2009 which note that, although the deadline for meeting its Trade-Related Assistance target has not yet been reached, the EU is close to meeting its collective pledge of €2 billion. The conclusions also reaffirm the EU’s commitment to reaching its 2010 target.[iii] The EU will continue implementing its 2007 Strategy on Aid for Trade in all its dimensions, including financial commitments and aid effectiveness principles.
Central Africa EPA negotiations remain stalled
The ongoing internal CEMAC secretariat re-organisation is continuing to hamper efforts to continue EPA negotiations with the European Commission, reports say. European Commission officials have indicated that while the pace of negotiations may seem slow to some observers, this should not mislead them as to the two parties’ intentions: to devote as much time as is necessary to the negotiations in order to reach a complete and balanced agreement that accounts for the specific needs and ambitions of the Central African region.[iv]
West Africa EPA negotiations deadline extended from June to October 2009
West African Heads of State and Government at their meeting in Abuja on 22 June 2009[v] reaffirmed the region’s commitment to the conclusion of a balanced agreement, focused on development and emphasised the need to continue with the regional approach to the negotiations. They urged the chief negotiators to finalise discussions on outstanding issues, such as the improvement of the development-oriented market access offer. They called on the EU and its member states to demonstrate clear commitment to the financing of the EPA Development Programme.
West African leaders also reiterated their commitment to the consolidation of the regional integration process. With regard to the regional common market, this will see the Common External Tariff (CET) for the region increase from the four tariff regime bands of between 0 and 20 percent for goods imported into the region from non-ECOWAS member states to include a fifth band to allow for member states to increase their peak tariff on imported goods from 30 percent to 35 percent for certain categories of goods imported into the region.
The EU and West African negotiators agreed to conclude a regional agreement on trade in goods and development cooperation by October 2009 at their 17 June[vi] meeting as conditions that must be on the ground for the overall development of the region are not yet in place.[vii] There are contentious issues that need to be settled before the conclusion of the EPA such as development issues, supply-side constraints, infrastructure facilities, capacity building, regional integration, and adjustment cost of liberalisation. Both sides reaffirmed their commitment to moving forward the longer term process to build a lasting partnership between the EU and West Africa.
ECOWAS EPA Negotiating Ministers called for an unequivocal EU commitment to funding an EPA development programme to ameliorate the effects of the agreement on West Africa before signing an EPA at the Ministerial Monitoring Committee meeting in Abuja, Nigeria on 15 May.[viii] Such a contribution to the EPA Development Programme (EPADP) should be “adequate and accessible” beyond the commitment already made in the European Development Fund (EDF), the Ministers said. They stressed the need for a financing plan to be presented by the EU prior to the signature of the agreement. On the issue of the liberalisation of market access for European goods, the ministers reiterated their position that only between 60 and 70 percent of the regional economy should be affected by liberalisation over a transition period of 25 to 30 years (preceded by a 5-7 year moratorium period in which no liberalisation would take place).
Southern African Development Community Members split to sign interim EPA with EU
A Southern African Development Community (SADC)-EU EPA was signed by three members of Southern African Customs Union (SACU) - Botswana, Lesotho and Swaziland - on June 4 2009 and on June 15 2009 by Mozambique to secure EU market access for these countries while negotiations for a full EPA with the seven country SADC EPA group are ongoing.[ix] The signing was notwithstanding South Africa, Namibia and Angola’s insistence that negotiations continue until a “fair and equilibrated accord” is reached.[x] The SADC EPA should not be allowed to undermine the Southern African Customs Union (SACU), South African Trade and Industry Minister Rob Davies said on 17 June.[xi] The South Africa Trade Minister, however, says the country is planning to set tariffs “on the basis of evidence, case by case”[xii] to prevent goods with easier rules of origin treatment or different import tariffs entering South Africa.[xiii] South Africa’s Department of Trade and Industry (DTI) says that the legal requirements under the EPA were, in many instances, inconsistent with the requirements of SACU and these issues regarding the way various members of SACU would comply with differing obligations to the EU now need to be addressed.[xiv] DTI international trade and economic development deputy director-general Xavier Carim emphasised that South Africa was not threatening the union or the region, however, it was important to “deal with the real issues that arise through legally binding agreements and how they relate to one another”. “How we manage the fact that we have different commitments to the EU, within a single customs union - that will be the difficulty and that is what we will have to address now,” said Carim. Carim also said SACU would also have to reassess the distribution of revenues from the customs revenue pool. Economist Matthew Stern, a director of Development Network Africa who previously worked at South Africa’s Treasury department, warned that the unshackling of Swaziland and Lesotho from South Africa would be a “catastrophe for these countries.”[xv] State revenue in both countries would be halved and the effect on growth, employment and poverty would be devastating.
Agreement on two declarations and a letter of confirmation from the European Commission outlining in detail the deal reached by chief negotiators after their discussions in Namibia on 10-12 March 2009 (texts agreed by parties on export taxes, infant industry, prohibition of quantitative restrictions, food security and free circulation) and referred to in those declarations, that will accompany the already agreed interim EPA text forms a firm commitment by all parties concerned to abide by and implement this deal were agreed on 27 April 2009.[xvi] The interim EPA and Southern African Customs Union tariff schedules will be aligned at the earliest opportunity through a joint decision of the interim EPA institutions.
In terms of other EPA negotiations, the European Commission says it stands by its commitment to offer the same deal to any other EPA region that wishes it, recognising that the choice of whether or not this is the right solution is theirs. From recent discussions it appears parties are likely to arrive at a solution tailored to each region and reflecting the variation in context, interim EPA content and status of full EPA negotiations.
Eastern and Southern Africa deciding between signing interim or full EPA
Officials attending a Common Market for Eastern and Southern Africa (COMESA) Summit emphasised the need for the ongoing negotiations on the EPA to support the development of the COMESA region and to deepen regional integration. Leaders directed negotiators to conclude the agreement by October 2009 on the basis of agreed issues.
The summit, which was held in Victoria Falls Town from 7-8 June under the theme “Consolidating Regional Economic Integration through Value Addition, Trade and Food Security,” also launched the COMESA customs union; however, more than half of the 14 free trade area (FTA) members opted out.[xvii] Thus far, approximately eight countries in the FTA have withheld their signatures stating that they are not yet ready.
Caribbean reviews EPA implementation status
Caribbean leaders meeting at the Conference of Heads of Government of CARICOM from 2-5 July adopted a communiqué in which they acknowledged that a number of important matters remain to be addressed as a consequence of provisional application of the Agreement from 29 December 2008. Leaders reviewed measures to be taken in relation to the establishment of institutions to manage the Agreement, particularly those that would facilitate an early meeting of the Joint Ministerial Council and the Joint Trade and Development Committee. Heads of Government agreed to intensify efforts to persuade the EU on the need for a smaller reduction of the MFN tariff for bananas and a longer transition period for its implementation. They also agreed to take concerted action at the highest political level of the EU, consistent with other ACP banana exporting countries, to obtain a flexible, front-loaded and speedily disbursed financial package that fully takes into account the losses in export earnings and adjustment costs that will be incurred by banana exporting countries.
In recent weeks, deepening rifts within Caricom have become apparent in the areas of migration, trade, implementation, and the status of inter-regional relationships, according to regional commentator David Jessop.[xviii] There is also growing concern at the highest levels about regional governments’ and regional institutions continued failure to implement in real time what is agreed.
Pacific optimistic on flexible EPA conclusion
Leaders expressed optimism over concluding an EPA at a Pacific ACP Trade Ministers Meeting, which was held from 15-16 June in Samoa.[xix] The meeting received an update on recent developments in the EPA negotiations from the lead Pacific EPA spokesperson, Associate Minister Hans Joachim Keil. Keil highlighted the outstanding contentious issues for Pacific countries that are preventing the conclusion of a comprehensive EPA. The ongoing commitment of all regions to concluding an EPA was maintained on the understanding that the outstanding issues would be resolved.
Pacific leaders agreed to renew efforts to conclude the EPA. Countries that had not yet participated were encouraged to submit their trade in goods offers for inclusion in the EPA, if possible prior to the next Joint Technical Working Group (JTWG) (date to be confirmed). Provisions are also to be drafted on certain trade-related areas for inclusion in the draft EPA for possible consideration at the next JTWG meeting.
Leaders also acknowledged the European Commission’s communiqué dated 8 June 2009 regarding further proposals on several outstanding issues and indications that the EC may be more flexible in interpreting WTO-compatible “substantially all trade” coverage definitions. The communiqué also suggested that the lead spokesperson respond to the EC Trade Commissioner reiterating the region’s position and proposed that a JTWG meeting be held in July 2009 with a view to resolving outstanding contentious issues.
[i] ACP-EU Council press conference, 29 May 2009, www.acpsec.org/en/89thcouncil/council09pressconference.html and report of the meeting: http://www.acp-eu-trade.org/library/library_detail.php?doc_language=en&library_detail_id=5049
[ii] ACP-EU Council press conference, 29 May 2009, www.acpsec.org/en/89thcouncil/council09pressconference.html and report of the meeting: http://www.acp-eu-trade.org/library/library_detail.php?doc_language=en&library_detail_id=5049
[iii] EU Council Conclusions on Aid for Trade, 18 May 2009 http://www.acp-eu-trade.org/library/library_detail.php?doc_language=en&library_detail_id=5042
[iv] EC Senior Central Africa EPA negotiators call for progress not to be rushed. Norman Girvan. March 2009.
www.normangirvan.info/epa-negotiations-should-not-be-rushed-ec/
[v] West Africa Summit Final Communique, 22 June 2009, http://www.sierraexpressmedia.com/articles3/id619.html
[vi] EU and West Africa move forward on regional Economic Partnership Agreement. 17 June 2009.
http://ec.europa.eu/trade/issues/bilateral/regions/acp/pr170609_en.htm
[vii] Nigeria sceptical of West African-EU EPA. Unlikely that EPA will be signed at the end of June 2009. Bilaterals.org. 1 May 2009. www.bilaterals.org/article.php3?id_article=15183 and Nigeria: Country rejects EPA. Bilaterals.org. 7 May 2009.
www.bilaterals.org/article.php3?id_article=15004
[viii] ECOWAS EPA Negotiating Ministers call for EU unequivocal commitment to funding EPA development programme, ECOWAS Press Release, 18 May 2009, news.ecowas.int/presseshow.php?nb=042&lang=en&annee=2009 and West Africa seeks EU legal commitment to EPA Development programme financing plan as pre-condition to signing EPA, allAfrica.com, 27 May 2009, allafrica.com/stories/200905200036.html
[ix] Economic Partnership Agreements: EU and Southern African countries sign interim deal. EC press release. 4 June 2009.
europa.eu/rapid/pressReleasesAction.do?reference=IP/09/873&format=HTML&aged=0&la… and Mozambique joins EU-SADC Interim EPA in Maputo. EPA Flash News, European Commission, 17 June 2009
http://www.acp-eu-trade.org/library/library_detail.php?doc_language=en&library_detail_id=5062
[x] SADC trade ministers meeting ends in EPA deadlock, with Angola, Namibia and South Africa still refusing to sign. The Namibian. 26 May 2009.
allafrica.com/stories/200905260416.html
[xi] SACU still a priority, says South African Minister. Tralac. 17 June 2009.
[xii] South Africa Trade Minister says the country planning to set tariffs “on the basis of evidence, case by case”, allAfrica.com, 11 June 2009, http://allafrica.com/stories/200906120030.html
[xiii] South Africa likely to increase border controls with SADC neighbours. Business Day (South Africa) via allAfrica.com. 5 June 2009. allafrica.com/stories/200906050027.html
[xiv] South Africa likely to increase border controls with SADC neighbours. Business Day (South Africa) via allAfrica.com. 5 June 2009. allafrica.com/stories/200906050027.html
[xv] Lesotho and Swaziland will need urgent assistance or face an unbearable economic shock if South Africa ends SACU revenue-sharing arrangement. Development Network Africa. 8 June 2009.
allafrica.com/stories/200906080012.html
[xvi] Final act to the interim agreement with a view to an Economic Partnership Agreement between the European Community and its Member States, of the one part, and the SADC EPA States, of the other part. http://register.consilium.europa.eu/pdf/en/08/st14/st14062-ad12co02.en08.pdf
See also: http://www.acp-eu-trade.org/index.php?loc=epa/agreements.php for all the legal EPA documents for SADC and other EPA regions
[xvii] COMESA countries opt out of customs union. Tralac. 15 June 2009.
[xviii] David Jessop says there is growing animosity between some Caricom member states and a failure to agree on how best to respond to the multiple inter-regional and external challenges that face the Caribbean. BBCCaribbean.com. 2 June 2009.
http://www.bbc.co.uk/caribbean/news/story/2009/06/090602_jessop_caribbean_regionalism.shtml
[xix] Pacific ACP Trade Ministers Meeting conclusions, 15-16 June 2009, http://www.forumsec.org/pages.cfm/newsroom/press-statements/2009/ministerial-statement-from-forum-trade-ministers-meeting.html
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