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Efforts underway to unblock Central Africa’s stalled EPA negotiations
Discussions on how to re-launch stalled Central Africa-EU EPA negotiations were held at a high level EC- Economic and Monetary Community of Central Africa (CEMAC) seminar on the finalisation of the European Development Fund’s 10th regional cooperation strategy and indicative programme. The meeting took place from 30 September to 1 October in Brussels.
At an earlier meeting, CEMAC experts met in Douala, Cameroon from 15-17 September to discuss ways of strengthening the trade expertise and capacities of the CEMAC Commission to improve the formulation and implementation of trade policies at national and regional levels. The initiative is aimed at increasing the competitiveness of its exports and strengthening participation in international trade negotiations[i]. Notably, discussions focused on how EPAs could be used to further integrate the region into the sub-regional and international economies. Participants considered a study by the African Capacity Building Foundation, which says there is a lack of capacity in member states to apply WTO rules and finds that the volume of CEMAC exports is only 0.28 percent of overall trade volumes per year. Results could be improved with better organisation of the regional economy and a focus on good governance, the study says.
West Africa EPA deadline to be further extended
The October 2009 deadline to conclude West African-EU EPA negotiations has been further extended following the latest round of expert and senior official level negotiations held in Brussels from 21-25 September. Negotiators focused on the numerous remaining points of divergence in the draft joint EPA text. There was some convergence of views on the EPA Development Programme, with the two parties agreeing that the EC will absorb the net fiscal impact of the EPA in conjunction with pertinent fiscal reforms in the region. A compromise was also agreed which will allow West Africa to take appropriate measures if complaints on implementation of EU support taken to the Joint EPA Council are not addressed within six months. The EC, however, rejected West Africa’s proposal to establish a specific legal link in the EPA text between the implementation of EPA trade liberalisation commitments and the provision of EU support for improvements in competitiveness and productive capacities, but agreed to examine the synergy between these. West Africa is seeking the possibility to temporarily postpone trade liberalisation in order to collect regional levies if EU development support has not materialised. The EC, however, says this would not be WTO-compatible and would, therefore, remove the legal certainty of the EPA. A joint legal study will be undertaken to determine appropriate wording for the text of the agreement. West Africa also proposed a new formulation where the EC and its Member States are committed to providing “the financing necessary” (instead of “additional financing”) to the implementation of the development dimension of the EPA.
West Africa proposed the establishment of a legal assistance fund to support its LDC Member States in dispute settlement. The EC did not accept this proposal and insists that this assistance must come from within the normal framework of development co-operation. West Africa also proposed to include a peace clause of 10 years in which the parties renounce dispute settlement rules and prioritise consultation and arrangement.
West Africa accepted the inclusion of the MFN clause in the EPA, but only if it is applied to Europe in accordance to WTO rules, thus rejecting the EC proposal to introduce the notion of “major trade partner.”
West Africa also proposed an article calling for the elimination of market distorting EU agricultural subsidies in the specific framework of the EPA. The EC maintains that this is an issue to be dealt with at the WTO level.
West Africa submitted a revised market access goods offer which maintains the 60-70 percent opening, but re-categorises products. The EC says the offer could be further improved due to the nature and the low importance of the trade between the two areas, the international context, questions of competitiveness, and the goods being sought.
Because the October deadline cannot be met, the ministerial meeting scheduled to be held in Bamako, Mali from 19-20 October has been postponed to a later date.
East and Southern Africa (ESA)-EC agree to harmonise EDF programmes
European Development Fund (EDF) programmes in the Eastern and Southern Africa and the Indian Ocean (ESA-IO) regions will be harmonised in order to improve aid effectiveness in support of regionally owned strategies and to ensure coherence between regional and national policies. The Joint High level ESA-IO-EC declaration was adopted following a meeting of Ministers and NAOs of the Member States of the Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC), Intergovernmental Authority on Development in Eastern Africa (IGAD) and Indian Ocean Commission (IOC), and the high officials from European Commission which was held from 14-15 September.[ii]
The declaration states that the Regional Organisation of the ESA-IO will, through the inter-regional coordination committee (IRCC), present a concrete schedule of the priority actions to be taken to implement the regional indicative programme, identifying concrete needs for regional integration and cooperation, including EPA related issues to the EC by the end of November 2009. It was also agreed to set up an IRCC Aid Effectiveness Task Force to intensify and structure the ongoing work on aid delivery instruments specifically targeted towards support for regional integration. The declaration also stated that the parties recognised that the Joint Africa-EU Strategy continues to be the broad overall framework for the cooperation between Africa and the EU.
RECs will participate in the proposed ’Resource Seminar‘ that has been scheduled for 5-6 October in Addis Ababa, Ethiopia to clarify and assess the issue of financial needs and resources.
The Common Market for Eastern and Southern Africa (COMESA) held the First meeting of the Committee on Trade in Services in Victoria Falls, Zimbabwe on 1-4 September 2009. The objectives of the meeting were to adopt the rules of procedure of the Committee, to consider and adopt the negotiating guidelines on Trade in Services, to map out a road map for the negotiations, and to consider other pertinent issues relating to the initiation and conduct of the negotiations.
The meeting adopted its Rules of Procedure which provide for the composition of the committee, the conduct of meetings of the Committee and other matters incidental thereto. The meeting also adopted the guidelines for the negotiation of trade in services which would guide countries in the preparation of schedules for specific commitments and operationalisation of the regulations on trade in services. In addition, the meeting agreed on an indicative list of priority services sectors in which each member state is expected to make commitments. These indicative sectors will be confirmed once member states complete national consultations by the middle of December 2009. The indicative priority sectors which have been identified due to their central infrastructural functions and their role in the competitiveness of economies are: financial, communication, business, transport, tourism, energy and construction, and related engineering services. A roadmap was adopted according to which the Committee would convene in May 2010 to commence services negotiations after countries have prepared their requests and offers.[iii]
EAC likely to request extension to EPA deadline
The East African Community (EAC) is expected to request an extension of the envisaged deadline for completing framework EPA negotiations with the EC to complete pending work – which is reportedly still enormous – following regional meetings held in September 2009 at the experts, senior, and ministerial levels. The EAC region is contemplating signing the framework EPA as soon as they agree with the EC on the way forward regarding contentious/outstanding issues (MFN, export taxes, issues of translation of the market access offer/tariff schedules, development cooperation, etc).
Ways and means of improving trade facilitation along the Northern Corridor is the focus of a meeting of the Northern Transit Transport Corridor Authority, EAC, the Kenya Ports Authority, and the East African Business Council that was held from 30 September to 1 October in Nairobi, Kenya. A similar meeting will be held in Tanzania next year to examine the challenges of the central corridor. The aim in both cases is to determine the structural changes to be effected with particular focus on how to replicate the COMESA-EAC-SADC North-South Corridor aid for trade pilot projects in the northern and central corridors in the EAC region.[iv]
Consultations on the establishment of the East African Monetary Union (EAMU) were held in EAC Member States from 7-25 September to inform the EAC Secretariat’s study on the proposed EAC monetary union. The study is expected to be finalised later this month.[v]
Despite a decade of economic reforms and efforts to harmonise regional trade policies, the East African region is still plagued by non-tariff barriers (NTBs) to interstate trade, which countries have used to advance domestic protectionist policies, which make the EAC unable to reap benefits from regional trade, according to a study commissioned by the Makerere University-based Economic Policy Research Centre.[vi]
Tanzania hinted it may moderate objections that have stalled full integration of the five-nation East African Community (EAC) bloc. “I’m aware there are a few doubts here and there but these should not stop us from moving forward,” said Tanzanian Prime Minister Mizengo Pinda on a visit to the Kenyan bourse. “These problems will be sorted out.”[vii]
SADC-EC EPA negotiations postponed
The Southern African Development Community (SADC)-EC EPA negotiations scheduled for the first week of October 2009 in Brussels have been postponed to allow SADC more time to prepare. Following the signing of the interim EPA by four of the SADC EPA States in June 2009, a lot of mudslinging has taken place – especially amongst SACU Member States.
SADC EPA technical officials met on several occasions in September 2009 to continue with the technical work on market access, the unresolved negotiating issues (previously called ANSA concerns) and services and investment. Part of this technical work included a workshop to consider what needs to be done with respect to the alignment between the IEPA market access provisions and the provisions contained in the SA-EU TDCA, as proposed by the EC. This is necessary to ensure the integrity of the SACU Common External Tariff. Substantial progress was made. However, it was realised that the alignment has to extend to the rules of origin as well. Differing rules of origin could still lead to a circumvention of tariffs, especially where such rules are more lenient in one agreement than in the other. Although the technical work in this area is making progress, it is still not clear whether South Africa actually agrees to such a step. They have not made any commitment in this regard. This will show the extent to which they are actually committed to maintaining the unity of SACU and, for that matter, the SADC EPA Group.
SACU Trade and Finance Ministers agreed to redouble their collective efforts to resolve the outstanding issues in the SADC-EC Interim EPA and Final Economic Partnership Agreement (EPA) negotiations at a special Council meeting on 17 September in Ezulwini, Swaziland. Ministers directed the SACU Commission to develop a common SACU vision, strategy, and work-plan with timelines in respect to priority areas including strengthening capacity in the secretariat and developing the necessary policies and procedures to conclude the establishment of institutions.
South Africa and the EC discussed the implications of EPA negotiations, at all its stages, on current processes of regional integration in Southern Africa at their Summit meeting on 11 September. The two sides agreed to urgently pursue the negotiation and resolution of all outstanding issues with a view to a prompt and mutually satisfactory conclusion that supports regional integration and development in Southern Africa.
South Africa’s deputy director-general for trade and industry, Xavier Carim, has sought to place the current dispute with the EU over specific provisions in the IEPAs in a much wider policy framework. Addressing the SADC Southern African Forum on Trade in mid-September, Carim highlighted the fact that EPAs in their current form “limit the SADC region’s policy space to promote industrial and agricultural development, would hamper efforts to promote trade diversification, and would undermine regional integration processes.” However, he reiterated South Africa’s commitment to “addressing these issues with the EU and other members in the SADC and the Southern African Customs Union.” For this to happen, however, it was held that the EC needed to move beyond “broad declaratory statements” to address the “detailed outcomes of the negotiating processes.”
Trudi Hartzenberg of Tralac, however, notes that there are only 53 goods lines which include tariff differences between the South Africa-EU Trade, Development and Cooperation Agreement and the EPA. “This is such a red herring,” she said.
The SADC Ministerial Task Force on Regional Economic Integration was urged to ensure that outstanding EPA issues are effectively addressed following a SADC Summit held in Kinshasa, Democratic Republic of the Congo on 7-8 September. Leaders also noted that the Task Force will meet in a Strategic Forum before the end of 2009 to further examine the regional economic integration agenda. The summit also signed a Memorandum of Understanding on Regional Cooperation and Integration among the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC).
It is of importance to the agricultural value chain that the integrity of the SACU is maintained and a satisfactory conclusion to the IEPA negotiations achieved, according to a statement by the Joint President’s Committee, comprising the Namibia National Farmers Union, Namibia Agricultural Union and Namibia Emerging Commercial Farmers Union to the Namibian Minster of Trade and Industry adopted on 8 September. The statement sets out the detailed impact on key industries. The organisations do not think the EU will increase tariffs on Namibia as long as they are negotiating the EPA.
Caribbean
CORRECTION: Early electronic versions of the September issue of TNI erroneously stated that Barbados is finalising its EPA services offer. It is not Barbados, but the Bahamas which is to complete its services offer. Our apologies.
Implementation of Caribbean agriculture decisions need to be pursued vigorously as time is not on the side of the region, according to the conclusions of the Special Meeting of the Caribbean Community (CARICOM) Council for Trade and Economic Development (COTED) on Agriculture held in Guyana on 18 September. Systems need to be established to assist with dealing with constraints and to identify bottlenecks to implementation and the necessary action that needs to be taken, the Special Meeting concluded.
The CARICOM Development Fund commenced full operations on 24 August. The fund will provide technical and financial assistance to disadvantaged countries, regions, and sectors and will promote business development, among other areas. The economic integration process will determine the priority allocations in the form of loans, grants, and interest subsidy grants.
Pacific
A Joint Technical Working Group (JTWG) Meeting between the Pacific ACP (PACP) Trade and Legal Officials, European Commission Officials, and senior officials was held in Brussels from 23 September to 3 October. The objective of the meeting was to advance discussions on a range of technical issues relating to a comprehensive EPA between the PACP region and the EU. Officials sought to resolve outstanding issues so that the EU and the region can move forward as soon as possible to the task of actually building the partnership through a comprehensive EPA. The resolution of a range of important outstanding issues – including export taxes, infant industry provisions, and Most-Favoured-Nation provisions that will constrain these negotiations, the non-execution clause and inclusion in the EPA of duty-free access for fisheries products (including quota-free access and improved rules of origin for fresh chilled and frozen fish) – were being discussed at the meeting as we went to press. The officials also discussed the market access offers, conditional on the resolution of a number of issues under the trade in goods component of the EPA that some of the PACP states have made. PACP trade officials will report back to PACP trade ministers at their next meeting.
At least four countries from the region have shown a renewed interest in negotiating an EPA with the EU, tabling goods offers at the JTWG negotiations. Indications are that the PACP countries are continuing to lobby the EC as a regional grouping for a comprehensive EPA that contains a rendezvous clause for negotiating trade in services, investment rules, and other trade-related measures. They are also lobbying to see improvements in the provisions relating to trade in goods that have been included in Papua New Guinea’s interim EPA (removal of MFN provisions, improvement of the infant industry rules, removal of restrictions on export taxes and quotas, more flexibility in the definition of ‘substantially all trade’, improved Rules of Origin for fisheries, etc.).
PACER Plus trade negotiations between the Pacific, Australia and New Zealand were triggered as a consequence of Forum Island countries concluding the interim EPA agreement with the EU.
New Zealand will contribute NZ$1.95 million toward the establishment of the Office of Chief Trade Advisor (OCTA) to support Forum Island Countries’ preparations for, and participation in, PACER Plus. To ensure the independence of OCTA’s advice and assistance to Forum Island Countries, it will operate separately from the Forum Secretariat with a Board of Governors made up of Forum Island Country representatives. OCTA will provide Forum Island Countries the technical assistance necessary to support their engagement in PACER Plus-related activities and negotiations. Its four key functions are advice and facilitation of capacity building, coordination, facilitation and representation.
Melissa Julian is Knowledge Management Officer with ECDPM.
Sources:
Cameroun-CEMAC-Exportations, Agence de Press Africaine, 17 September 2009
http://www.apanews.net/apa.php?page=article&id_article=107002 and Commerce: L’Afrique Centrale se mobilise en vue d’améliorer ses échanges commerciaux, Gabon Echo, 18 September 2009, http://www.gaboneco.com/show_article.php?IDActu=14977
Joint High level ESA-IO-EC declaration http://europafrica.net/2009/09/18/lusaka-declaration-on-the-high-level-meeting-of-the-eastern-and-southern-africa-%E2%80%93-indian-ocean-esa-io-region-and-the-european-commission-jaes-on-the-agenda/
COMESA Holds 1st meeting of the Committee on Trade in Services. Victoria Falls Town. 1-4 September 2009.
http://www.comesa.int/lang-en/component/content/article/34-general-news/242-press-release-comesa-holds-1st-meeting-of-the-committee-on-trade-in-services
Regional trade costs in EAC still high. Daily Nation, Nairobi via Tralac.16 September 2009.
http://www.tralac.org/cgi-bin/giga.cgi?cmd=cause_dir_news_item&cause_id=1694&news_id=74024&cat_id=1026
EAC Begins Consulting on Region’s Monetary Union. allAfrica.com. 9 September 2009.
http://allafrica.com/stories/200909090344.html and East Africa: Region to Have a Common Currency By 2012. alAfrica.com. September 2009.
allafrica.com/stories/200909210008.html
Non-tariff barriers still a hurdle in the East African Community (EAC). Monitor Online, Kampala. 8 September 2009.
http://www.tralac.org/cgi-bin/giga.cgi?cmd=cause_dir_news_item&cause_id=1694&news_id=73517&cat_id=1026
Tanzania sees end to regional integration problems. Reuters. 3 September 2009.
http://af.reuters.com/article/topNews/idAFJOE5820EY20090903
SACU Council of Ministers. Outcomes. SACU. 17 September 2009.
www.sacu.int/docs/pr/2009/pr0917.pdf
South Africa-European Union Summit. Joint Statement. 11 September 2009
www.consilium.europa.eu//uedocs/cms_data/docs/pressdata/en/er/110057.pdf
SADC difficulties over the signing of the EPA with the EU seemed to have subsided. Tralac. 22 September 2009.
http://www.tralac.org/cgi-bin/giga.cgi?cmd=cause_dir_news_item&cause_id=1694&news_id=74393&cat_id=1026
29th Southern African Development Community Summit. Towards a common future. DRC. 2-8 September 2009.
http://www.sadc.int/summit
Caribbean Council for Trade and Economic Development meeting focuses on agriculture. 18 September 2009.
www.caricom.org/jsp/communications/32coted.jsp
The CARICOM Development Fund commenced full operations on 24 August 2009
http://www.caricom.org/jsp/pressreleases/pres321_09.jsp
Working Group Meeting between the Pacific ACP-EC http://www.forumsec.org/pages.cfm/newsroom/press-statements/2009/pacp-ec-officials-discuss-epa-.html
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