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EPA Update, GREAT insights, Volume 1, Issue 10 (December 2012)

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ACP-EU Joint Parliamentary Assembly meets in Paramaribo

The 24th ACP-EU Joint Parliamentary Assembly (JPA) took place in Paramaribo, Suriname, at the end of the month of November. On trade issues, Dr. Mohamed Ibn Chambas, Secretary General of the ACP Group, declared that the CARIFORUM-EU EPA could be used as “a model for other ACP regions”, but warned that “ if there are too many difficulties in implementing the CARIFORUM EPA – well, it could either discourage or encourage the other regions”. 

The JPA Co-Chair, Hon. Musikari Kombo from Kenya questioned if the “obsession” of EU negotiators on “a narrow liberalization agenda which focused only on trade aspects, including issues that definitely inimical to the development aspirations of ACP States”, was not one of the reasons why EPA negotiations have dragged on. Peter Thompson, Director of Trade and Development Policy at DG Trade, for his part reminded the audience that the institutions in charge of implementing and overseeing the agreement were in the process of being implemented, and that the EPAs were no “magic pill” for development (1). 

Additionally, with the “Banana Dispute” coming to an end at the WTO, Rabin Parmessar, the Surinamese representative at the JPA, voiced concerns over the disbursement of funds under the “Banana Accompanying Measures”, an aid program designed to cushion the erosion of ACP preferences for banana exports (2). 

African Union Trade Ministers Meeting Issue Declaration on EPAs

In a veiled reference to the amendment of MAR 1528 governing Market Access to the EU for Interim EPA countries, whose exact cut-off date for implementation and ratification of Interim EPAs is still under discussions in Brussels (see our previous EPA updates on the issue), the Trade Ministers of the African Union called during their meeting in Addis Ababa for EPA negotiations to be “substance-based and not time-based”. The declaration, issued on November 30th at the end of a four day long Joint Conference of the African Union Ministers of Agriculture and Trade, further stated that the aforementioned regulation needs to “remain unchanged” until development oriented EPAs were in sight, and that “high level political dialogue” was needed to “persuade the EU to take into account African concerns”. 

West Africa: EPA negotiations on hold, region conducts crucial talks on Common External Tariff

EU negotiators have not met their West African counterparts since last April. A meeting was foreseen in Accra in June, but it has still not taken place. The most immediate hurdle in the negotiations appears to be in, inter alia, Market Access (MA) issues. 

As far as we know, two specific issues appeared particularly problematic in the MA discussions last April: the percentage of liberalization of the West African market that negotiations should aim at, and the level of detail in the statistical basis to be used during these negotiations. On the latter, the region continues to argue for negotiations to take place at the 10-digit level of the Harmonized Commodity Description (HS) and Coding System, while the EC argues that they should take place at the HS 6 level of aggregation. An HS 10 negotiation would guarantee consistency with the region’s nascent Common External Tariff (CET), but the EC argues that the HS 6 level is the level usually used in international negotiations since it is harmonized internationally. The region is planning on holding consultations in February. 

Meanwhile, the region is currently holding the 12th round of talks between the West African Economic and Monetary Union (WAEMU, more commonly know by its French acronym, UEMOA) and ECOWAS states on the region’s Common External Tariff (CET). The CET is the precondition for achieving the region’s planned customs union, and, ultimately, a common market. WAEMU states already have a CET implemented; the negotiations therefore take place between the WAEMU block and other ECOWAS states. 

The CET is organized around five tariff bands (0, 5, 10, 20 and 35%) into which goods are classified. The challenge lies in determining what good goes into which band given that, the current country rates differ widely in some cases amongst countries in the region. 

The CET, by now almost finalized for the exception of a few keys goods, has been submitted to the WTO and the World Customs Organization (WCO). Problems with individual country commitments at the WTO are foreseen since, in some cases, the reclassification of goods into higher bands means that countries will have tariffs levels above their bound WTO rates. Yet, in a recent article published by the International Center for Trade and Sustainable Development (ICTSD), El Hadji Abdourahmane Diouf, Director of Agence Africaine pour le commerce et le développement, argues that legal solutions to the problem are within reach under WTO law (3). 

The outcome of this meeting, currently ongoing until Friday, December 14th, will feed into ECOWAS’s decision making bodies, which will meet to review the matter in the first half of 2013 (4). 

SADC EPA negotiations: SADC tables additional agricultural goods

After having been delayed, the EU-SADC technical working group on Market Access and Senior Officials met from December 3rd to December 7th in Johannesburg. Readers will recall that this meeting was delayed in order for SADC to refine and consolidate its agricultural Market Access (MA) offer at the regional level, after the EU had judged its initial offer tabled in insufficient. 

A number of agricultural tariff lines were added to SADC’s proposal, after arduous regional consultations. It seems that both sides are confident that the latest SADC agricultural offer and the EU’s earlier “minimum request” provide a solid basis for further negotiations. Indeed, some of the goods added by the region in its offer overlap with the EU’s earlier request. Additionally, the region reportedly agreed to negotiate a deal on Geographical Indications (GIs), a longstanding EU demand. 

Nevertheless, the region’s offer does come with fine print. The exact nature of concessions to be made still has to be determined: neither the Tariff Rate Quotas nor the preference margins to be provided for these goods are explicitly spelled out. Furthermore, the offer is conditioned on several points: no export subsidies or refunds, seasonal access, exclusion from the standstill clause and the possibility of adding specific “comfort measures”. With this in mind, the SADC offer should be refined during regional internal meetings in February 2013, after which it will be negotiated with the EU in March and “finalized”. 

With regards to Rules of Origin (RoOs), cumulation appears to remain problematic, despite some progress. Seniors Officials came to an agreement that user-friendliness, the risk of circumvention and clear timeframe and targets for the reduction of goods in the exclusion list should guide future efforts. The addition of a clause in the agreement aiming to review the exclusion list after a number of years is an option. With regards to Rules of Origin in fisheries, the EU has yet to respond to the region’s clarifications. It should do so before the end of the year. 

Quentin de Roquefeuil is Policy Officer in the Economic Governance and Trade and Regional Integration Programmes at ECDPM

Footnotes
1. http://www.acp.int/content/all-eyes-cariforum-epa-benchmark
2. http://www.caribbean360.com/index.php/news/638506.html#axzz2EpZtdBIh 
3. See West Africa’s new common external tariff and the individual WTO commitments of ECOWAS member states: No insurmountable incompatibilities, available at http://ictsd.org/downloads/bridges-africa-review/1-5.pdf
4. http://appablog.wordpress.com/2012/12/10/vers-ladoption-du-tarif-exterieur-commun-de-la-cedeao/ 

This article was published in Great Insights Volume 1, Issue 10 (December 2012)

 

African institutionsEconomic Transformation and TradeAfrican Union (AU)Economic Partnership Agreements (EPAs)AfricaCaribbeanSouthern AfricaWest Africa