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EPA Update, GREAT insights, Volume 1, Issue 7 (September 2012)

01-09-2012

Dalleau, M. 2012. EPA Update. GREAT Insights, Volume 1, Issue 7. September 2012. Maastricht: ECDPM

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This section covers recent EPA developments in the EAC, Caribbean, Pacific and SADC regions. Stay tuned for coverage of negotiations in other regions. 

Southern African Development Community (SADC)

Experts continue discussions over market access issues 

Following the meeting of the SADC-EU EPA joint technical working group (TWG) on Market Access (24-25 May), and the joint SADC-EU EPA Senior Officials meeting that was held in Pretoria, South Africa from 29-30 May 2012, discussions continued over the summer to progress on the details of the EPA market access (MA) offer in goods. 

After a SADC EPA technical working group meeting on those issues, SADC and EU technical experts met in Johannesburg, South Africa, on 18 and 19th of July to discuss ways and means to progress in the MA negotiations, as well as “comfort measures” that could be integrated in the revised MA offer by the SADC EPA states. Despite some progress, notably following the presentation by the EC of comprehensive trade and production data aimed at informing decisions towards a potential agreement, major bottlenecks still remain to be addressed. 

Indeed, the details of the SADC EPA market access in agriculture continue to remain a serious topic of contention in the negotiations. The EU insists that the region should improve its offer on those goods where the region may be a net importer. Discussions seem to focus mainly on a few products of interest to both parties, i.e cereals, swine and bovine products, dairies and processed agricultural goods. As mentioned above, new supporting figures seem to have been presented by the EC in Johannesburg – data that the region will consider further to build their response and counter proposals. 

SADC member states, apparently willing to find areas of compromise, are now in the process of refining their positions that should be consolidated at the regional level, before submission to the EC in the course of September. South Africa’s inputs on where concessions could be made and “comfort measures” sought and Namibia’s stance on the important issue of derogation for tuna and right of first refusal will be critical. 

For information, contentious issues in the negotiations also include Non Agricultural Market Access (NAMA).; the last offer tabled by the countries of the Southern Africa Customs Union (SACU) having been judged insufficient by the EU(1) Similarly the issues of export taxes, agricultural safeguards, the so-called “new issues” (good governance in tax matters, and provisions related to “sustainable development”), and the question of Geographical Indications continue to oppose parties in the negotiations. The MFN clause also remains subject to controversy despite recent progress. 

Finally, rules of origins, notably cumulation, require major work in order to be finalised in a way agreeable to all parties. These should be addressed during a specific technical meeting on this subject in early September.

The next joint Senior Officials meeting is currently foreseen for the first week of October.

East African Community (EAC)

Further progress at technical level for finalisation of an agreement by year’s end

Following the 12th EPA negotiations session of the Technical Officials of the East African Community (EAC) and the EC that was held in Mombasa, Kenya from 8-12 May 2012, EAC and EU technical officials met in Brussels, Belgium from 9-13 July 2012 to address some of the remaining outstanding and contentious issues in EPA negotiations, and continue progressing towards the finalisation of an agreement, foreseen by the end of the year.

The Economic and Development chapter (EDC), polished during the Mombasa session, seems to have been finalised at technical level – a clear advancement that sources close to the negotiations want to interpret as a genuine sign of commitment. 
Similarly, considerable progress has been made on the joint Agriculture text, with agreement on Geographical Indications. The chapter would be close to completion, if it was not for the sensitive question of EU domestic support and export subsidies. It is worth recalling that the region, like many other EPA negotiating regions across Africa and the Pacific, has expressed its concerns about the potentially disruptive nature of EU subsidies on trade and agricultural production in the region. – a statement that the EU not only refutes, but also considers to be raising policy issues that should be dealt with at the multilateral level (2). It is worth recalling that the EU submitted revised texts on this question last April, addressing transparency in domestic support and including a commitment to discontinue export subsidies on liberalised products. However this offer is conditioned on the removal by the EAC on the text on “distortions”, all issues being presented as part of a “package”. The EU position is to be communicated to EAC Senior Officials for their consideration.

Despite the progress highlighted above, discussions over some of the ‘traditional’ contentious issues hit a snag: the questions of export taxes and the Most Favoured Nation (MFN) clause continue to remain unsettled and have been deferred to the Senior Officials level. In addition, according to our sources, the EU indicated it would like to see the EAC Market access offer reformatted to ease the implementation stage – a suggestion which rose some concerns among EAC technical officials, worried that such change could de facto alter the degree of liberalisation/exclusion of certain products.

Similarly less progress seems to have been achieved on the question of Rules of Origins (RoO): whilst new proposals, informed by prior internal/domestic consultations, have been submitted by the region on Annex II, those needs now to be further examined by the EU before further negotiations. Protocol 1 of the EPA rules of Origins was also discussed in details in Brussels, and while there seems to be some clear mutual agreement on most aspects of the text, some disagreements remain, for instance on the definition of “other ACP states” that the EU is proposing to replace with “other EPA states”, as well as Annex II pertaining to products originating in South Africa and excluded from cumulation. RoO for fisheries also remain unsettled. 

In the same vein, no agreement could be reached regarding new issues introduced by the EC in the negotiations, namely obligations/consequences arising from Customs Unions Agreements concluded with the EU, and the issue of good governance in the tax area (which according to sources close to the negotiations should cover, inter alia, issues of transparency, exchange of information and “fair tax competition”), the EAC being in the process of holding internal consultations. Likewise, the EAC informed its EC counterpart of its will to undertake consultations on provisions related to “Trade, Environment and Sustainable Development”, insisting on this question to be negotiated with other Trade-Related Issues as part of the Rendez-Vous Clause, whose timeframe remains to be jointly defined.

Finally, on Dispute Settlement (DS), Institutional Arrangements, and Final Provisions, whilst most of the text seems to be consensual among the parties, experts in Brussels failed to reach agreement on the non-execution clause, the type of dialogue and cooperation to be handled in the framework of the EPA Consultative Committee, as well as the question of whether issues related to the financing for development cooperation should fall within the scope of DS, deferring those therefore to Senior Officials. A few additional issues (eg. instances where the EPA Council could amend some parts of the agreement, rules of procedures and code of conduct for arbitrations, …) should moreover be the focus of more discussions in upcoming negotiating sessions. 

Expert meetings have therefore been planned in Brussels in the 3rd week of September to address RoO as well as outstanding issues related to the Institutional Arrangements, Dispute Settlements and Final Provisions. Depending on the progress made at this occasion, Senior Officials from both parties should meet in Mid October in the EAC region. 

Caribbean

Coordination and Networking Meeting of CARIFORUM EPA functionaries convened ahead of the Joint CARIFORUM-EU Trade and Development Committee

A preparatory meeting of CARIFORUM EPA National coordinators and Heads of EPA National EPA Implementation Units was held from 2 to 3 August in Santo Domingo, 
Dominican Republic(3). This meeting allowed all actors that have a stake in EPA implementation to report on their activities and progress, as well as to share the main challenges encountered when it comes to actual implementation of commitments. 

The questions of financial support for implementation was also addressed during this meeting held incidentally at a critical moment in time (4). It was indeed a good opportunity to draw attention on the different 10th EDF-funded programmes aimed at supporting CARIFORUM States in their implementation endeavours at a time where the EPA Standby Facility (5)  is about to be officially launched. It also represented the chance to discuss possible items to be put on the agenda of the 2nd meeting of the CARIFORUM-EU Trade and Development Committee (TDC), currently foreseen on 27 September in Port-of-Spain, Trinidad and Tobago. The TDC should be followed by a meeting of the Joint CARIFORUM-EU Council (highest institution in the context of the EPA) – meeting tentatively scheduled on 26 October, in Brussels. 

Pacific

PACP Leaders meet in the margins of the Pacific Islands Forum

The 43rd Pacific Islands Forum was convened in Rarotonga, Cook Islands from 28 to 30 August 2012. The Pacific-EU EPA was among the topic discussed in the margins of the Forum, with Pacific ACP (PACP) leaders calling on the EU to show flexibility in the negotiations in views of the vulnerabilities of PACP countries. They also insisted on the importance of regional agreements among Forum island countries to ensure that Pacific economies are well-equipped to engage under the EPA with the EU (6) .

In Rarotonga, PACP leaders shared their will to convene a special PACP Leaders Meeting, where they would express their “final determination on the signing of the comprehensive EPA” (7) , in line with the statement of Secretary General of the Pacific Islands Forum Secretariat, Tuiloma Neroni Slade who insisted in his Opening Remarks that EPA “be concluded this year in accordance with Leaders’ directives(8)  ”. 

The next negotiation of the PACP-EU EPA could be held at technical level on 1-5 October 2012 to address some of the remaining outstanding and contentious issues in the negotiations. These joint technical working groups should ideally be followed by a joint negotiations. These joint technical working groups should ideally be followed by a joint ministerial meeting aimed at providing further directions for the successful conclusion of the EPA. 

Melissa Dalleau is Policy Officer Trade and Economic Governance at ECDPM. 

Footnotes
1. As a result, it is worth noting that the EU is currently arguing for the issue to be left out of the table of negotiations for the time being – a position not shared by the region.
2. See Which way forward in EPA negotiations? Seeking political leadership to address bottlenecks for more information. ECDPM Discussion Paper 100. Produced in cooperation with International Lawyers and Economists Against Poverty (iLEAP). Maastricht: European Centre for Development Policy Management. 
3. CARICOM Secretariat (2012). EPA Implementation Bulletin. Vol 2. No 4. July/August 2012.
4. The EPA Standing Facility is a €3.5M flexible capacity-building initiative, administered by the CDB and financed under the 10th EU EDF, that aims at supporting national entities/agencies in charge of EPA implementation in implementing commitments under the Agreement. See for more information: St Hillaire (2012) The EPA Standby Facility under the 10th EDF Programme of Support for EPA implementation in Cariforum. EPA Implementation Bulletin. Vol 2. No 4. July/August 2012.
5. PIFS Press Release. PACP Leaders encouraged to conclude EPA negotiations. Press Release (105/12) 28th August 2012 
6. PACP Leaders urge EU to show flexibility in EPA negotiations. PIFS Press Release (106/12). 29 August 2012
7. PIFS Press Release. PACP Leaders encouraged to conclude EPA negotiations. Press Release (105/12) 28th August 2012
8. PACP Leaders urge EU to show flexibility in EPA negotiations. PIFS Press Release (106/12). 29 August 2012

This article was published in Great Insights Volume 1, Issue 7 (September 2012)

 

Economic Transformation and TradeEconomic Partnership Agreements (EPAs)CaribbeanEast AfricaPacificSouth Africa

External authors

Melissa Dalleau