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EPA Update, GREAT Insights, Volume 1, Issue 5 (July 2012)

July 2012

Dalleau, M. 2012. EPA Update. GREAT Insights, Volume 1, Issue 5. July 2012. Maastricht: ECDPM.

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This month, this section covers recent EPA developments that occurred over the past month in the East African Community (EAC), the Eastern and Southern African (ESA) and the Pacific regions. It also reports on the outcomes of the recent EPA negotiations Coordination Meeting organised by the African Union. For the state of play of negotiations in other regions, please read our previous issues and do not miss our forthcoming updates in these pages!

All ACP

95th session of the ACP Council of Ministers adopts resolution on EPA
ACP Council of Ministers met in Port Vila, Vanuatu, from 10-15 June in preparation 37th session of the ACP-EU Council of Ministers, which was held subsequently. This was an opportunity for ACP Ministers to discuss and take joint positions on various areas of common interests. Among other things were the request by the Republic of South Sudan to accede the Cotonou Partnership Agreement discussed and agreed upon (1).

Economic Partnership Agreements featured high on the agenda as well, and a Resolution was adopted, which strongly condemned the proposal of the European Commission to amend the EPA Market Access Regulation (MAR) 1528/2007. The amendment of the MAR 1528/2007 permits the EU to exclude countries from its remit that have not taken the necessary steps to ratify and implement their EPA agreement as from 1st January 2014, calling “on the EU to lower its ambitions and consider seriously the level of economic development of its ACP negotiating partners” (2).

Members of the European Parliament argue in favour of a 2 year extension on the “EPA deadline”
The condemnations of some of the ACP countries seem to have been partly heard by the European Parliament (EP). The long awaited decision of the International Trade Committee (INTA) of the EP on the European Commission (EC) proposal on MAR 1528/2007 has finally been taken. Members of the INTA committee (3) argued that ACP countries would indeed need more time to prepare for an EPA and to finalise their agreement in good conditions. They therefore voted for the extension of the 2014 deadline up until 2016. This represents obviously a positive, yet moderate step in the eyes of some African stakeholders who may have wished for the complete rejection of the Commission proposal, as suggested by the EP Committee on Development (4).

It is worth recalling that according to this legislative proposal, if countries want to continue to benefit from EPA market access, either they have to sign and start the ratification of their existing EPA or conclude a new regional EPA. If none of these steps are taken, countries will either fall under one of the schemes of the new GSP (i.e. Everything but Arms, Standard GSP or GSP Plus) or they will have no preferences (as might be the case for Botswana and Namibia) (5). Whether or not the two-years extension will make a tremendous difference will obviously depend on the pace of the negotiations across regions.

West Africa

Preparatory discussion on Market Access prior to joint technical level meeting
Following the West Africa-EU technical and senior officials’ round of negotiations that was held from 17-25 April in Brussels, no joint EPA meeting has been convened in order to leave the time for the region to hold consultations on the various contentious issues that continue to prevent the parties to reach a full regional agreement, in which the question of market access is central. In this respect, it is worth recalling that issues of the joint statistical basis behind the offer, the new categorization of specific tariff lines (and the analysis that underpinned the categorization), as well as the level of tariff classification that should be considered for this offer (HS6 vs HS10), continue to be the subject of heated debates. With this in mind, the West African region recently held a regional meeting, in preparation of the Joint West Africa-EU technical market access meeting, currently foreseen in July.
UEMOA and ECOWAS Presidents met with EC Commissioners for Trade and Development to explore issues of common interest.

In addition, and beyond the framework of the formal/usual negotiating sessions, the presidents of the ECOWAS and UEMOA Commissions met on 18 June with the EC Commissioner for Trade, Karel de Gucht, and for Development, Andris Piebalgs, to discuss, among other things, the EPA, and to explore mutually agreeable solutions(6). More flexibility from the EU side, notably on the question of market access, was among the strongest requests of the Presidents of the two WA sub-regional organisations. Technical experts were also invited by all parties to re-examine questions linked to the statistical basis behind the offer and present the outcome of their discussions to the Chief Negotiators.

Equally important, the newly appointed presidents of the two sub-regional Commissions urged the EU to ensure that sufficient resources will be committed to address adjustment costs deriving from the EPA, not least in the context of the EPA Development Programme (EPADP). They also expressed their concerns and disagreement over the recent proposal by the European Commission to amend the EPA Market Access Regulation (MAR) 1528/2007 arguing that this could disrupt the regional integration processes in West Africa, should some countries (eg. Ghana/Cote d’Ivoire) decide to implement an interim EPA on their own (i.e outside the regional framework). Commitments from all parties to try and reach a full regional EPA appear indeed critical to safeguard the integrity of regional integration processes in the region. In particular since Ghana, even though still committed to the establishment of a full regional agreement, was quoted in the press as being ready to take “steps to protect [its] economic interest if the ECOWAS platform for the full EPA failed to reach a consensus within the stipulated time-frame (7)”.

West Africa progresses on the possible implementation of the Regional EPA Fund (FRAPE)
In the context of the EPA and the implementation of the related EPA Development Programme (EPADP), it is worth recalling that the region originally foresaw the creation of a Regional EPA Fund (FRAPE) to finance the EPADP. This was based on a decision of the West African Ministerial Monitoring Committee (MMC) in Niamey in November 2006, which was confirmed by Chief Negotiators of both parties in February 2007.

A study on the operationalisation of the fund was carried out for ECOWAS, UEMOA and the EC by a team of consultants in summer 2007 (8). The study made proposals concerning the specific objectives, intervention areas, beneficiaries and contributions to the fund and identified different options in terms of the institutional home of the FRAPE. GREAT insights has been informed that the elements regarding the institutional home of the FRAPE have recently been approved by the Presidents of the ECOWAS and UEMOA Commissions, and that a decision has been made on FRAPE’s institutional anchorage with the ECOWAS Bank for Investment and Development (BIDC) or West African Development Bank (BOAD – Banque Ouest Africaine de Developpement).

When it comes to the practical modalities of implementation of the Fund, the West African EPA negotiating sub-group, responsible for the elaboration of the legal and organizational framework for the FRAPE, has communicated last year the results of its work to the Ministerial Monitoring Committee MMC. The MMC subsequently called on the ECOWAS and UEMOA Commissions to finalize the implementation of the FRAPE before October 2012. The draft Framework Document on the FRAPE (Document-cadre) should be finalized in Dakar from 11-13 July 2012 during a meeting on the subject, organized by the ECOWAS Commission.

Southern African Development Community (SADC)

SADC-EU Senior Officials met in May to continue discussions on EPAs
Following a meeting of the SADC-EU EPA joint technical working group (TWG) on Market Access (24-25 May), SADC and EU EPA Senior Officials met from 29-30 May 2012 in Pretoria, South Africa, to discuss the remaining contentious and outstanding issues that continue to hamper the pace of the negotiations towards a full regional agreement. Whilst some progress have been made in certain areas, for instance on textual considerations with regards to the definitions of parties, and although both meetings were reportedly held in a positive and forward-looking atmosphere, major bottlenecks still remain to be addressed.

Prime amongst these bottlenecks are the details of the SADC EPA market access, particularly in regard to agricultural goods. The EU continues to argue that there is room for the region to improve its offer, notably on those goods where the region appears to be a net importer. This question will be further discussed during the next technical working group meeting on market access, currently planned the 18-19 July. This meeting will also look at ways to overcome both parties’ constraints by examining various instruments such as quotas and safeguards. On the question of (EU) agricultural subsidies, which has often been reported as being one of the major stumbling blocks in the negotiations (in all regions), no progress seems to have been made.

In Pretoria, disagreements on Non Agricultural Market Access (NAMA) also became clear. The EU judged the latest proposal tabled by the SACU countries during the Johannesburg round of negotiations (November last year) as insufficient, and the EU thus considers the issue to be currently expelled from the negotiations. This position is not shared by the region, which insists that the NAMA should to be part of the agreement.

Beyond Market Access, the issues of export taxes and (agricultural) safeguards remain highly contentious. Similarly, the so-called “new issues” (good governance in tax matters, and provisions related to “sustainable development”) that the EU proposed to include in the EPA, continue to oppose the parties. According to sources close to the negotiations, some progress have been made on two issues that has often been reported as blocking the negotiations:

(i) On the Most Favoured Nation (MFN) clause: the region has submitted a proposal to extend the non-automatic application of the MFN clause, currently applicable to South Africa, to all members of the Southern Africa Customs Union (SACU), in order to preserve their regional integration process. More discussions might however be required in this respect

(ii) On the question of Geographical Indications: discussions seem to be progressing between the EU and South Africa, both parties have submitted their proposal for consideration. This question may be more difficult to address for the other SADC members, given some capacity constraints.

In Pretoria, parties also used the opportunity of the meeting to discuss issues pertaining to Rules of Origins (RoOs). On the positive side, this meeting allowed parties to clarify certain elements to ensure mutual understanding.

For instance, on the question of product specific rules contained in the Protocol, the EU confirmed that it had no intention for the moment to reopen negotiations on these rules, leaving the product specific rules chapter as agreed in the IEPA. EU’s position on this was not unexpected given the recent reform of the RoOs applicable within the GSP framework, these could however be subject to revisions in the future since the Protocol contains a review clause.

Some progress has also been made in regard to the question of cumulation, for instance in terms of streamlining the structure of the draft text on this subject. Yet, this still realistically requires some major work for it to be finalised in a way agreeable to all parties. The administrative/legal cooperation arrangements between SADC EPA members and other ACP (EPA) states as well as the lists of products excluded from cumulation (9), yet remain to be agreed upon. Besides, the EU also indicated that it wants materials cumulated within the GSP or a FTA to be notified in order to ensure sufficient monitoring and controls over the implementation of the rules. This demand is currently opposed by the region, which argues that the foreseen system of administrative cooperation of the EPA should be sufficient in this regard, all the more given the difficulty to provide the required information.

Beyond cumulation, parties also discussed some of Namibia’s demands regarding the rules for fish and marine products, including i) its request that “born and/or raised” products of aquaculture and marinculture be considered “wholly obtained” products; ii) its demand for tuna derogation (10): and, iii) the question of the right of first refusal — all issues which still require further discussions. These questions, relating to RoOs, should be further discussed 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. More information will be provided in due course.

Caribbean

CARIFORUM launches “CAFEIN”
During a GIZ-supported CARIFORUM EPA Implementation Network (CAFEIN) workshop on the 11-13 June in Santo Domingo, Dominican Republic, regional and national officials from the EPA implementation units shared their experiences on communication strategies in implementing the EPA. They also deliberated the preliminary results of a recent study on the monitoring and evaluation of the EPA, which should be further discussed during the next CARIFORUM Directorate-led meeting of Heads of EPA Implementation Units in early August 2012.

This workshop also provided an opportunity to fully launch the new regional EPA implementation network and website, whose creation had been planned during the October workshop on the Communications and Public Education Dimensions of the Implementation of the CARIFORUM-EU EPA in Antigua and Barbuda (11)(11) .

This network aims to connect all actors that have a stake in EPA implementation, including representatives of the regional EPA Implementation Unit, national EPA implementation authorities and other relevant government departments. Aimed at “harmonising efforts, expediting problem solving fin the EPA implementation process and assisting the national Authorities to improve their activities related to the communication dimension of EPA Implementation(12)” , this network comprises two facets: (i) a public website (see: www.cafein-online.net/) intended to raise awareness around the EPA(13); and (ii) an intranet platform to allow networking among key CARIFORUM EPA implementing authorities at all levels. This network should facilitate cross-sharing of experiences and best practices.

Joint CARIFORUM-EU Trade and Development Committee foreseen for September
It is moreover worth noting that the Joint CARIFORUM-EU Trade and Development Committee meeting (responsible for the implementation and efficient application of the provisions of the EPA), should be held on 27 September in Port-of-Spain, Trinidad and Tobago. Among other items on the agenda is the approval of the Joint Consultative Committee of academics and civil society, the last of the institutions related to the agreement still to be brought into being. It will be preceded by a preparatory meeting of CARIFORUM EPA Implementing States in the first week of August, and will be followed by a meeting of the Joint CARIFORUM-EU Council (highest institution in the context of the EPA) on 26 October, in Brussels.

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

Footnotes

  1. (See Decision No 2/2012 of the ACP-EU Council of Ministers of 15 June 2012 concerning the status of the Republic of South Sudan in relation to the Partnership Agreement between the members of the African, Caribbean and Pacific Group of States, of the one part, and the European Community and its Member States, of the other part. (Brussels, 19 June 2012).
  2. ACP Group/ Resolution N8 of the 95h Session of the ACP Council of Ministers held in Port Vila (Vanuatu) on Economic Partnership Agreements. Port Vila, 13 June.
  3. European Parliament. Press Release. Developing countries need more time to ratify new EU trade agreements, say MEPs. 22 June 2012.
  4. European Parliament (2012). OPINION of the Committee on Development for the Committee on International Trade on the proposal for a regulation of the European Parliament and of the Councilamending Annex I to Council Regulation (EC) No 1528/2007 as regards the exclusion of a number of countries from the list of regions or states which have concluded negotiations (COM(2011)0598 – C7-0305/2011 – 2011/0260(COD)).
  5. See Ramdoo, I. and S. Bilal. 2011. EPA Negotiations: The honeymoon is over…. ECDPM Briefing Note 31. Maastricht: European Centre for Development Policy Management.
  6. ECOWAS Press Release. N173/2012. Mission conjointe des Presidents des Commissions de la CEDEAO et de l’UEMOA auprès de l’Union Européenne. 22 June 2012.
  7. Ghana will protect her economic interest if ECOWAS-EPA fails – Ms Tetteh, GhanaWeb, 28 June 2012.
  8. Diop, Chimère, Diouf Oumar, Honliasso Anani et Seck Galaye, Appui à la création du Fonds Régional APE Afrique de l’Ouest, rapport provisoire première étape, ECO, octobre 2007. For a presentation of the report, see the presentation by Chimère Diop,at the 1er Forum des affaires de la CEDEAO, Accra, 31 October 2007.
  9. In this respect, however, and given the concerns expressed by the SADC party regarding the heavy legal procedures that would be necessary to amend in the future the lists of products excluded from cumulation, the parties notably agreed in Pretoria that the lists that will be included in the agreement could be updated through less constraining procedures, for instance by notifying the joint committee for customs matters.
  10. GREAT insight has been informed that Namibia submitted a request for an automatic derogation of 800 tonnes for tuna.
  11. MEETING ON EPA CALLS FOR ACTION ON COMMUNICATIONS AND PUBLIC EDUCATION. 1 November 2011. CARICOM Press release 398/2011
  12. EPA Workshop gives direction for monitoring and communication, CAFEIN website.
  13. CARIFORUM launches EPA Implementation Network “CAFEIN”. GIZ Trade Newsletter. 18 June 2012.

This article was published in GREAT Insights Volume 1, Issue 5 (July 2012).

Economic Transformation and TradeTrade Policy and Economic Partnership AgreementsACP Group of StatesEast African Community (EAC)Economic Community Of West African States (ECOWAS)Economic Partnership Agreements (EPAs)Southern African Development Community (SADC)AfricaCaribbeanPacificWest Africa

External authors

Melissa Dalleau,