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GREAT insights Magazine

EPA Update (Volume 1, Issue 3 – May 2012)

May 2012

Dalleau, M. 2012. EPA Update. GREAT Insights, Volume 1, Issue 3. May 2012. Maastricht: ECDPM

Southern African Development Community (SADC)

Next Joint SADC-EC negotiating round planned for end of May

The date for the next Joint SADC-EC Senior Officials meeting on EPA has tentatively been set for 28-30 May, with technical meetings foreseen from 24-26 May. Some of the major issues remaining in the negotiations are likely to be discussed, prime amongst which market access. South Africa’s demands are a point of contention and the EU, for its part, judged insufficient the latest proposal tabled by the countries of the Southern Africa Customs Union (SACU) on Non Agricultural Market Access (NAMA) and agriculture during the Johannesburg round of negotiations (November last year). 

The EU and Namibia also have to agree on the sensitive question of rules of Origins (RoO) for fisheries, which continues to be an important bottleneck in the negotiations, although experts close to the negotiations seem to argue that most of these issues could be solved at the technical level. Other critical issues that continue to hamper the pace of the negotiations include the issue of export taxes, the MFN clause, trade in services, the cumulation in RoOs, trade-related issues, the definition of parties and the standstill clause.

The parties continue to work towards the finalisation of an agreement by the end of July 2012, bearing in mind that the EU process to conclude an agreement may require at least 18th month. One should remember that the temporary arrangement granted under Regulation 1528/2007 may come to an end by January 2014 for those countries which have not taken the necessary steps to implement an agreement. This timing appear however quite tight given the number of unsettled issues remaining on the table. Nevertheless, the European Parliament seems to be considering a possible extension of this ‘deadline’ to 2016.1

East African Community (EAC)

EAC-EU negotiators continue to progress towards the finalisation of the EPA negotiations 

A joint technical EAC-EU negotiating session was held from 18-20 April in Brussels, Belgium. During this meeting, the EU presented the changes it would like to see in the EPA consolidated text as compared to the Framework EPA (FEPA) – changes which will be considered by the region and discussed during the next negotiating session in May in Mombasa, Kenya. 

On development cooperation, after a few exchanges between the parties on the substance of the text, the chapter seems now to be relatively finalised. The EAC agreed in Brussels to examine the latest comments from the EU and send a clean version ahead of the Mombasa round. However, the place that the EAC Development Matrix should have in the text of the agreement (i.e. whether it should be an Annex to the Agreement or not) and the question of what would be an appropriate timing for the development of benchmarks, indicators and targets (i.e. after the signature or after the entry into force of the agreement) appeared once more too controversial to be settled at the technical level. Those have consequently been deferred to the level of Senior Officials. 

According to sources close to the negotiations, some substantive progress has been made in Brussels on the Joint Agriculture text, not only on a few definitional issues, but also on the sensitive question of “domestic support and export subsidies”. The EU submitted revised texts on this subject, including a commitment to discontinue export subsidies on products concerned by liberalisation. The region has positively welcomed these revised texts. The EU also provided comments on the text submitted by the EAC concerning Geographical Indications – comments which will be examined by the region ahead of the next negotiating session in May 2012.

Finally, the negotiations touched on the topics of trade and sustainable development (TSD) and good governance in tax natters – two “new issues” introduced by the EU in December 2011. The EAC expressed its intention to conduct consultations before reverting to the EU on this subject. The same will be done on the question of obligations from Customs Unions concluded with the EU (the so-called “Turkey clause”).

As reported in the pages of the last issue of GREAT Insights, Rules of Origin (RoOs) were purposely kept out of the agenda to leave the time for the region to hold national and regional consultations on RoO for industrial products. RoOs should be discussed, along with unsettled provisions related to agriculture, dispute settlement and institutional arrangements in Mombasa. 

The Mombasa round of negotiations is planned from 8-11 May 2012 at the technical level only. Given the scope of outstanding issues that remain to be settled at the technical experts level, the joint Senior Official meeting that was initially foreseen on the 14 May has been postponed to the 15
th of July and will be preceded by another technical level meeting.

West Africa

West Africa meet its EU counterpart in Brussels

Following an apparently fruitful round of negotiations on RoOs, technical experts and senior officials from West Africa and the EU met in Brussels from 17-25 April. This meeting was held shortly after a meeting of the Regional preparatory Task Force on the EPA development programme. 

The specific wording of the non-execution clause continues to remain controversial. Similarly, the so-called “Turkey-clause” and the MFN clause will require further discussions. Both questions will be the subject of internal consultations within the region. The EU has also reportedly submitted a proposal on the text regarding agricultural subsidies to West Africa. 

According to our sources, little seems to have been achieved during the Brussels meetings on market access. Discussions on 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, but according to a recent EU press release, “The EU is confident that a compromise can be found with a decision at political level on reciprocal market access”.(2) Consultations on these issues should be held within the West African region ahead of the next negotiating round. 

On the question of the EPADP, major progress seems to have been made, although the question of “additionality” of funds remains unsettled and has been deferred to the political level. 

No date has currently been set for the next negotiating round between the parties, but the EU has indicated that it will be held after internal consultations in West Africa.(3) 

Central Africa

Preparatory EPA meetings held in the region during the first quarter of this year

The Permanent Secretariat of the Regional EPA Committee, comprising of technical officials from the two regional Economic Communities (RECs) in charge of the negotiation in the region (i.e. the Economic Community of Central African States (ECCAS) and the Economic and Monetary Community of Central Africa (CEMAC) met from 13-17 February to agree on a draft negotiating programme and discuss common projects under the Regional indicative Programme (RIP) of the 10th European Development Fund (EDF). 

On another subject, a meeting was held in Douala, from 29-30 March, to present the results of a study on trade in services. Commissioned by CEMAC and ECCAS and financed by TradeCom, this study should help the region refine its position on services in the context of the EPA negotiations, and ensure a coherent regional approach. 

Beyond these regional meetings, no joint EPA negotiating session has taken place between the parties since their encounter in Bangui (RCA) in September 2011. No further information is available at this stage as to when and where the next joint negotiating round should be held. GREAT was however informed that a meeting should take place early May in Brussels with EC and Central African representatives to evaluate the progress made on two commissioned studies, respectively focusing on the methodology and evaluation of the “net fiscal impact” of an EPA, and on capacity building to ensure that Central African economies benefit from the opportunities deriving from an agreement. In the meantime, CEMAC and ECCAS are actively preparing an internal regional ministerial meeting to validate the progress made at the technical level since February 2010 – a critical step in order to move forward.

Eastern and Southern Africa (ESA)

No joint negotiating round has been held between the parties on the EPA over the past few months, and as GREAT goes to press, no future date seems to have been set.

Zimbabwe’s IEPA: notification of ratification

According to sources close to the negotiations, Zimbabwe has notified to the EU its will to ratify the EU – ESA interim EPA, which should then enter into provisional application. If this is confirmed, Zimbabwe will be the first country to do so in sub-Saharan Africa.

Extension of Derogation on RoO for tuna/tuna loins for Mauritius, Seychelles, Madagascar

The EU amended the 2008 Decisions of the EC regarding Rules of Origin for tuna and tuna loins applicable to Mauritius, Seychelles and Madagascar. This decision has been published in the Official Journal of the EU on 12 April.(4)

It extends the temporary RoO derogations granted to these countries under Council Regulation 1528/2007 applying temporary market access arrangements for ACP country during EPA negotiations. Concretely, it allows Mauritius, the Seychelles, and Madagascar, to export preserved tuna products under preferential rates even if the tuna was caught by foreign vessels. The quotas are set at 3000 tonnes of preserved tuna and 600 tonnes of tuna loins for Mauritius, 3 000 tonnes of preserved tuna and 600 tonnes of tuna loins for Seychelles and 2 000 tonnes of preserved tuna and 500 tonnes of tuna loins for Madagascar.(5)

Pacific

As GREAT Insights goes to press, regional preparatory meetings were to be held in Tongatapu, Tonga, to prepare the next joint negotiating round of negotiations. A Pacific ACP Meeting was being foreseen on Market Access on the 23 April 2011 – meeting which should have been followed by a PACP Technical working group on Fisheries issues (24-25 April), and a meeting of the Technical Working Group on Legal, Institutional and Capacity Building (26-27-30 April). Outcomes of these technical discussions were then to be considered by PACP Trade Officials (1-2 May) and Ministers (3-4 May). As we go to press, however, no information was available as to whether those meetings were actually taking place.

Caribbean

CARIFORUM and EU sign financial agreements in support of Regional Integration and EPA implementation

On March 28, the Caribbean Forum of ACP States (CARIFORUM) signed three financial agreements in support of regional integration in the region with the European Commission (EC). These funds should help CARIFORUM signatories of the EPA to meet their commitments and make the most out of an agreement (they come to support fiscal reforms, SPS measures, commitments taken on trade in services, rum industries, and the removal of Technical Barriers to Trade).(6) 

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

This article was published in GREAT Insights Volume 1, Issue 3 (May 2012)

Footnotes
(1)DRAFT REPORT on the proposal for a regulation of the European Parliament and of the Council amending 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. Committee on International Trade. Final Parliamentary Decision should be discussed in June 2012.
2. EC DG Trade Press Release. EU and West Africa hold EPA negotiations in Brussels (18-20 April 2012). 2 May 2012.
3. Ibid.
4. COMMISSION IMPLEMENTING DECISION of 4 April 2012 amending Decisions 2008/603/EC, 2008/691/EC and 2008/751/EC as regards the temporary derogation from the rules of origin laid down in Annex II to Council Regulation (EC) No 1528/2007 to take account of the special situation of Mauritius, Seychelles and Madagascar with regard to preserved tuna and tuna loins (2012/190/EU).
5. COMMISSION IMPLEMENTING DECISION of 4 April 2012 amending Decisions 2008/603/EC, 2008/691/EC and 2008/751/EC as regards the temporary derogation from the rules of origin laid down in Annex II to Council Regulation (EC) No 1528/2007 to take account of the special situation of Mauritius, Seychelles and Madagascar with regard to preserved tuna and tuna loins (2012/190/EU).
6. European Commission/CARIFORUM Agreements to Boost Regional Integration. St Kitts and Nevis Observer. 31 March 2012.

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Economic Transformation and TradeTrade Policy and Economic Partnership AgreementsEconomic Partnership Agreements (EPAs)CaribbeanCentral AfricaEast AfricaPacificSouthern AfricaWest Africa

External authors

Melissa Dalleau