EPA Update, GREAT Insights, Volume 1, Issue 4 (June 2012)

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 

EPA Negotiations Coordination Meeting held in positive atmosphere 

The African Union Commission (AUC) hosted an EPA negotiations coordination meeting in Arusha, Tanzania from 17-18 May 2012, convening, among others, representatives of the Regional Economic Communities (RECs), international organisations and private sector representatives. 

The meeting aimed at facilitating the crosssharing of experiences on EPAs and at harmonising positions in common areas of negotiations across regions. It also provided a platform to work towards the coherence of national, regional and continental policies, and reflect on the linkages between EPA negotiations and the discussions currently held at the WTO. Overall, the general atmosphere in Arusha was reported to be positive and forward-looking. 

It came out quite clearly that the remaining contentious issues in EPA negotiations (export taxes, the Most Favoured Nation (MFN) clause, EU domestic subsidies, the non-execution clause and the so-called “new” issues introduced by the EU) are of a common nature across regions. Participants thus reiterated the importance of sharing information regularly across regions to ensure that negotiators from one region are aware of concessions made by the EU in another and suggested reinforcing the EPA coordination mechanism, for instance through the creation of an online platform that would provide up-to-date information on EPA developments across regions. 

Moreover, all insisted on the necessity for the continent to speak with one voice in EPA negotiations, to avoid different clauses and provisions across regions or countries that could potentially undermine regional integration processes. Accordingly, all agreed that African integration should be given precedence over the EPAs, and participants stressed the necessity of automatically granting each other concessions made to the EU during EPA negotiations. They also called for the specific interests and concerns of Least Developed countries to be taken into consideration in the EPAs to allow them to join an agreement. 

This meeting was also an opportunity to hear the views of private sector representatives, who stressed their opposition to an hypothetical MFN clause in the EPAs, the prohibition or curtailment of export taxes, and emphasized the need for resources dedicated to implementing the EPA and addressing supplyside constraints. 

Notwithstanding the positive atmosphere on EPAs, the importance of looking for alternatives, should an EPA not be signed, was also mentioned, notably by AU officials. They insisted on the importance of AU led initiatives such as the African Continental Free Trade Area (CFTA), foreseen around 2017. The AU proposal for a ‘Common and Enhanced Trade Preference System for Least Developed Countries and LowIncome Countries’, which invites preference giving countries to reform and enhance their GSPs, was also highlighted.

East African Community (EAC)

EAC-EU EPA negotiations on track for finalisation this year

EAC and EU technical officials met in Mombasa, Kenya from 8-12 May, to address some outstanding issues in the negotiations. On the sensitive topic of Rules of Origins (RoOs) in the agreement, various product specific rules will require further discussions, despite progress in some areas. Moreover the EAC continues to ask the EU to go beyond the RoOs offered in the GSP – while the EU argues that it has already provided substantial flexibility on some products (such as textiles), insisting it can not go further.

Progress was made on some aspects of the consolidated EPA text, notably on the wording of certain parts of the Agreement and the reshuffling/streamlining of some provisions across titles. Furthermore, according to sources close the negotiations, the rendezvous clause, the amendments made to Annex I and II of the Framework EPA text, and the provisions related to information exchange and transparency under the SPS chapter now seem to be the object of a consensus between parties. However, the EU proposal with regards to the provisional application of the agreement continues to be opposed by the EAC, not least due to legal reasons.

With regards to the Economic and Development Chapter, although it has been polished and integrated into the consolidated text, the place that the EAC Development Matrix should have in the text of the agreement and the question of what would be an appropriate timing for the development of benchmarks, indicators and targets continues to be controversial. These issues have been deferred to the Senior Officials level (see our previous EPA update). In Mombasa, technical officials also addressed the unsettled provisions related to agriculture, although little progress seems to have been achieved on the sensitive questions of EU domestic support and export subsidies. Similarly the question of geographic indications remains unsettled at this stage.

The next joint technical officials meeting is currently foreseen from 9-13 July in Brussels. In addition to those mentioned above, the main contentious issues that continue to oppose the parties are: the MFN clause, export taxes, the non execution clause, as well as newer issues introduced by the EU, such as trade, environment and sustainable development, good governance in tax matters and obligations/consequences arising from Customs Union Agreements concluded with the EU. According to an EC press release negotiations are on track for being finalised this 
year(1). Eastern and Southern Africa (ESA)

ESA Interim EPA operational since 14 May 2012

As of May 14th 2012, the Interim Economic Partnership Agreement concluded by the EU with Mauritius, Madagascar, Seychelles and Zimbabwe is officially applied, making it the first such agreement to be operational in Africa. The agreement will officially enter into force once ratified by all parties (2). In accordance with the provisions of the agreement, the EPA Committee, the committee on customs cooperation and on development cooperation should be established soon. In the meantime, parties continue to negotiate a regional EPA. No specific date has been set up with regards to the next joint negotiating session.

Pacific

Pacific Region calls on EC to respond on its proposals on EPA

The regional preparatory meetings initially foreseen from 23 April to 4 May in Tongatapu, Tonga have been deferred. The reason invoked for this cancellation is the EC’s lack of response so far on the revised draft legal text, the development cooperation chapter and the draft market access offers submitted by the Pacific in July 2011(3). No formal joint negotiating sessions has been held between the parties since 2009.

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

Footnotes

1. European Commission. Press Release. EU - East African Community (EAC) EPA discussions in Mombasa (8-12 May 2012). 25 May 2012. 
2. European Commission. Press Release. EU’s first Economic Partnership Agreement with an African Region goes live. 14 May 2012. 
3. Pacific Island Forum Secretariat. Pacific region urges EC engagement for EPA progress. Press Statement 47/12. 13 May 2012. 

This article was published in GREAT Insights Volume 1, Issue 4 (June 2012).