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GREAT insights Magazine

EPA Update June 2014

12-06-2014

Roquefeuil, Q. de. 2014. EPA update. GREAT Insights, Volume 3, Issue 6. June 2014.

Compromise solution found to Nigeria’s concerns, but way forward remains unclear

The group of West African nations asked to come up with a way of assuaging Nigeria’s concerns over the West African Economic Partnership Agreement (EPA) has reportedly found a way out of the current impasse, according to Senegal’s ENDA Cacid, an NGO active on trade matters in the region. Cacid’s report was published by the International Centre for Trade and Sustainable Development (ICTSD), an organisation based in Geneva (1).

Nigeria has up until now blocked the endorsement of the EPA, citing concerns such as revenue loss, deindustrialisation and lack of sufficient commitments from the EU on the development assistance package accompanying the EPA. It also raised a number of questions on articles concerning export taxes, domestic agricultural support in the EU, and compensation of fiscal losses, amongst others.

Meeting on the 10th of May in Accra, Ghana, ministers from Cote d’Ivoire, Ghana, Nigeria and Senegal were apparently successful in getting West Africa’s largest economy to agree on wording that “advises heads of states to approve the negotiated agreement”, while stressing that a number of clauses should be reinforced. It is unclear when Economic Community of West African States (ECOWAS) Heads of States will next meet.

Readers will remember that Nigeria had singled out 181 tariff lines that it considered problematic in the current liberalisation schedule. The report circulated by ICTSD, which looks similar in style to official ECOWAS reports, does not mention these products specifically but stresses the safeguard measures available to ECOWAS Member States should they seek temporary additional protection. It also goes on to mention that the EPA’s five-year review will be an opportunity to address concerns to which satisfactory solutions have not been found.

A modification of the liberalisation schedule would have meant a re-opening of negotiations with the EU on the most controversial aspect of the EPA in West Africa, namely the level of opening of West African markets. It would also have entailed a re-opening of the market access offer negotiated amongst ECOWAS member states themselves.

The articles that the ministers have agreed should be reinforced concerning the Programme de l’APE pour le développement, known by its French acronym PAPED, domestic agricultural support in the EU and compensation of fiscal losses.

It remains unclear the extent to which ECOWAS negotiators will seek to strengthen the articles in question, and whether formal negotiations will have to be re-opened with the EU. Domestic support to agriculture is a sensitive topic for the EU, which considers its offer to scrap export subsidies on goods exported to EPA signatories as a significant concession.

The PAPED has also been a controversial topic, with ECOWAS Member States generally worried that the financial support provided by the EU would not be additional to what it already provides. The Council of the European Union has issued conclusions aimed at reassuring the region of the EU’s commitment to the PAPED in March (2).

EAC in wait of a Ministerial Meeting

A long-awaited ministerial meeting is in the planning in the EAC region, where Karel de Gucht is expected to attend. For an overview of outstanding issues in the EAC EPA negotiations see our previous report on the region (3).

SADC weighs up EU proposals, EU signals possible flexibility on October 2014 deadline should EPA be signed

Since their meeting in Brussels at the margins of the EU-Africa Summit, Southern African Development Community and EU negotiators met again in Johannesburg, South Africa in mid May to discuss relatively low-level issues of tariff rate quota administration, data exchange and rules of origin.

Prior to the EU negotiating session, an internal SADC EPA grouping of Ministers and Senior Officials was held to discuss the latest EU proposals on the last two outstanding issues: export taxes and agricultural safeguards. The mandate given to the SADC’s EPA grouping negotiating team is unclear, but these two issues will in all likelihood dominate the next negotiating round.

According to our sources, discussions are taking place on the 1st October 2014 “deadline” in cases where the SADC EPA would be signed but not ratified by SADC EPA member states. Whereas signing the agreement is a relatively straightforward process, it can take up to a year; and passing it through domestic legislatures for ratification is generally a lengthy. The exact modalities for doing so vary from country to country.

This question has alarmed African countries currently negotiating an EPA for some time, with some trade diplomats also expressing concern about possible market access disruption. Keeping preferential access to the EU market running is perhaps the single most important goal for African countries negotiating an EPA. The situation whereby an EPA signatory, having concluded negotiations but unable to sign and/or ratify the agreement before the October “deadline”, would lose preferential access would undoubtedly provoke strong reactions from African countries.

Pacific EPA grouping negotiating setup still unclear

As we reported back in February, Pacific EPA negotiations hit a snag when Papua New Guinea (PNG) walked out of regional negotiations (4).

An interview with Adam Janssen, Head of the Political, Trade, Press and Information Section at the Delegation of the European Union for the Pacific, PACNEWS, outlines the latest regarding regional negotiations (5). According to the EU official, the shape of regional negotiations is still unclear. Janssen explains that the situation whereby the PNG would conclude an EPA by itself and the rest of the Pacific would continue negotiating is not workable for the EU since the Commission’s mandate covers regional ACP pacific negotiations. According to him, the situation is still not resolved.

Quentin de Roquefeuil is a Policy Officer at ECDPM.

This article was published in GREAT Insights Volume 3, Issue 6  (June 2014).

Footnotes

1. http://fr.ictsd.org/bridges-news/passerelles/news/ape-ue-afrique-de-l%E2%80%99ouest-le-comit%C3%A9-minist%C3%A9riel-ad-hoc-recommande-l

2. http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/141593.pdf

3. http://ecdpm.org/great-insights/emerging-economies-and-africa/epa-update-april-2014/

4. http://ecdpm.org/great-insights/fostering-more-and-better-jobs/epa-update/

5. http://www.pina.com.fj/?p=pacnews&m=read&o=5114081895322799a0f515d232a3ce

 

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Economic Transformation and TradeTrade Policy and Economic Partnership AgreementsEast African Community (EAC)Economic Community Of West African States (ECOWAS)Economic Partnership Agreements (EPAs)Southern African Development Community (SADC)East AfricaPacificSouthern AfricaWest Africa