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EPA Update, GREAT Insights, Volume 1, Issue 2 (March-April 2012)

01-03-2012

Dalleau, M. 2012. EPA Update. GREAT Insights, Volume 1, Issue 2. March-April 2012

All ACP

Parliamentarians discuss EPAs

A European Delegation of parliamentarians from the International Trade Committee of the European Parliament visited Kenya and Zambia this March, in order to monitor EPA negotiations in the EAC and ESA regions, and discuss their potential impact. Parliamentarians used the opportunity of these visits to meet with stakeholders — government authorities, business and trade organisations, and representatives from civil society.(1) 

On 22-24 February 2012, the Members of the ACP-EU Joint Parliamentary Assembly (JPA) from the Southern Africa region of the ACP Group and their European Parliament counterparts met in Lusaka. They reemphasized the importance for EPAs to be tailored to enhance Regional Integration objectives, and of the role of “elected representatives to enhance clarity on the EPA process.(2)

These Parliamentarian discussions should be seen in the light of European Commission’s proposal to amend the EPA Market Access Regulation 1528/2007 to exclude from its remit countries that have not taken the necessary steps to ratify and implement their agreement as from 1st January 2014. Following the Lisbon treaty, the European Parliament will have the possibility to amend, adopt or reject the proposal.

The imposition of this deadline has been strongly criticized among ACP stakeholders, not least in Parliamentarian circles. Indeed, meeting in the framework of the 27th session of the ACP Parliamentary Assembly, ACP Members of Parliament called for flexibility on the side of the EU;(3) a position which echoes the one of ACP Secretary General M. Ibn Chambas, who, in his address to the Assembly, insured that “ [The ACP secretariat] continue[s] to use quiet diplomacy and moral authority to prevail on our EU colleagues to exercise a greater degree of creativity and flexibility – and to tamper the calculus of economic self-interest with a dose of empathy, enlightenment and practical reason.(4) This ACP Parliamentary Assembly session was held from 20-22 March, in preparation of the 23rd session of the ACP-EU JPA — which will be held in Horsens (Denmark) from 28-30 May 2012.

West Africa

EPA meetings postponed in the region

To our knowledge, no EPA meeting has been held on the EU-West Africa EPA this month. The negotiation sessions planned at Technical and Senior Officials level in Brussels from 13-17 February have been postponed (partly due to the recent institutional changes within both the UEMOA and ECOWAS Commissions).

Among the remaining bottlenecks in the negotiations of a regional agreement, one could mention: the revised market access offer tabled by the West African side, a few issues related to the EPA Development Programme (EPADP), the definition of third countries concerned by the MFN clause, the non-execution clause, the status of the Community Levy, subsidies and domestic support, as well as Art. 106 addressing the question of Customs Unions between the EU and third parties.

The next round of negotiations on Rules of Origins is now foreseen from 26-28 March in Brussels. Discussions on the text of the agreement and on outstanding and contentious issues should occur from 17-25 April, also in the Belgian capital. The Regional Preparatory Task force will meet simultaneously on the 17 April to address issues related to the EPADP.

Central Africa

EPA Negotiating Roadmap for 2012 soon to be finalised

No EPA negotiating session has been held between the parties since the last round held in Bangui (RCA) in September 2011. 

Following regional meetings held from 31 October to 4th November in N’Djaména (RCA), the region has however elaborated its regional market access offer, which has been transmitted to the EU counterpart. 

The draft negotiating roadmap for the year 2012, which has been elaborated jointly by the CEMAC and CEEAC Secretariats in Bangui earlier this year, is currently under consideration in Brussels. Specific venues and dates for future negotiating sessions remain to be specified. In the meantime, Central Africa has submitted to the Ministers a proposition of ministerial consultations to validate the progress made in the region during the year 2011.

SADC

SADC-EU joint negotiating sessions postponed

No meeting between the parties has been held on the EU-SADC EPA since the last technical and senior official meetings that took place in Johannesburg from 10-16 November. Following this negotiating round (which addressed questions of market access, services and investment, geographical indications and Rules of Origins – see our previous EPA update for a report on this meeting), SADC and EU technical experts and Senior Officials should have met again in early February and early March this year in the Southern African Region. These two meetings have however been postponed to later dates. Although discussions are currently being held on when the next Joint Seniors Officials Meeting could take place, no further information is available as GREAT goes to press.

ESA

No joint EPA meetings held since November last year

The joint ESA-EU technical and senior officials negotiating sessions originally foreseen in March 2012 have not yet taken place. No further information is available in this respect. Despite a few progress made during the last joint negotiating session held in Mauritius in November 2011 (notably on questions related to Sanitary and Phyto-Sanitary Standards (SPS) and Technical Barriers to Trade (TBTs) on which negotiations have been finalised), a few issues, among which the controversial issues of export taxes, rules of origin and special agricultural safeguards, continue to seriously hamper the pace of regional negotiations. Discussions on trade in goods, services and trade-related assistance should also be on the agenda of the parties during future encounters. The question of the additionality of funds in the context of development cooperation is also one that continues to divide the two parties.

Implementing the IEPA: MMSZ go one step further
In the meantime, a seminar aimed at discussing the beginning of the implementation phase of the IEPA signed by Mauritius, Madagascar, the Seychelles and Zimbabwe (MMSZ) in August 2007,(5) has been held, mid-March, in Mauritius. Gathering representatives from the EU, as well as governmental authorities and representatives from the private sector of the four countries mentioned above, this seminar was not only an opportunity to discuss advantages and challenges potentially deriving from an EPA, notably for private sector actors; but also an occasion to explore options for further enhancing trade in the region.(6)

EAC

EAC-EU negotiators continue to work towards the finalisation of the EPA negotiations by Summer 2012. 

Following the last technical and senior officials (SO) level meeting between the EU and the East African Community (EAC) EPA group that was held in Brussels from 12-15 December 2011, an EAC-EU EPA Experts Intersession meeting was held from 20-24 February in Kigali, Rwanda, to discuss provisions related to Rules of Origin (RoO) and the text on “Institutional Arrangements, Dispute Settlement and Final Provisions”.

With regards to the Protocol on RoO, whilst some progress has been achieved during the Intersession meeting on a number of articles, the parties have not yet reached an agreement in areas such as cumulation, administration cooperation, and the timeframes for the verification of origin and for the suppliers’ declarations. According to sources close to the negotiations, all provisions related to RoO for fisheries products also remain unsettled. Beyond the Protocol, discussions also focused on Annex II of the agreement, including on product specific rules. Progress has been made on agricultural and processed agricultural products (chapters 1-24 and chapter 35). However, a few chapters/headings remain to be negotiated.

As agreed during the December SO negotiating session, the EU has sent comments on the EAC Annex II proposals for RoO for Chapters 25-97 covering industrial products. The Region expressed during the February Experts Intersession meeting its intention to conduct national and regional consultations on this subject in April this year. 

With regards to the text on “Institutional Arrangements, Dispute Settlement and Final Provisions”, the European Commission submitted during the Kigali meeting their positions on most parts of the text but on Title I related to Institutional Arrangements and a few articles regarding the General Exceptions, on which the EU agreed to come back to the EAC in March. The Region should now consider the EC proposals ahead of the next joint technical officials meeting that will be held between the parties from 18-20 April 2012 in Brussels, Belgium. This meeting should be an opportunity for parties to discuss all remaining issues in the negotiations, but the question of RoO, which should be kept out of the agenda to leave the time for the region to hold the above-mentioned national and regional consultations on RoO for industrial products. 

The next technical and senior officials level negotiating sessions will then be held in Mombasa, Kenya, respectively from 8-12 May 2012 and 14 May, to consider all issues under negotiations. A Ministerial meeting should then in principle be scheduled to finalize the negotiations by summer 2012. 

EAC high-level workshop on interactions between WTO and EPA Negotiations asks for stronger role of the EAC Secretariat(7)

Members of the East African Legislative Assembly, EAC National Parliaments, EAC Ambassadors from the Partner States’ Missions in Brussels and Geneva, Permanent Secretaries, WTO and ACP representatives, as well as stakeholders from the business community and civil society met for an EAC high level workshop organized in Arusha, Tanzania, from 13-16 February. The workshop aimed at making specific recommendations on the EPA negotiation process in the region, notably in light of developments at the WTO. 

Participants clearly expressed their positions with regards to ongoing EPA negotiations, notably urging to leave out of the agreement provisions related to export taxes, the so-called “Singapore issues”, trade in services, as well as the MFN, standstill, and non-execution clauses. They also asked for a strengthened trade coordination and negotiation structure in the context of the EPA negotiations, soliciting the Council of Ministers to consider consolidating the role of the EAC Secretariat. It considered that its role should be akin to the one of a “think tank [that would] support the partner states trade negotiations with evidence based and research positions(8) in the EPA negotiations. 

More coordination between various stakeholders (e.g. between negotiators and Geneva/Brussels-based ambassadors, or between negotiators and private sector actors) and the necessity to conduct a thorough impact assessment of the EPA on the long term industrial development of the region, were also among the recommendations made by the high-level participants.

Caribbean

No specific meeting concerning the implementation of the CARIFORUM-EU EPA has taken place in the past month. Judging from the discussions on the possible reforms to be brought to the CARICOM Secretariat during the 23rd Inter-Sessional Conference of CARICOM Heads of Government held in Suriname this March,(9) the region seems currently busy dealing with its own regional governance matters. 

This said, in line with the requirements of Art. 74 of the concluded EPA, according to which “the parties shall review the investment legal framework, the investment environment and the flow of investment between them,(10) a report, commissioned by the Regional EPA implementation Unit, has recently been completed, to“ provide appropriate technical guidance to allow informed decisions to be taken in respect of the Region’s obligations(11) and making concrete suggestions on how to ensure an effective monitoring of investment flows between the parties. 

Among the main bottlenecks that continue to hamper the smooth implementation of commitments taken in the context of the agreement, the latter document mentioned, inter alia, heavy government bureaucracy, the lack of regional harmonization when it comes to national legal systems of CARIFORUM countries and national investment legislations, as well as the lack of common policy when it comes to investment promotion.(12)

Warning about the limited knowledge and awareness of the private sector (both in the region and in Europe) on the potential benefits of an EPA, the report emphasizes the possibilities to improve communication around the EPA through different means, including the definition of a methodology to gather and process statistical information on FDI in CARIFORUM Member countries.(13)

Pacific

2nd Trade Committee Meeting under the Interim EPA between EU and PNG discusses impact of “global sourcing” derogation for fisheries products

The second meeting of the EPA Trade Committee under the Interim EPA was held in Port Moresby, Papua New Guinea (PNG) on 24 February – a meeting to which Fiji (the only other country with PNG to have signed such an interim EPA) was not participating, as it has not yet applied the agreement.

This meeting was an opportunity to assess and report on progress made in the implementation of tariff commitments on the side of PNG, which reported that 77.1% of (HS8) tariff-lines had already been eliminated, whilst duties on the remaining 5.1% tariff lines to be liberalized in the context of the IEPA should be removed in accordance with a gazettal notice to be released by PNG at the end of March 2012.(14)

The parties also concluded the process of consultation on the implementation of the special derogation to the rules of origin for fishery products within the framework of the Trade Committee.. It should be recalled that the EU had agreed under the Interim EPA concluded in 2009 to allow some Pacific countries to source fresh fish — regardless of where it was caught and by which vessel — and re-export it under preferential EPA rates to the EU in processed form (canned tuna or frozen cooked loins), under the so called “global sourcing” provision. 

This consultation was based on a report examining its development effects, as well as its impact on conservation and the management of fisheries resources.(15) According to the report, up to now, PNG made only limited use of the derogation, but five projects that should create 53,000 jobs by 2016 are in the pipeline. 

On a related matter, the joint Trade Committee agreed that the two parties should continue their discussions, including in the framework of development cooperation, on how to handle potential preference erosion on fisheries products and palm oil that may follow from the conclusion of Free Trade Agreements between the EU and third countries – preference erosion that may negatively impact on PNG’s economy.(16)

As reported in the agreed minutes from the Trade Committee meeting, the encounter was also an occasion for the EU to submit various documents with regards to Rules of Procedures in the context of the agreement, as well as to inform the Committee about the results of a recent two day seminar held in PNG with representatives of PNG private sector to raise awareness about the agreement and the potential advantages the latter may bear for their activities ibid.

The PNG government also indicated it is considering whether to deepen its interim trade agreement with the EU to issues such as services and investment on its own or collectively with the region. However, few other Pacific countries have expressed interest in joining the IEPA, and none have as yet formally requested the possibility to do so. 

As reported in the pages of our last issue of GREAT Insights, following their encounter in Brussels in November 2011, EU and Pacific ACP (PACP) states’ representatives agreed to hold their next technical level negotiating session in the spring of 2012 to discuss the key contentious issues that continue to hamper the conclusion of a full regional EPA, including the unsettled questions of the MFN clause, the non-execution, infant industry and standstill clauses, export taxes, trade in goods, development cooperation and the sensitive question of rules of origins in the fisheries sector.(17) 

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

Go back to the table of contents

Footnotes
1. John Oyuke. European MPs in drum up support for EPAs. The Standard. 20 March 2012.
2. final communique of the 7th Regional Meeting of the ACP-EU JPA. 
3. ACP SECRETARIAT Press Release. ACP Members of Parliament urge more understanding from Europe on free trade agreements. 22 March 2012. 
4. Address of the Secretary General at the 27th Session of the ACP Parliamentary Assembly, 20 March 2012, Brussels. ACP Press Release.
5. One should recall here that while at the end of 2007, six ESA countries have initialed an EPA, only the four countries here mentioned have signed their Interim EPA. 
6. Maurice souhaite un accord de partenariat économique complet entre l’Afrique orientale et australe et l’UE. Xinhua, via CRI online. 
7. EAC High level Workshop on interaction between the WTO and EPA negotiations ends in Arusha / Participants say support EAC Secretariat to become think-tank for EPA negotiations. February 16, 2012/African Press Organization (APO) via StarAfrica.com. 
8. IBID.
9. CARICOM HEADS OF GOVERNMENT MEET IN SURINAME: RESTRUCTURING AND REFORM HIGH ON AGENDA. CARICOM Press Release 52/2012 (05 March 2012)
10. Economic Partnership Agreement between the CARIFORUM states, on the one part, and the European Community and its Member States, on the other part, published in the Official Journal of the European Union on 30 October 2008.
11. REPORT: EPA PROVIDES COMPREHENSIVE FRAMEWORK TO IMPROVE FLOW OF INVESTMENTS. CARICOM Press release 78/2012 (16 March 2012). 
12. Ibid.
13. Ibid.
14. Agreed Minutes of the second Meeting of the Trade Committee between Papua New Guinea and the European Commission under the Interim Partnership Agreement between the Pacific States of Papua New Guinea and Fiji and the European Union. Port Moresby, 24 February 2012.
15. Amanda Hamilton, Anthony Lewis, Liam Campling. Report on the Implementation of the derogation to the standard rules of origin granted to the Pacific ACP States in the framework of the Interim Economic Partnership Agreement. FWC COM 2011 RFS 2011/266449. Linpico sarl. (financed by the EU). December 2011. 
16. Agreed Minutes of the Trade Committee meeting (see footnote 13) .
17. For more information on the specific agenda and outcome of the November negotiating session held between the parties, please refer to our previous EPA update, available online at: http://www.ecdpm.org/great.

 

This article was published in GREAT Insights, Volume 1, Issue 2

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Economic Transformation and TradeTrade Policy and Economic Partnership AgreementsEast African Community (EAC)Economic Partnership Agreements (EPAs)Southern African Development Community (SADC)CaribbeanCentral AfricaPacificWest Africa