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GREAT insights Magazine

EPA Update May 2014

08-05-2014

Roquefeuil, Q. de. 2014. EPA update. GREAT Insights, Volume 3, Issue 5. May 2014.

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ECOWAS ad-hoc group convenes to review Nigeria’s concerns

The ad-hoc group tasked with drawing up a solution to the latest impasse in West Africa’s Economic Partnership Agreement (EPA) negotiations met last week in an effort to come up with ways of assuaging Nigeria’s concerns over the agreement [1].

The group, set up during the last the Economic Community of West African States (ECOWAS) Heads of State meeting in March consists of Cote d’Ivoire, Ghana, Nigeria and Senegal. The last-minute objections raised by the West African giant had prevented the adoption of the deal during the meeting.

The group is tasked with coming up with a way out of the current situation. Cote d’Ivoire and Ghana are the two ECOWAS countries where pro-EPA industries are the strongest. They are also the strongest backers of the deal in the region. A significant share of their exports rely on preferential access to the European market which will come to lapse in October 2014 should no EPA be signed. Senegal has, as of late, assumed the role of regional mediator when it comes to EPA negotiations. Its president, Macky Sall, was appointed to supervise negotiations by his peers last year.

Nigeria, for its part, is home to a strong industrial sector that has long opposed the EPA. Industry representatives had strongly criticized the agreement when it was announced earlier this year that ECOWAS and EU negotiators had found a compromise on outstanding issues in the agreement.

GREAT has yet to gather information on the outcome of the meeting. but the process is foreseen to lead to the issuing of new guidelines to chief negotiators. This, according to our sources, should happen in late May. It is unclear if a reopening of negotiations is possible: European officials cited by Reuters prior to the Heads of States and government meeting had warned that “[ECOWAS] should not re-open anything” [2].

With Nigeria asking that some tariff lines in the liberalisation schedule be reviewed and that the development financing commitments undertaken by the EU be strengthened, it is unclear what steps regional officials can take without re-opening the negotiations with the EU. The Nigerian Ministry of Trade has explained that he wishes to see products and sectors targeted by the high-profile Nigerian Industrial Revolution Plan shifted in the category of goods excluded from liberalisation. He also stressed the importance of working “together as ECOWAS members and not to allow EPA to divide us” [3].

In the meantime, the Ghanaian press has reported on a public meeting between Ghanaian officials and the business community. According to the report, tensions in the business community are running high between pro-EPA industries and other sectors generally wary of increased competition. Some heavyweight companies in Ghana’s agricultural sector – such as Cargill or Golden Exotics – have warned that the loss of preferential market access to Europe would severely affect their future operation in Ghana and compromise their presence in the country [4]. Other sectors fearing competitive pressures were apparently up in arms against the Ghanaian’s government wish to sign the EPA.

GREAT will report on the conclusions of the ad-hoc meeting as soon as information becomes available.

SADC EPA negotiations down to 2 issues, electoral season in South Africa complicates end game

EPA negotiations in the SADC grouping are now down to two outstanding issues: export taxes and agricultural safeguards, but the South African electoral calendar is seen as complicating prospects for a speedy outcome.

The EU has submitted two revised texts to the region after a meeting on the margin of the EU-Africa summit where negotiators could not overcome their differences on these two topics. The texts are the EU’s latest attempt to meet the SADC EPA group halfway. Generally, SADC EPA states have been vehemently opposed to the inclusion of disciplines on the use of export taxes. They consider these tools as important to their industrialisation efforts. Agricultural safeguards are important to South African Customs Union (SACU) countries for which the agricultural sector holds a number of sensitivities on products such as poultry.

Sources in the region indicate that trade ministers in the SADC region are to meet mid-May to review the latest proposals sent by the EC. The proposals, seen by GREAT, have a number of built-in flexibilities such as specific time, volume and value bound exemptions for export taxes. On agricultural safeguards, the main bone of contention appears to be the number of products falling under its remit.

It appears that after a flurry of technical and senior officials meeting the ball is now squarely in the camp of political decision-makers in the region. This could be complicated by the current electoral season in South Africa – with the regional press indicating that coming to a political decision on the EPA might not be possible before the appointment of a new cabinet [5].

Under pressure from Cameroon, Central African EPA group revives EPA negotiations

A report by Enda’s Centre Africain pour le Commerce, l’Intégration et le Développement (CACID), a Senegalese NGO based in Dakar, indicates that the central Africa region has re-opened the EPA dossier after years of relative inactivity [6].

This follows earlier reports that Cameroon was apparently considering entering alone in signing an EPA, or at least applying the Interim EPA it concluded back in 2007. Cameroon, home to a significant banana industry, relies on EU preferential access for a significant share of its exports.

At an earlier meeting, in February 2014, the Council of Ministers form the Communauté Economique et Monétaire de l’Afrique Centrale (CEMAC) had “expressed concerns regarding Cameroon’s application of its Interim EPA” and called on “sectoral ministers to (…) come up with an action plan to speed up the conclusion of a regional EPA” [7]. The Central African EPA group is made up of eight countries, six of which belong to CEMAC, a customs union. Ministers have expressed the fear of seeing Cameroon apply preferential rates to EU imports while its neighbours do not.

The report, published by the International Center for Trade and Sustainable Development (ICTSD), relays the conclusion of an inter-ministerial conference held in Kinshasa on March 28th, where trade Ministers from the Communauté Economique et Monétaire de l’Afrique Centrale (CEMAC) issued guidelines for negotiators. The last negotiating session GREAT has heard of dates back to 2011 – but a meeting between Central African and European negotiators could have taken place in recent weeks.

According to the ministerial report, the EU has reportedly agreed to drop the Most Favoured Nation (MFN) clause from negotiations in Central Africa. The ministers further outline that the region is ready to open its market to the tune of 73% of tariff lines over 20 years – largely in line with what was agreed with West Africa a few months back. In stark contrast with its West African neighbour, however, the region seems determined to negotiate on services – including mode 4. The text also reveals a strong wish to condition any tariff dismantlement on solid commitments on the EU’s behalf to finance the region’s accompanying adjustment plan, the Programme d’Accompagnement du Développement dans le cadre de l’APE (PRADA).

It is unclear what the next steps in the region are. The DG Trade website did not indicate a negotiating session with Central Africa in the future [8].

Quentin de Roquefeuil is a Policy Officer at ECDPM.

This article was published in GREAT Insights Volume 3, Issue 5 (May 2014).

Footnotes

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

2. http://www.reuters.com/article/2014/03/27/us-westafrica-eu-trade-idUSBREA2Q25V20140327

3. http://allafrica.com/stories/201404020429.html?page=2

4. http://www.spyghana.com/epa-debate-causes-stir/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Spyghanacom+%28SpyGhana.com%29

5. http://www.polity.org.za/article/new-sa-cabinet-to-make-eu-trade-deal-call-as-talks-near-end-2014-04-25

6. See http://ictsd.org/i/news/passerellessynthese/188046/ for the full text (in French).

7. http://www.cemac.int/sites/default/files/26%2B%C2%BFme%20Session%20-%20CM_UEAC.pdf

8. http://trade.ec.europa.eu/doclib/docs/2009/september/tradoc_144912.pdf

 

 

 

Economic Transformation and TradeTrade Policy and Economic Partnership AgreementsEconomic Community Of West African States (ECOWAS)Economic Partnership Agreements (EPAs)Southern African Development Community (SADC)Central AfricaEast AfricaSouthern Africa