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The Raw Materials Initiative and the way forward in EPA negotiations

07-10-2010

Bilal, S. and I. Ramdoo. 2010. The Raw Materials Initiative and the way forward in EPA negotiations. (ECDPM Presentation).

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Isabelle Ramdoo and San Bilal, ECDPM, AU EPA Coordination Meeting, 7-8 October 2010, Lusaka

 
 
Photo By daleeast

Presentation Transcript

 

1. The Raw Materials Initiative and the way forward in EPA negotiations AU EPA
Coordination Meeting 7-8 October 2010, Lusaka
Isabelle Ramdoo (ECDPM)
San Bilal (ECDPM)

2. About ECDPM
Independent non-partisan foundation created in 1986
Mandate : to improve relations and cooperation between the European Union and the countries in Africa, the Caribbean and the Pacific (ACP)
Board of Governors : ACP and EU, ACP majority
Policy framework : the Cotonou Partnership Agreement; Joint EU-Africa Strategy; and other EU-A/C/P agreements

3. Outline
Part I: The RMI
2)Main concerns?
3)EU Response?
4)Implications for Africa? 
3) Possible policy responses
Part II: EPA Negotiations
Possible way forward

4. PART I The Raw Materials Initiative: What’s at stake?

5. Main concerns
6.
•  EU – race for RM due to increasing DD from emerging countries
•  Africa –for too long exporters of RM, need to keep policy space for industrial devt, growth and job creation
•  EU’s RMI is part of a broader strategy (Global Europe, 2006) to improve the competitiveness of industries given the rise of large emerging countries

7. EU Response Strategy

8. Assessment of its own demand and supply :
•  self sufficient in construction minerals
•  world’s largest or second largest producer of certain industrial minerals , although a net importer of most of them ;
•  highly dependent on imports of metallic minerals ( domestic production = only 3% of world production)
•  EU is highly dependent on high tech materials (essential for technologically sophisticated products and technologies.
•  rely heavily on secondary raw materials

9. As a result of the assessment:
•  Nov 2008: EC Communication to EP and Council: “ The Raw Materials Initiative – Meeting our Critical needs for growth and jobs in Europe ”
•  An integrated strategy based on 3 pillars

10. 

11. What is critical for Europe?

12. 41 strategic raw mats identified, of which 14 are critical

13. How is “critical” defined?
2 conditions:
1. Supply risk , considering: (i) political and economic stability of supply country = mostly in devg countries (ii) production concentration = high (iii) potential recycling and substitution = low (iv) Dependence of EU = high
2. Environment country risk , ie measures that may be taken by countries with weak environment performance to protect their envt and hence impact on supply of raw material

14.

15. Potential EU actions: A Trade perspective
•  RMI is a policy instrument, not a legal document
•  EU will use it to shape its strategies on several front:
1. Internally: use of trade defence mechanisms
2. Bilaterally: bilateral trade agreements and investment policies access to RM though trade negotiations – e.g the EPA by proposal elimination and prohibition of export taxes disciplines on pre and post establishments for FDI (incl in services and non services sector and transparency in regul envt
3. Multilaterally: Working towards stronger disciplines at the WTO new proposal to have stronger disciplines on export taxes DS cases against unfair practices incompatible with WTO rules

16. What implications for Africa?

17.

18. 2. the share of exports of critical raw materials in their total exports to the EU

19. Africa might not be EU’s main target – countries who are likely to be the main targets of the EU are those who:
(i) are the biggest producers
(ii) and have the potential to use export restrictions to manufacture products that will compete with the EU Statistics about Africa show that for most countries, they are not major producers nor the main exporters to the EU, although potential exist

20. Possible policy responses

21.
•  Major concern: need to have policy space to pursue industrial development policies, namely through use of export restrictions complemented by domestic reforms to attract investment and to give incentives to industries.
•  With EU’s external strategy, African countries have been asked to eliminate and prohibit the use of export restrictions (both QRs and taxes) in the context of the EPA

22. Options?
(c)First best: Keep negotiations at multilateral level – outcome likely to be more flexible
(b) Or: Those who have export taxes: exclude them from Agreement (eg ESA) and
(c) Flexibility to introduce temporary measures under specific circumstances in the future, in particular in case of specific revenue needs, the protection of infant industry, in the case of critical food shortage or to ensure food security or where a country can justify industrial development needs (SADC)

23. Part II: EPA Negotiations

24. State of affairs
•  EPA is in disarray
•  Growing EPA fatigue
•  No substantive progress in negotiations
•  Status quo simply not sustainable
•  Need for political leadership: Contentious issues are NOT a technical matter Consider broader political and economic perspective: Development strategy Regional integration relations with EU 

25. Strategic moments
A number of high level meetings :
•  amongst EU (Informal meeting of EU Dev Ministers, 21-22 Oct)
•  ACP Meeting of Trade Ministers. Bxl, 18-22 Oct
•  AU Conf of Ministers of Trade, Kigali, 29 Oct – 02 Nov
•  Between EU and ACP – JMTC, 22 Oct
•  Africa – EU Summit, Libya, 29-30 Nov

26. Strategic Considerations

27.
•  EU will reassess its positions, so will ACP/Africa
•  Reaching an agreement will require concessions on both sides, notably on contentious issues
•  Failure to deliver is likely to have serious political and economic consequences on the EU- Africa/ACP relationship
•  Regional integration and policy coherence

28. Options

29.
•  Strict deadlines
•  Power game
•  Flexibility & compromise: to narrow down ambitions
•  Opting out: agree to disagree = no EPA

30. Thank you for your attention

31. For more information, please refer to: www.acp-eu-trade.org www.ecdpm.org
Isabelle Ramdoo, ir@ecdpm.org
San BILAL, sb@ecdpm.org
ECDPM
O.L. Vrouweplein, 21 , NL – 6211 HE Maastricht The Netherlands
Rue Archimède, 5 B- 1000 Brussels Belgium
Tel. +32-2-237 43 89 
Fax +31-43-237 43 19 

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