EPA Update, GREAT Insights, Volume 3, Issue 1 (December 2013-January 2014)
The success deal reached in Bali on 7 December is an important milestone (1), the first under the World Trade Organization (WTO). Hopefully, similar successes will also prevail in the Economic Partnership Agreement (EPA) negotiations in 2014. But the Bali deal also further highlights the question of erosion of preferences for EPA signatories, in particular given the improved market access package for least-developed countries and potentially improved rules of origin foreseen in the WTO deal.
European Development Commissioner, Andris Piebalgs and Trade Commissioner, Karel De Gucht, also announced in Bali on 6 December some €400 million support over five years, through EU regular aid channels, to help developing countries “most in need” (including ACP ones) implement the Trade Facilitation package agreed at the WTO, including “a contribution of up to €30 million to a dedicated international trade facilitation facility” (2).
Southern African Development Community (SADC): negotiations dragging on
GREAT has been able to gather details on the two latest rounds of EPA negotiations in the SADC region. Little concrete progress seems to have been achieved and offers have been reduced; whether the parties will manage to reach an agreement in early 2014 remains to be seen.
Market Access issues in the agricultural sector appear to be one of the main sticking points in the negotiations. In September, the European Union (EU) agreed to provide a “downwards revised” offer in agricultural goods, since it considered South Africa’s revised offer insufficient to match its own. In a later round in November 2013, where it presented its revised offer, the EU indicated that it would be ready to settle for Southern African Customs Union’s (SACU) current offer, should SACU accept the EU’s.
The said “revised downwards offer” was apparently not enthusiastically received by South Africa during the November negotiations, for various reasons, including that the proposed quotas did not cover current trade flows. South Africa reportedly asked for additional time to consult with its industry on whether the EU’s more modest offer was acceptable. On this last point, the EU is said to have remarked that this request did not show “a sense of urgency” on the part of the SADC negotiating group.
Further, and still on the topic of agriculture, no common position seems to have emerged on agricultural safeguards. As we have reported in the past, Southern African countries demand the inclusion of a specific agricultural safeguard, something the EU has opposed up until now, arguing that the horizontal safeguard clause provides ample protection.
Positions also remain entrenched on the coverage of Export Duties in the agreement, with SADC squarely refusing the current text. The EU, for its part, considers the securing of a supply of raw materials from the region as crucial for its industries, and does not appear ready to budge on this issue.
On a more general note, a list of outstanding issues in the SADC EPA seen by GREAT insights gives a sense of the way to go if an agreement is to be reached in time for the October 2014 “deadline”. Producers dependent on preferential margins to the EU market in the regions are “preparing themselves” for a disruption of exports, according to information received by GREAT.
The next round is planned for January 2014.
Dr. San Bilal is Head of the Economic Transformation Programme and Quentin de Roquefeuil is Policy Officer at ECDPM.
1. See I. Ramdoo, 9th WTO Ministerial in Bali: Trade deal struck but what implications for geopolitics?, http://www.ecdpm-talkingpoints.org/9th-wto-ministerial-in-bali-trade-deal-struck-but-what-implications-for-geopolitics
This article was published in GREAT Insights Volume 3, Issue 1