EPA Update, GREAT Insights, Volume 2, Issue 8 (November 2013)

All ACP

EU Trade Commissioner Karel De Gucht last week travelled to South Africa, Cameroon and Cote d’Ivoire in an effort to boost EPA negotiations with Southern, Central and West Africa. He also addressed the important issue of trade facilitation ahead of the 9^th WTO Ministerial Conference in Bali from 3-6 December (1). This should be seen in the context of recent rapid developments in all of these regions (see below for details). 

West Africa

West African leaders re-launch EPA negotiations, put final seal of approval on Common External Tariff

West African leaders, meeting in Dakar, Senegal, on October 25^th, have decided to go ahead with Economic Partnership Agreement (EPA) negotiations on the basis of a new market access offer; nearly a year after the region had initially started contemplating softening its position on the controversial issue of market access. 

As we have reported in these columns over the past months, the ECOWAS Commission and its Member States have been working on a new market access offer since the beginning of 2013. It reportedly stands at around 74% of market opening, up form the region’s previous stance of 70%.

The decision comes amidst strong statement by civil society organizations in the region, which have long been opposed to the prospect of opening West African markets to the European Union (EU). A statement released before the Summit read: “We reject the new 75% market access opening offer that is about to be validated by Heads of State in Dakar. This offer is economically unsustainable and socially catastrophic for West Africa” (2). The statement was signed by unions, farmers’ organisations, business associations and civil society at large. 

The European Commission (EC) and its West African counterparts have not held a negotiating session since April 2012 when negotiations broke down over, inter alia, the level of Market Access opening the West African side was ready to offer the EU. The opening of West African markets to European goods is the centrepiece of the EPA, meant to replace the unilateral preference regime that countries in the region had previously enjoyed. 

The EC has long argued that 80% is the minimum threshold that it would accept, citing fears of challenges at the WTO and “precedent setting” for future negotiations. DG Trade also argues that an offer designed on strictly “development” grounds would easily meet the 80% criteria. 

According to our information, a negotiating round with the EC is planned in the coming months, if not weeks. It remains to be seen if the EU will meet West African negotiators halfway, or what kind of horse-trading could take place vis-a-vis remaining contentious issues in the so-far elusive quest for compromise over the EPA package. 

With the October 1^st 2014 deadline approaching fast, and regional tensions potentially aggravated between would-be EPA signatories and more reticent countries, the Summit has put President Macky Sall of Senegal in charge of monitoring negotiations “in pursuit of a mutually advantageous outcome”. 

At the same Dakar Summit, the region’s Heads of State and Government have also finalised the design of the Common External Tariff (CET), largely validating the orientations given by the Ministers of Trade and Finance on September 30^th. The two taxes financing the regional commissions (UEMOA and ECOWAS) will coexist side by side for a period for five years, after which a review will be undertaken towards possible harmonisation. 

Additionally, countries will be able to keep 3% of their tariff lines at a maximum of 70% divergence from the CET rates, using the two “complementary measures” designed to accompany the CET, up until 2015 (3). 

East African Community

EPA awaits Ministerial meeting

The EU has proposed to hold a ministerial meeting with the East African Community (EAC) to thrash out the last remaining high-profile issues in the EAC region on 19^th or 20^th December 2013, although this has yet to be confirmed. The two parties have agreed to hold negotiating sessions at technical and senior officials level prior to the ministerial, in order to attempt to resolve some of the smaller divergences. 

Central Africa

Cameroon reported to be preparing to ratify IEPA. According to reports in the local press, Cameroon is now seriously considering to ratify its Interim Economic Partnership Agreement (IEPA), breaking away form the broader regional grouping.

Reports had already surfaced this summer that reflections had started at the highest political level on cementing Cameroon’s IEPA (4). The outgoing EU Ambassador to Cameroon, Raul Mateus Paula, seemed to confirm this when he stated that the local authorities had “indicated that the ratification process was imminent”. “[Ratification] is on course, at least that is what authorities have confirmed to me” (5). 

Other articles in the local press indicate that the debate was still raging between different members of the government in Cameroon, but that the decision now rested with the country’ president, Paul Biya. He is apparently in favour of such a move (6). 

European and Central African negotiators have not met since 2011 in Bangui, Central African Republic. 

Samoa Ambassador to the EU: “plan B has now kicked in”. The prospect of reaching a regional agreement between the EU and the Pacific appears to be fading fast according to the regional press and recent statements by Pacific officials.

GREAT has not been able to gather details of the latest meeting between Pacific and EU officials, which took place on October 21^st, but, apparently, a meeting with Karel de Gucht did not go ahead as planned (7). The negotiations have broken down over fisheries related issues, where the EU is seeking enforceable commitments on sustainable management of fisheries, and the pacific an extension of the “global sourcing” provision (8). 

It is in this context that the Sunday Samoan reported the statement of its ambassador to the EU: “I think that Plan-B has now kicked in which means we walk away from the negotiation”. The statement was made on the margins of the Eminent Persons of the African Caribbean Pacific (ACP) Group Meeting, which is meant to reflect on the grouping’s future. 

This follows an unusually public exchange of harsh words between EU and Pacific officials that had unfolded over the summer (9). “We have now said ‘let’s take a break’, there is no time frame in terms of another meeting” said the Samoan Ambassador. 

SADC

At the Joint EU-SADC EPA negotiations meetings on 19-27 September in Johannesburg, three rendezvous clauses were concluded on competition, government procurement and services & investment. Agreement seems also to be almost completed on the standstill clause. The negotiations on remaining unresolved issues continued last week (8-13 November) in Johannesburg but GREAT have yet to get an update on the outcome of these. 

EU Trade Commissioner Karel De Gucht travelled to South Africa early last week (week beginning 8^th November) to meet his counterpart Trade Minister Rob Davis. According to press reports (10), the EU will offer to open its market to South African sugar, with a 320,000-tonne-a-year sugar quota. The EU will also offer to expend duty-free quota for South Africa’s wine to around 95 million litres a year. The Parties hope to be able to conclude a EU-SADC EPA by early 2013 at the latest.

Quentin de Roquefeuil is Policy Officer at ECDPM.

Footnotes

1. http://europa.eu/rapid/press-release_IP-13-1057_en.htm 
2. See http://www.inter-reseaux.org/IMG/pdf/DECLARATION_VERSION_FINALE_POSCAO_VERSION_24_OCT.pdf, author’s own translation. 
3. For more detail on the ECOWAS CET read the article in this issue and our past EPA update (GREAT Insights, Volume 2, Issue 7). 
4. http://www.cameroon-info.net/stories/0,49565,@,cameroun-union-europeenne-le-gouvernement-se-prepare-secretement-a-signer-l-ape.html
5. See http://www.camer.be/index1.php?art=29516&rub=11:1 and http://www.cameroon-info.net/stories/0,52396,@,en-fin-de-sejour-raul-mateus-paula-l-ambassadeur-de-l-union-europeenne-juge-le-c.html 
6. http://www.cameroon-info.net/stories/0,53211,@,accords-de-partenariat-economique-bientot-la-ratification-par-le-cameroun.html 
7. See http://brussels.cta.int/index.php?option=com_k2&id=8022:epa-eu-trade-talks-with-pacific-stalled&view=item&Itemid=54 
8. See our July/ August issue. 
9. Ibid.
10. http://uk.reuters.com/article/2013/11/11/uk-eu-southafrica-trade-idUKBRE9AA0DT20131111

This article was published in GREAT Insights Volume 2, Issue 8 (November 2013).