EPA UPDATE

4 April 2011

Central Africa and EU resume EPA negotiations

Central African and European Union (EU) technical experts resumed EPA negotiations in three working group meetings - market access, rules of origin and customs issues; services and investment; and EPA accompanying measures - held from 31 January to 4 February in Brussels, ending a two-year pause in negotiations. The European side was headed by a new team of negotiators from the European Commission's (EC) Directorate General for Trade.

The Working Group on market access developed a list of goods representative of "sensitive economic sectors" elaborated with a set of development criteria in mind. The EU reportedly agreed to drop the inclusion of the controversial Most-Favoured Nation (MFN) clause and confirmed that it would not seek to establish a standstill clause. On services, the group made progress on the EPA text. The working group on accompanying measures focused on the net fiscal impact of the EPA as well as on a methodology and a calendar for the elaboration of the joint orientations document. The two sides also agreed on an overall EPA negotiations roadmap for the year.

No progress in West Africa-EU EPA negotiations

No West Africa-EU EPA negotiations have been held since September 2010. The Economic Community of West African States (ECOWAS) and West African Economic and Monetary Union (WAEMU) Commissions have been focused on ongoing regional peace and security issues including the disputed Côte d'Ivoire election that has resulted in the suspension of the country from all ECOWAS decision-making bodies.

The ECOWAS Heads of State and Government summit scheduled for the week of 14 February was postponed. A new date is yet to be announced. The summit and a meeting of the West Africa Regional EPA Ministerial Monitoring Committee should provide guidance on the politically sensitive issues that have stalled the EPA negotiations to date.

No date has yet been set for the next round of EU-West Africa technical level negotiations.

East and Southern Africa region preparing for next round of EPA negotiations with the EU

There have been no further negotiations with the EU since the technical level meetings held in Harare in December 2010. No date has yet been set for the next round of EU- ESA technical meetings scheduled to be held in March. National and regional consultations on a number of EPA issues are currently being undertaken in East and Southern Africa (ESA).

East African Community agrees EPA negotiations roadmap

East African Community (EAC) EPA negotiators met in Nairobi from 2-4 February and agreed on a roadmap for the negotiation of a comprehensive EAC-EU EPA in 2011.  This roadmap outlines the priorities for negotiation - such as market access, economic and development cooperation, agriculture, trade-related issues including trade in services - and sets up a negotiating timetable. Ongoing regional discussions are currently taking place to formulate strategies to move the negotiation process forward. Technical level negotiations with the EU are scheduled to start in March although no exact dates have yet been confirmed.

SADC -EU EPA negotiations delayed

The Southern African Development Community (SADC) EPA Group and EU senior officials negotiations scheduled for the end of February were postponed.  The response to SADC's request for tariff concessions that is still under consideration at the EU (mainly in relation to South Africa's agricultural market access)  has caused this delay. The negotiations also require reciprocity; therefore the EU also needs to propose its interests for enhanced market access to the Southern Africa Customs Union (SACU) market. Sources indicate that the EU's response and counter-offer are now expected for mid-March.

In addition, the EU is preparing proposals related to trade issues and geographical indications to put to SADC EPA Group negotiators for consideration. SADC has indicated that it is ready to consider only "cooperative agreements" on trade-related issues such as investment, competition and procurement, without legal obligations and without any pre-commitment to negotiate these in future. However, with respect to geographical indications, the EC would welcome SADC going beyond cooperation. This is likely to introduce a new obstacle to concluding the negotiations according to regional sources.

SADC indicated that it will need one month to consider the EU's proposals and prepare for negotiations. Technical and senior level negotiations are tentatively scheduled to be held in Lesotho between mid and end-April.

Caribbean begins EPA tariff liberalisation

CARIFORUM states have started tariff liberalisation since January 2011 under the terms of the Caribbean Forum of African, Caribbean and Pacific States (CARIFORUM)-EU EPA.(1) In January, Guyana became the first Caribbean country to take the necessary legislative steps to implement the EPA tariff reductions when the Guyanese National Assembly passed the Customs Duty (Amendment) Order 2011 amending the Customs Act to include the EPA schedule of tariff rates.(2) St. Kitts & Nevis has also provided for initial EPA tariff reductions.(3) According to the Jamaican Minister of Foreign Affairs and Foreign Trade, Hon. Dr. Kenneth Baugh, a draft has been prepared to amend the relevant sections of the country's Customs Act and is being reviewed for submission to Parliament.(4)

At their meeting in Grand Anse on 25-26 February, Caribbean Heads of Government noted a loss in momentum in the regional integration agenda and agreed on the need to reassess approaches to determine modalities so as to re-energise the regional integration endeavour.(5) Heads agreed to hold a retreat before their next meeting in July to discuss the way forward for CARICOM. Heads of Government also reiterated the importance of the CARICOM Single Market and Economy (CSME) as a platform for the organisation of production and the development of global competitiveness. The Council for Finance and Planning has been mandated to review the constitutional elements and advise on the feasibility of the timelines for the Single Economy completion.

The first meeting of the European Delegation to the CARIFORUM-EU Parliamentary Committee was held in Brussels on 1 February. The Caribbean-EU Economic Partnership Agreement provides for the creation of a CARIFORUM-EU Parliamentary Committee whose main task is to monitor the application and management of the agreement. It can request from the Joint CARIFORUM-EU Council specific relevant information regarding the implementation of the Agreement and make recommendations to the same Council, as well as to the CARIFORUM-EU Trade and Development Committee. The European Members of Parliament were informed that the European Parliament's President wrote to all Caribbean parliaments inviting them to designate 15 representatives for the Joint Parliamentary Committee (one per country). The President also proposed to hold the first joint meeting on 15-16 June in Brussels.

EU Trade Commissioner Karel De Gucht provided members with a summary of achievements stating the application of EU market access commitments and bottlenecks (including delays on the CARIFORUM side to appoint Joint Trade and Development Committee representatives) in the Caribbean-EU EPA implementation. Commissioner De Gucht also informed members on the state of play in other EPA negotiations saying that now is the time to see how political messages translate into real action. The European Economic and Social Committee also met on 1 February in Brussels to discuss the composition of the CARIFORUM-EU Consultative Committee membership.(6)

Pacific ACP States aim to conclude EPA by end 2011

A Pacific ACP Trade Ministers meeting (PACPTMM), the first of its kind since June 2009, was held after a three day meeting of trade officials in Apia from 3-4 February to review the progress made in the negotiations thus far and plan future movement in EPA negotiations.

Participants considered a number of issues, relating inter alia to the EPA market access offers, key contentious and outstanding issues in the negotiations, rules of origins in the fisheries sector, as well as development cooperation.  Upon reviewing the negotiations to date, Ministers agreed to continue negotiating as a single region for a comprehensive EPA with the EU.  Ministers adopted a PACP EPA 2011 Strategy that outlines a number of options and strategies for moving the negotiations forward and includes a commitment to conclude negotiations by the end of the year. While this is  an ambitious timeline for some observers(7), it instils new momentum, confesses a source close to the negotiations. Recognising the rigorous schedule for the EPA negotiations, PACP states agreed to prioritise EPA-related activities and meetings over other regional trade negotiations.

The PACPTMM took place in a context of significant controversy and allegations by Papua New Guinea (PNG) about the capacity of the Pacific Island Forum Secretariat (PIFS) to efficiently manage the negotiation process as well as regional political developments.  Concerned about the slow progress in the negotiations  and potential conflict of interest by those in charge of managing the negotiations within the PIFS, some PACPS have expressed an increasing lack of confidence  in the ability of PIFS to look after the interest of the 14 PACP states, who are also part of the 16 member Forum(8) grouping.  Additionally, on May 2009, the Forum leader decided to exclude Fiji from meetings organised by the Forum, including PACP EPA meetings at Ministerial level.  This was the key reason why PIFS did not convene any PACP ministerial meetings in 2010. It resulted in the formal proposal by PNG to relocate the management of the EPA negotiations process and related Economic Development Fund (EDF) resources to the Office of the Chief Trade Adviser (OCTA)(9).  This proposal did not attract support from all the PACPS but could be reviewed at the next PACP Trade Ministers' meeting,  on the 29 July in Port Moresby(10). Many PACPS wanted further issues to be considered and all parties to be consulted on this proposal, which they feared could lead to further delays in the EPA negotiations.

At the conclusion of the PACPTMM, Tonga's Minister for Labour, Commerce and Industries, Honourable Lisiate 'Aloveita 'Akolo, has been appointed EPA Lead Spokesperson for PACP negotiations with the EU(11).

Authors:

Melissa Julian is ECDPM Knowledge Management Officer; Melissa Dalleau is ECDPM Junior Policy Officer Economic and Trade Cooperation; Quentin de Roquefeuil is ECDPM Research Assistant Economic and Trade Cooperation

Notes:

Phasing of tariff liberalisation on European Union goods. JamaicaObserver. 26 January 2011. http://www.jamaicaobserver.com/columns/Phasing-of-tariff-liberalisation-on-European-Union-goods_8315707#ixzz1DPeRt7D8

Give pragmatic Guyana its due. JamaicaObserver. 9 February 2011. http://www.jamaicaobserver.com/editorial/Give-pragmatic-Guyana-its-due_8344282#ixzz1DUAlgtzM

Cariforum States urged to expedite first EPA reductions. Caricom. 21 January 2011. http://www.caricom.org/jsp/pressreleases/pres19_11.jsp

Jamaica crafting project for Economic Partnership Agreement grant. Jamaica Information Service. 21 February 2011. www.jis.gov.jm/news/105-leads/26866

5 The Twenty-Second Inter-Sessional Meeting of the Conference of Heads of Government of the Caribbean Community, 25-26 February 2011.  http://www.caricom.org/jsp/communications/communiques/22inthgc_2011_communique.jsp

6 See the ECDPM Talking Points blog for further information from these two meetings.

7 EPA 2011 roadmap ‘ambitious and unrealistic', Makereta Komai, http://www.pina.com.fj/?p=pacnews&m=read&o=323661844d4b700db4fd3b9508c88e&PHPSESSID=226189d178cb35ccce359e838f3dd02e

8 The 14 PACPS plus Australia and New Zealand.

9 PNG paper still on agenda on trade ministers meeting, Papua New Guinea Blog. See also, Letter from Suva, Anger over leaked paper, Laisa Taga, http://www.islandsbusiness.com/islands_business/index_dynamic/containerNameToReplace=MiddleMiddle/focusModuleID=19567/overideSkinName=issueArticle-full.tpl

10 PACPS give PIFS five months breathing space on EPA negotiations, Island Business, 7 February 2011, http://www.islandsbusiness.com/news/index_dynamic/containerNameToReplace=MiddleMiddle/focusModuleID=130/focusContentID=22525/tableName=mediaRelease/overideSkinName=newsArticle-full.tpl

11 Tongan Minister new Pacific ACP Lead Spokesperson. Pacific Islands Forum Secretariat. 7 February 2011. http://www.forumsec.org/pages.cfm/newsroom/press-statements/2011/tongan-minister-akolo-new-pacific-acp-lead-spokesperson.html

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