EPA Update

15 December 2009

EU Ministers adopt a series of conclusions on development and external relations policies

The EU's General Affairs and External Relations Council meeting on 17 November 2009 adopted conclusions on the European Communities development and external assistance policies; on an operational framework on aid effectiveness; and on policy coherence for development.[i] This opens a variety of opportunities for advancing a joint European agenda for technical cooperation reform and calls for an action plan for policy coherence for development to be established next year.

In relation to meeting development aid targets, a European Commission (EC) report showed that so far, four countries-Denmark, Luxembourg, the Netherlands and Sweden-are above the 0.7 percent level and Ireland is above 0.56 percent. The EC Development Commissioner warned Ministers that just five of the twenty-seven Member States are on course to meet a self-imposed target of giving 0.56 percent of national income in aid to developing countries by 2010. That target was an interim benchmark on the way to a pledge agreed by the Member States that they should give 0.7 percent of gross national income in aid by 2015.

ACP Ministers agree joint WTO position and discuss EPAs

ACP Trade Ministers and the ACP Council met in November and agreed a communiqué and declaration, building on the African Ministers of Trade meeting held at the end of October, setting out their common position on all major issues to be discussed at the World Trade Organization (WTO) Ministerial Conference on 29 November-2 December. The ACP called for the multilateral trading system to support all countries in their development efforts and expressed concerns over the lack of progress in the Doha Development Agenda negotiations. They also called for negotiations to build on past agreements and urged partners to make firm commitments to provide adequate financial and technical assistance and capacity building programmes, including aid for trade.

The EC representative at the meeting indicated the bloc's frustration at the failure of the United States to fully engage in the WTO process, and noted that it is unlikely the round will be concluded before 2011 without greater involvement by the US.

The ACP Geneva Secretariat presented a document entitled "Understanding and managing the notification of Economic Partnership Agreements (EPAs) at the WTO: A manual for ACP delegations". The manual seeks to provide a better understanding of the provisions of the WTO transparency mechanism on Regional Trade Agreements (RTAs) and the procedural and substantive challenges that both the notification and examination of EPAs entail.  It highlights some of the complex issues which may be raised during the review process, such as those relating to the definition of "substantially all trade" coverage, transition periods for tariff liberalisation and the Most Favoured Nation (MFN) provisions of EPAs.

ACP Ministers noted that while it was a requirement to notify interim or full EPAs to the WTO, as they are implemented, signature is not a technical precondition for notification. The EC had insisted on signature ostensibly because this was a legal prerequisite on its part. Compliance with the current provisions of Article XXIV of the General Agreement on Tariffs and Trade (GATT) as interpreted by the EC, in terms of definition of substantially all trade and transition periods, was identified as a major stumbling block for most ACP States and regions to conclude the trade in goods part of the EPAs.

ACP Ministers were informed that the EC remains reluctant to hold the requested ACP-EU EPA Summit on the grounds that contentious issues are being resolved at a regional level.

Other issues were discussed, such as the need for a review of the Rules of Origin so that cumulation could take place at the regional and all-ACP levels, including with non‐EPA ACP States, and the creation of an ACP Ministerial Fisheries Mechanism to ensure recommendations are taken into account when major ACP-EU programs, projects and/or texts are being reviewed. Ministers will seek inclusion of language in the revised ACP-EU Partnership Agreement (the "Cotonou Agreement") to provide for ACP countries to benefit from accompanying measures to improve their competitiveness in light of the effects of tariff liberalisation. The ACP is also seeking amendments to other trade related aspects in the Cotonou Agreement's revision.

The ACP Council elected Dr. Mohamed Ibn Chambas, current Secretary General of the Economic Community of West African States (ECOWAS) Secretariat, to be the next ACP Group Secretary General from 1 March 2010-1 March 2015.

Progress in West Africa-EU talks on development issues. More negotiation necessary on market access

West African and EC technical and senior officials met in Abidjan from 10-13 November and agreed the text of the articles that will be included in the EPA agreement relating to development. These will include a commitment by the EC and its Member States to mobilise the necessary financing for implementing the development dimension of the EPA and to seek complementary financing from other donors.  There is also a commitment to create financing mechanisms should the Cotonou Agreement expire. A Joint EPA Council will seek synergies between the rhythm of the implementation of tariff liberalisation commitments taken by West Africa and the advances obtained in the implementation of the EPA Development Programme (EPADP), including mobilisation of financial resources and the improvement of competitivity and production capacities in the region.

The two sides also considered West Africa's revised market access in goods offer which offers tariff liberalisation for 67 percent of the region's goods and calls for up to 25 years transition periods for some products. The EC called on the West Africans to further refine the offer towards reaching a liberalisation threshold of 70 percent coverage of tariff lines and volume and for some products to be liberalised faster.

Negotiations were planned to continue in December; however, an ECOWAS-EC meeting scheduled for 7-11 December in Cotonou, Benin, has been postponed.

Central Africa-EU negotiations postponed again

Central African meetings that were scheduled to be held from 9-13 November to prepare for a December round of EPA negotiations with the EU were postponed. The joint technical level negotiations with the EC have, therefore, also been postponed.  Delays are largely due to difficulties in finding mutually convenient dates for preparatory meetings in the region because of elections being held in Congo, Gabon and Equatorial Guinea. A new joint calendar of meetings will be agreed for the first quarter of 2010.  There have been no joint negotiating meetings since February.

East and Southern Africa consultations ahead of December ministerial meeting

The East and Southern Africa (ESA) Group's chairperson, Zambian Trade Minister Felix Mutati, has been travelling to countries in the region with a view to identifying the challenges and narrowing the differences among those countries that have not yet signed the region's interim EPA (IEPA) with the EU. "Time is running out as per our commitment to sign this year, but there are still differences in perspectives, hence the need for patience.  If we rush to sign, we may not get the outcome we want and we don't want to use time as a pressure point especially when dealing with sovereign states because countries are also consulting their citizens and these processes take time," Mutati reportedly said.[ii] Mutati also said that the development dimension (ensuring supply side constraints are addressed), and not market access, must be the basis of EPA negotiations with the EU.  A ministerial meeting of the ESA group is scheduled to be held on 7 December to take stock of the ESA Chair's consultations and provide guidance to negotiators on the way forward.

East African Community-EC to meet in December to resolve outstanding issues

Outstanding issues to be resolved before signing an initialled EAC-EU Framework EPA, which includes the use of safeguards and export taxes and MFN clause provisions, will be negotiated from 2-11 December at a EAC-EC-EPA senior officials meetings. Trade in services remains an unresolved issue holding back further negotiations towards a full EAC-EC EPA.[iii] The EAC region is seeking a common regime on trade in services before negotiating commitments with the EU in this area.

Southern African Development Community-EC EPA meetings postponed to next year

The scheduled round of Southern African Development Community (SADC)-EC experts, senior officials and ministerial negotiations scheduled to be held on 23-27 November was postponed to allow further preparation on the SADC side.

Senior SADC EPA officials met in Gaborone on 18 November, marking the first major engagement among SADC EPA States since the signing of the interim EPA (IEPA) by Botswana, Lesotho, Mozambique and Swaziland (BLMS) in June. Officials discussed the status of ratifying and implementing the IEPA and work carried out at the technical level on how to resolve the outstanding negotiating issues that prevented the other three countries (Angola, Namibia and South Africa - ANSA) from signing the IEPA. Officials also discussed the way forward with respect to finalising the EPA, considering in particular issues relating to MFN, definition of parties, agriculture safeguards, inclusion of services and investment. There were a number of very sensitive issues discussed, which relate to the notification of the IEPA to the WTO and provisional application of the agreement, as well as the question of how Namibia, who is mentioned as a party to the IEPA, but has not signed it, will be treated. The EC has indicated that Namibia should either sign the IEPA or a declaration should be issued saying that Namibia is neither subject to the obligations nor the rights of the agreement. A common SADC EPA position must be formulated on this as ANSA countries refuse to sign the IEPA in its current form and the BLMS continue with the process of ratifying and implementing the IEPA.

Details on Southern African Customs Union (SACU)-South Africa Trade and Development Cooperation Agreement tariff alignment to preserve SACU tariff preferences; rules of origin harmonisation; and other unresolved issues are still to be dealt with by the Joint SADC EPA-EC Council.

A next meeting of SADC EPA Senior Officials is scheduled to take place in February next year, after which a formal meeting with the EC can be held.

Southern and Eastern African trade blocs agree Free Trade Area roadmap

The Chief Executives of COMESA, EAC and SADC met in Dar es Salaam on 9 November and agreed the legal documents and next steps required for the Tripartite Free Trade Area (FTA) for the 26 countries of these regional groupings planned for 2011. The FTA is intended to ensure a fully integrated and internationally competitive regional economic community. The documents have been transferred to the member states for consideration in preparing for the next meeting of the Tripartite Summit to be held in April or May 2010.

First meeting of the Joint Council of the CARIFORUM-EC EPA delayed again

The delay is partly due to scheduling difficulties, but also to the fact that the Caribbean Community and Common Market (CARICOM) and the Dominican Republic have yet to resolve their differences over the setting up of an EPA Coordination Mechanism.[iv] The Dominican Republic is a member of CARIFORUM (Caribbean Forum of African, Caribbean and Pacific States) which officially signed the EPA with the EU, but is not yet a member of CARICOM. By now the Caribbean had hoped to establish a six-member agency for coordinating and implementing the agreement. Secretary General Edwin Carrington says they are hoping to have the matter resolved by year-end. United Kingdom Minister of State with responsibility for Africa, the Caribbean and Central America, Glenys Kinnock, also hopes that EPA implementation will be speeded up.[v] "The concern that I have is that the implementation process is progressing very slowly and we do need to see more coordination and coherence directed, of course, by CARIFORUM, in order to ensure that things can move ahead," she said. "It is a very challenging set of issues, but I think it is important that now that the EPA is signed and agreed that things can move forward and the funding can be used in a positive way for the benefit of the citizens of the Caribbean."

The EU Council in November adopted three decisions on the creation of a Joint CARIFORUM-EU EPA Council.[vi] The decisions concern EU positions on: the rules of procedure; the trade development committee and special committees provided for by the EPA; participation in the CARIFORUM-EU consultative committee and the selection of the representatives; and on the Rules of Procedure for Dispute Settlement and the Code of Conduct for Arbitrators and Mediators.[vii]

The new Director-General of the CARICOM Office of Trade Negotiations, Gail Mathurin, was formally introduced to the Caribbean on 16 November.[viii] She said that her office was working closely with the EPA Implementation Unit to ensure that arrangements were in place for the execution of the EPA.

On 9 November, more than a year after the Bahamas signed the Caribbean-EU EPA, the country's services offer to be annexed to the agreement was agreed with the EC.[ix] According to the Bahamas Minister of State for Finance Zhivargo Laing, all sectors reserved for Bahamians in the National Investment Policy are protected in the EPA. Under the National Investment Policy thirteen sectors are exclusively reserved for Bahamians, including the wholesale and retail sector; commission agencies engaged in the import/export trade; real estate and the domestic property management agencies and public relations firms; nightclubs and restaurants except specialty, gourmet and ethnic restaurants and restaurants operating in a hotel; security services; distribution of building supplies; and construction companies. EC officials are expected in the country in December or January to formally sign and annex the offer to the EPA.

Haiti signed the Cariforum-EU EPA on 11 December 2009, thus joining the 14 Caribbean states that signed in October 2009.

OECS Heads of Government meeting in November pledged to sign a new trade treaty before year-end aimed at facilitating the creation of a single economic space within the nine-member grouping.[x]

Fiji signs Interim EPA

On 11 December 2009, Fiji signed the trade and development Interim EPA, initialed in November 2009.

Melissa Julian is Knowledge Management Officer at ECDPM.

[i] "EU Council conclusions on European Community's Development and External Assistance Policies". 17 November 2009.

http://tinyurl.com/yhkcz44

and

"EU Council conclusions on an Operational Framework on Aid Effectiveness". 17 November 2009.

http://tinyurl.com/yza92gk

and

"EU Council conclusions on Policy Coherence for Development (PCD)". 17 November 2009.

http://tinyurl.com/yf8nyuu

[iii] "Trade in services holds back EAC-EU EPA deal". 20 November 2009.

http://www.tralac.org/cgi-bin/giga.cgi?cmd=cause_dir_news_item&cause_id=1694&news_id=78023&cat_id=1026

[iv] No agreement on Caribbean EPA coordinator. BBC. 17 November 2009

www.bbc.co.uk/caribbean/news/story/2009/11/091116_pmbriefs.shtml

[v] "UK Minister expresses concern at the slow implementation of Caribbean EPA support". The Gleaner (Jamaica). 26 November 2009.

http://www.jamaica-gleaner.com/gleaner/20091126/news/news1.html

[vi] "EU Council adopts two decisions on the creation of a joint Cariforum-EU Council". EU Press Release. 16 November 2009.

http://www.consilium.europa.eu/App/NewsRoom/loadDocument.aspx?id=349&lang=EN&directory=en/gena/&fileName=111231.pdf and Participation in the CARIFORUM-EC Consultative Committee provided for by the Economic Partnership Agreement with the EU. EU Council Decision. 10 November 2009.

register.consilium.europa.eu/pdf/en/09/st14/st14872.en09.pdf

and

"Rules of Procedure of the Joint Caribbean-EU Trade and Development Committee and the Special Committees of the Economic Partnership Agreement". 10 November 2009.

register.consilium.europa.eu/pdf/en/09/st14/st14871.en09.pdf

[vii] Dispute Settlement and the Code of Conduct for Arbitrators and Mediators provided for by Caribbean-EU Economic Partnership Agreement. EU position. 18 November 2009.

EU Council adoption on 23 November 2009, see: http://www.consilium.europa.eu/App/NewsRoom/loadDocument.aspx?id=356&lang=EN&directory=en/envir/&fileName=111411.pdf. register.consilium.europa.eu/pdf/en/09/st14/st14870.en09.pdf

[viii] "New Director-General of CARICOM Office of Trade Negotiations presents trade priorities for the region". Caricom press release. 16 November, 2009.

www.caricom.org/jsp/pressreleases/pres436_09.jsp

[ix] "Bahamians still come first", The Guardian (Bahamas), 18 November 2009.

http://www.thenassauguardian.com/bixex/373893090531334.php

[x] "OECS leaders have pledged to sign a new trade treaty before year-end". BBC. 23 November 2009.

www.bbc.co.uk/caribbean/news/story/2009/11/091123_nibam.shtml

This article is published under
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