FIJI, PAPUA NEW GUINEA BECOME FIRST PACIFIC COUNTRIES TO SIGN EPA WITH BRUSSELS

Fiji and Papua New Guinea (PNG) initialed 'interim' goods-only economic partnership agreements (EPA) with the EU on 29 November, the European Commission indicated last week.

Fijian officials said that the accord secures unobstructed access to the EU market, except for rice and sugar, with negotiations on issues such as services, investment and government procurement set to continue next year. It also includes improved rules of origin for fisheries, textiles and agriculture. Fiji and PNG will, over the course of the next 15 years, eliminate tariffs on over 80 percent of imports by value, with some farm, forestry, and industrial products exempt from liberalisation.

Civil society groups in the Pacific region criticised the deal. Many, like the Pacific Network on Globalisation (PANG), feel that Brussels has bullied members of the African, Caribbean, and Pacific (ACP) group of countries into signing deals that would only benefit the EU.

The EU has long warned that without EPAs by the end of the year, exports from the 31 relatively richer members of the ACP group faced being slapped with the same tariffs imposed on all developing countries, potentially putting them in direct competition with nations such as Brazil and India. PNG and Fiji faced the prospect of substantially higher tariffs on their major exports, tuna and sugar respectively, if they did not sign.

The 31 December deadline is the result of a waiver under which WTO Members agreed to let the EU maintain its unilateral preference scheme for ACP states until the end of 2007, even though it violated multilateral trade rules by discriminating among developing countries.

Fiji and PNG join the list of countries which have broken off from one of the six ACP negotiating blocs to sign EPAs (see BRIDGES Weekly, 28 November 2007). The Seychelles and Zimbabwe did so on 28 November. Mauritius initialled an interim deal on 4 December, sources say. Côte d'Ivoire appears set to sign this week, the Angola Press reports, which would make it the first West African state to do so.

It seems that the ten remaining Pacific group countries - most of which have negligible trade with the EU -- are opting to take their time considering the ramifications of an EPA. The Solomon Islands is more interested in possible free trade agreements with Australia, New Zealand and other Pacific countries.

Brussels has suggested that countries that do not sign EPAs this week might see their exports face disruption, including tariffs, even for a few weeks in January.

ICTSD reporting; "Fiji/EU sign interim partnership agreement," FIJI VILLAGE, 4 December 2007; "EPA deal in Fiji's interest-Fiji Government," FIJI BROADCASTING CORPORATION LIMITED, 4 December 2007; "Solomons Agree to Negotiate Interim Agreement," SOLOMON TIMES, 30 November 2007; "EU agrees to new trade deals wit PNG, Fiji," NATIONAL, 2 December 2007; "Fiji, PNG sign European Union agreement," FIJI BROADCASTING CORPORATION LIMITED, 26 November 2007.