MORE AFRICAN COUNTRIES SIGN EPAs WITH EU, AS LEADERS QUARREL AT LISBON SUMMIT

More African countries have moved to sign provisional Economic Partnership Agreements (EPAs) with the EU, even as African and European leaders clashed over trade relations and human rights during a weekend summit in Lisbon.

Cote d'Ivoire initialled a goods-only EPA on 7 December, agreeing to open its market to EU imports in exchange for unobstructed access to the EU market. Madagascar and Malawi signed similar deals three days later.

By signing the accord, Cote d'Ivoire avoided the imposition of tariffs on its exports to the EU from the beginning of 2008. Malawi and Madagascar, as least-developed countries, already qualified for duty- and quota-free access to the EU, but will now gain relaxed rules of origin for their exports.

EU ministers on 10 December formally agreed to slap tariffs on the relatively richer members of the African, Caribbean, and Pacific group of countries that do not agree to similar deals by the end of the year, effective 1 January. They also said that ACP countries would have to initial EPAs with Brussels before 20 December to be sure that their exports avoid disruption.

Senegal president: Africa rejects EPAs

While trade officials from some African countries were signing trade accords, Senegalese President Abdoulaye Wade lashed out against the EPAs in Lisbon. "It's clear that Africa rejects the EPAs," he said at a conference. "We are not talking any more about EPAs, we've rejected them."

Wade warned that the imposition of tariffs could lead to a "seismic" rupture between Europe and Africa, particularly given China's growing presence on the continent as a major trading partner and source of investment, reports the Financial Times.

South African President Thabo Mbeki pushed for allowing EPA negotiations to continue past the year-end deadline.

That deadline comes from a waiver under which WTO Members agreed to let Brussels maintain its unilateral preference scheme for ACP states until the end of 2007, even after it had been ruled to violate multilateral trade rules by discriminating among developing countries.

The EU has long insisted that an extension would not be possible. It warned the 31 non-LDC members of the group that their exports would face tariffs under the less generous Generalised System of Preferences if they did not sign deals covering at least trade in goods by the end of the year. This would potentially put them in direct competition with exporters in larger developing countries such as Brazil and India.

Mandelson: Then why are countries signing?

EU Trade Commissioner Peter Mandelson was critical of both Mbeki and Wade for the comments they made at the Lisbon summit. "Both of them have absolutely nothing to lose," he told Reuters this week. South Africa would retain market access even without an EPA, since it already has a bilateral trade deal with the EU. Senegal, as an LDC, remains eligible for duty- and quota-free access, though an EPA would have simplified the rules for its exports to enter the EU market unobstructed.

"If all of Africa has rejected EPAs, why are we getting people signing?" Mandelson asked. "It's because in some cases they feel reluctantly that they don't have any alternative and don't want any trade disrupted, and in other cases because they see an opportunity."

Development campaign groups and some ACP governments complain that Brussels has used the threat of tariffs to pressure countries into prematurely signing EPAs. They fear that opening markets to EU exports could cost poor governments customs revenue and hurt local industry, and have argued that detailed goods trade agreements were not needed by the end-year deadline, as Brussels claimed.

The EPA negotiations were initially supposed to involve both regional integration within the ACP's six geographical blocs and trade liberalisation between each bloc and the EU.

However, with several countries unready or unwilling to sign agreements as the end-year deadline approached, the regional blocs have splintered, with individual countries or piecemeal groupings inking separate pacts with Brussels. A number of countries in east and southern Africa have done so, as have Fiji and Papua New Guinea (see BRIDGES Weekly, 28 November 2007). Development assistance was supposed to be a major part of the regional talks, but anti-poverty groups complain that the agreements that have been signed thus far do not include binding commitments for the EU to increase aid.

Speaking to EU ministers on 10 December, Mandelson said that most of the non-LDC members of the ACP that actually engage in significant amounts of trade with the EU - some 7 members of the Pacific group do not - had either signed EPAs or were poised to do so. Apart from Nigeria and Congo-Brazzaville, which "have shown little interest in the negotiations," he said that deals appeared to be on the horizon with Ghana, Cameroon, and Gabon. Fourteen countries in the Caribbean, as well as Zambia, an LDC, also appeared prepared to sign.

Regional integration compromised?

Notably, Mandelson said that a deal with Namibia may be possible "very soon." The Financial Times reported last week that Namibia, along with South Africa, had refused to sign an EPA, because they objected to a clause Brussels was seeking that would have required them to extend to the EU any concessions they offered as part of bilateral trade deals with other countries in the future. Unlike South Africa, Namibia faces the prospect of EU tariffs, potentially threatening to cut off 45 million euros worth of beef, grape, and fish exports.

Botswana, Swaziland, and Lesotho, the three other members of the Southern African Customs Union (SACU), have already signed EPAs. However, Christopher Stevens, a trade researcher at the Overseas Development Institute, blogged last month that SACU law prohibits members of the customs union from agreeing to preferential trade deals without the consent of others, making "a text initialled by just three of the five... unenforceable in law." Thus, the EU could theoretically still offer unrestricted market access to the three countries, but the agreement would have no legal validity in the latter.

EPAs with individual countries could "do untold damage to the progress of regional integration," warned Amy Barry, a spokesperson on trade issues for Oxfam. Countries that do not sign EPAs in regions where others have done so will be obliged to "impose stricter border controls to guard against EU goods entering their markets, leading to defensiveness between neighbours and greater barriers to regional trade," said the campaign group.

In an interview this month with Trade Negotiations Insights, EU trade chief Mandelson sidestepped questions about whether signing EPAs with individual countries would compromise regional integration. "Our objective has not changed," he said. "It is to reach full agreements with full ACP regions and so maximise the potential for regional integration. With some regions we will get further towards that objective now, with others it will take more time."

ICTSD reporting; "Africa warns of rupture over European tariffs," FINANCIAL TIMES, 10 December 2007; "Trade deals stymied at Lisbon meeting," NEW YORK TIMES, 10 December 2007; "Trade row mars EU-Africa talks," BBC NEWS, 9 December 2007; "EU refuses to budge on import duty rises," FINANCIAL TIMES, 11 December 2007; "African states refuse to join EU trade deal," FINANCIAL TIMES, 4 December 2007; "EPAs: Distinguishing what we know from what we don't know," OVERSEAS DEVELOPMENT INSTITUTE BLOG (http://blogs.odi.org.uk/blogs/main/archive/2007/11/30/5473.aspx), 30 November 2007.