SEATINI Articles

In the Free Trade Agreement (FTA) negotiations between the European Union (EU) and African Caribbean and Pacific (ACP) states the EU has been pressing for a comprehensive Economic Partnership Agreement (EPA) to be signed by the 31st of December 2007. It used all sorts of threats including threatening that there was no way that the EU would maintain preferential market access of ACP goods upon the expiry of the waiver on 31 December. Though analysis has shown that the GSP+ would be a legal alternative where many countries would qualify if there was enough political will, the EU insisted that the GSP+ could only be applied for in 2009 leaving the only alternative being the GSP. After realizing that no ACP state would be ready for a comprehensive EPA by 31 December, the EU then lately offered a two step EPA that would involve an interim EPA which would be signed to act as a provisional agreement as negotiations proceed until December 2008.

It was suggested that the interim agreement would cover only trade in goods and other sensitive elements such as trade in services or measures to strengthen competitiveness would be negotiated in a second stage in 2008 . The interim agreement was criticized for not covering the development concerns of ACP states. It was also pointed that there was a danger that the interim EPA would be the final EPA given that there would be no much imperative on both parties to further negotiate. As we approach the deadline many countries have signed the interim agreement in both SADC and the ESA groups and some are expressing doubt of signing.

The SADC EPA comprised South Africa, Botswana, Namibia, Lesotho, and Swaziland, Mozambique, Angola and Tanzania. Tanzania later moved to negotiate with the EAC under ESA after 11 October 2007.

August 2008 update
Negotiations towards a comprehensive EPA are taking place with South Africa included, the negotiation climate in the talks has improved and the EC appears to have a
better understanding of the concerns of Angola, Namibia and South Africa. Reportedly, parties have almost reached agreement on the SACU market access offer that was presented to the EU on 27 June 2008, with some outstanding issues notably on agriculture. Outstanding issues further include an emergency safeguard mechanism, MFN and standstill clauses. On services and investment chapters, the EC presented a draft text; SADC is still preparing for negotiations in these areas. SADC plans to liberalise one services sector per country and is in the process of identifying these. Discussions on the concerns of Angola, Namibia and South Africa took place at the level of chief negotiators. In parallel, the SADC Free Trade Area was launched at a SADC Summit on 17 August 2008.

The SADC was reported to be working towards the 15 November deadline to have concluded the negotiations. The SADC EPA was criticized to be more of a South African EPA than SADC EPA. However South Africa indicated lately that it would not sign any new trade pact with the EU unless its possible impacts on Africa are addressed. The interim agreement was signed in late November by only four SADC states, that is, Botswana, Lesotho, Swaziland and Mozambique. South Africa argued that the EPA had possible detrimental impacts on Africa which need to be addressed. Namibia through its minister of trade Immanuel Ngatjizeko argued that accepting the EPA would pre-empt the SADC negotiating space as EPA-plus preferential treatment would be accorded to the EU without any further concession from the EU side . The demand for the Most Favoured Nation Treatment (MFN) in future FTAs was sited as one of the causes for the refusal of some SADC states to sign the interim EPA. Namibia, however signed on the 12th of December on the understanding that its concerns will be addressed through the negotiations towards a comprehensive EPA. Angola is expected to join the EPA in due course.

The ESA comprised Burundi, Comoros, Djibouti, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Uganda, Zambia, and Zimbabwe .It got divided as the EAC [Rwanda, Burundi, Uganda, Kenya and Tanzania (which was part of SADC)] decided to go it alone following an agreement on October 11. The EAC signed the interim EPA on the 27th of November 2007. The IOC which comprises Comoros, Madagascar, Mauritius and Seychelles had also decided to go it alone.

August 2008 update
Negotiations with the EC towards a full agreement are taking place, both in the ESA and the EAC configuration. In March 2008, ESA countries had announced that they were going to continue negotiations with the EC as a collective body of 16 countries. Accordingly, EAC countries participate in ESA meetings, but they are holding separate EAC-EC negotiations in parallel.The last ESA-EC negotiation round took place in June 2008. It is reported that, on market access in goods, discussions are still taking place, on liberalisation commitments, on which ESA is expected to submit a proposal. Other outstanding issues include the MFN clause, export taxes, standstill clause and bilateral safeguards. Detailed discussions are taking place on rules of origin and agriculture. On services, negotiations are taking place based on text proposals by both parties. On development cooperation, discussions focus on implementation of the development chapter in the interim agreement. On trade related issues, negotiations are going on.
Next ESA-EC meetings are planned in the second half of September.
Next EAC-EC negotiations are scheduled for 16-18 September 2008.
COMESA, EAC and SADC are planning a tripartite summit in October to discuss
the harmonization of trade in the region.December 2007

Despite the divisions, each country is signing on its own, Mauritius, the Seychelles, Zambia and Zimbabwe have agreed to the interim EPA, though Zambia has opted to be out of the key trade provisions . Madagascar, Malawi and Zambia then signed on 10 December 2007. The EU still expects Comoros, to sign soon and it is not certain if Djibouti, Eritrea, Ethiopia and Sudan will join.

August 2008 update
After the initialling of a comprehensive EPA by the EC and all CARIFORUM countries, the signing ceremony has been postponed several times. This was due to different reasons, such as time needed for technical preparations of the final document, WTO negotiations that conflicted with the date of EPA signature, and recently the announcement of some Caribbean countries (Guyana, St. Lucia; Grenada also undertaking a review) to hold consultations before signing. Currently, Caribbean Heads of Government are expected to meet on 8 September to discuss the signature of the EPA. (By this date, national consultations in Guyana are expected to be completed.) Signature might then take place later in September (previously announced to take place on 2 September.)

August 2008 update
After initialling of the interim agreement by Cameroon only, negotiations with the EC towards a comprehensive EPA are being held at regional level. The last negotiation round took place in July 2008. On trade in goods, reportedly a joint text exists based on draft texts proposed by both sides, with outstanding issues including the MFN clause, export taxes, specific import taxes to finance the regional organisations, accompanying measures and safeguard clauses. The market access offer tabled by Central Africa in July includes liberalisation of 71% of imports over 20 years with a 5 year preparatory period. The EC demands liberalisation of 80% over 15 years. On trade in services, Central Africa has reportedly tabled a provisional market access offer. (It still needs to integrate lists from Equatorial Guinea or Sao Tomé and Principe and member states need to validate the offer). Central Africa submitted a request on services to the EC in May; the EC has asked the region to prioritise among the demands made.The text of the development chapter was not discussed in detail in July due to lack of time. An RPTF held on 17 July reportedly made progress on the establishment of the regional EPA fund (FORAPE). The BDEAC will be charged with managing the FORAPE and is currently undergoing a process of reform. The next technical negotiation round is scheduled for 29 September - 7 October 2008.

August 2008 update
After the initialling of interim agreements with the EU by Papua New Guinea and Fiji, negotiations towards a full EPA are continuing at the regional level. PACP leaders met on 19 August (before the Pacific Forum leaders meeting) and underlined their commitment to conclude a comprehensive EPA by the end of 2008 and stressed that the EPA should reflect the differing circumstances and economic interests of all the PACPS and deliver significant benefits to all of them. An exchange of letters took place between PACP spokesperson Hans Joachim Keil and Commissioner Peter Mandelson in July. For EPA negotiations in 2008, Keil reportedly requested to focus on finalising outstanding issues including trade in goods, fisheries and development. Negotiations on trade in services and most trade-related issues should be suspended and addressed at a later stage in the future. EU sources indicate that Mandelson continues to stress the importance of services and investment for development. However, the EU is aware that some PACP countries may not be able to make commitments in these areas. Mandelson, therefore, suggests continuing negotiations with all PACP countries on jointly agreed issues and allowing those which so desire to make commitments on services and trade related issues. PACPs are currently preparing a response to Mandelson before the next negotiation meetings planned for 15-16 September 2008. The conclusion of interim agreements (and the planned full EPA) with the EU is likely to trigger negotiations with Australia and New Zealand under PACER. An informal meeting of PACER trade officials in this respect took place in May.

References
Rampa Fransesco. The EU offers a two step EPA: where does development stand? In Trade negotiations insight Vol.6.No.7.p.1
SA holds back on signing trade pact with EU
Kakololo Emmah. EU backtracks say government (Namibia).
ESA configuration for the negotiations; in Cost of EPA related adjustments, European research office, 2006
http://www.ictsd.org/weekly/07-11-21/story2.htm