Fisheries trade relations between the EU and ACP countries are governed by World Trade Organization (WTO) provisions, as well as those of the Cotonou Partnership Agreement (CPA) between the EU and ACP countries. These relations are undergoing a period of change, with the negotiation of new economic partnership agreements (EPAs) that will replace current unilateral trade preferences offered by the EU with reciprocal preferences. The ACP-EU EPA negotiations have given rise to concerns about potential loss of preferences that could result in a significant decrease of export revenues for ACP countries. Other issues of concern for ACP countries relate to tariff escalation and tariff peaks, reforming rules of origin, and the implications of EU regulations on sanitary and phytosanitary (SPS) measures. The inclusion of investment in the negotiations brings a new dimension that warrants careful consideration.

The continuation of uninterrupted market access for fish and fish products was a primary motivation for several ACP countries to agree to initial interim economic partnership agreements (IEPAs) or to agree to full EPAs with the European Community at the end of 2007. In certain cases a specific fisheries chapter was included in a regional IEPA/EPA. This was the case for the East African Community (EAC) and Eastern and Southern Africa (ESA) IEPAs, and similarly for the chapter on agriculture and fisheries in the Caribbean EPA (CARIFORUM). In other cases, fisheries were part of bilateral IEPAs between the EU and certain non-least developed countries (LDCs) in the ACP. This was the case for Côte d’Ivoire and Ghana, as West Africa did not come to an agreement with the European Community on a regional EPA at the end of December 2007.

The process of negotiating EPAs, including negotiations on rules governing trade and market access for fish and fish products, has been complex, challenging and divisive for the ACP groupings. At present, ACP groups yet to finalize their negotiations with the European Community are under pressure to do so. In regions that have already initialled an interim agreement, a number of questions subject to possible renegotiations remain. Overall, there is an urgent need for regions with IEPAs to ensure satisfaction with fisheries provisions already negotiated, and for regions without interim EPAs to learn from others in order to better articulate their positions in the process of negotiating full EPAs.

In response to these concerns, the International Centre for Trade and Sustainable Development (ICTSD) is initiating a process of analytical review of negotiations on fisheries under the EPA negotiations. This effort seeks to provide a better understanding of the substance of the provisions contained in IEPA/EPA agreements and to assess their significance from a trade, livelihood and sustainable development perspective.

As part of this process, this study is intended to be a practical tool for national and regional policymakers and stakeholders. It is meant to contribute to enhancing preparedness for negotiations of full EPAs such that the outcome contributes effectively to improving livelihoods and food security, ensuring meaningful market access, and achieving broad sustainable development objectives in ACP countries.

Liam Campling is currently a PhD candidate in development studies at the School of Oriental and African Studies, University of London. His research examines the global commodity chains in canned tuna (centred on the EU and US), with a focus on their developmental relationship with Fiji and Seychelles.

He has published on development in small island states, the politics of international trade relations and commodity studies in the Journal of Developing Societies, the Journal of Agrarian Change (with Henry Bernstein), Sustainable Development (with Michel Rosalie), Island Studies Journal (with Elizabeth Havice) and Development Policy Review (with Jesper Nielson and Stefano Ponte). He is on the editorial board of the journal Historical Materialism and is reviews editor of the Journal of Agrarian Change. Since November 2007 he has been consultant trade policy analyst to the Pacific Islands Forum Fisheries Agency (FFA). He has also worked as a consultant for the Common Market for Eastern and Southern Africa (COMESA), the Commonwealth Secretariat, the Center for the Development of Enterprise (CDE), the governments of Mauritius and Seychelles, the Pacific Islands Forum Secretariat, the Regional Trade Facilitation Programme and United Nations Research Insitute for Social Development (UNRISD). He previously taught international politics and history on the University of Manchester Twinning Programme, Seychelles Polytechnic.

This paper is part of ICTSD’s project on fisheries, trade and sustainable development, which aims to foster an inclusive and informed process for crafting multilateral, regional and domestic trade rules and policies in the fisheries sector that are supportive of sustainable development.

GSP wrongly in the shade of EPAs?

In recent months public discussion has focused on negotiation of Economic Partnership Agreements (EPAs) between African, Caribbean and Pacific countries (ACP) and the EU, leaving other preferential trade options as notes in the margin. This is somewhat surprising, given that since the summer of 2007 it appeared obvious that the conclusion of these full agreements with all ACP regions was very unlikely to happen by the end of that year. Yet EPAs were deemed necessary after the specific preferential treatment to ACP countries provided under the Cotonou Agreement had been ruled as non WTO-compliant. But article 37 of the Cotonou Agreement, explicitly stipulates that the EU will examine all alternative possibilities in order to provide non-least developed countries (LDCs), that are not in the position to enter into EPAs, with a new framework for trade that is equivalent to their existing situation and conforms to
WTO rules.

One could presume that the European Commission, the single negotiator on behalf of EU member states, actually did not want to consider alternatives. Europe already has instruments that can provide a basis for such options: more than 35 years ago the Generalised System of Preferences (GSP) for developing countries was implemented and has regularly been advanced and adjusted since. Today, the EU’s non-reciprocal preferential access scheme is the most used of all such developed country systems and grants a number of products imported from beneficiary countries either duty-free access or tariff reductions, depending on which of the GSP arrangements a country enjoys.2 

For 2006-2008, there are three types of general preferential trade regimes in force:

a) The standard preferential regime (GSP) benefits all recipient countries and grants duty-free market access (for non-sensitive products) or tariff reductions on the most favoured nation rate (for sensitive products).

b) The special incentive arrangement for sustainable development and good governance (GSP+) provides additional benefits for countries implementing certain international standards in human and labour rights, environmental protection, the fight against drugs and good governance.3 It also allows duty-free market access for products classified as ‘sensitive’ imported into the EU.

c) The special arrangement for the countries included in the United Nation’s list of least developed countries, which is known as the ‘Everything but Arms’ initiative (EBA), provides the most favourable treatment of all. It grants LDCs duty-free and quota-free access to the EU markets 
for products excluding arms and ammunition with transition periods until 2008 and 2009 for rice and sugar.

Mini-reform of GSP

It is expected that the new European Commission regulation for GSP envisaged for the period 2009-2011 will maintain this structure. The revision proposed by the Commission includes: removal of certain products for specific countries based on the value of the imports from these countries; a three-month postponement of the tariff reduction scheme for sugar under EBA; required completion of the ratification and implementation of international conventions before the application for GSP+ (the 2005 regulation included a three year transitional period); and prolongation of the time that the Council will have - from one month to two - for the assessment of a preference withdrawal proposal by the Commission.

While the Commission saw the revision as a basic technical adjustment, the European Parliament added some substance that it had already proposed for the GSP guidelines for 2006-2015 that was not taken into consideration by the Council at the time. These proposals aimed at incorporating greater transparency, clarity and legal certainty.

Above all, the Parliament stressed that the GSP scheme is designed with the aim of supporting the Millennium Development Goals and particularly the reduction of poverty in developing countries. It therefore needs comprehensive impact analysis that includes opinions from civil society; broader distribution of information to the public; the prevention of preference erosion by transferring products currently classified as sensitive to the non-sensitive category; and a possibility for countries to apply for GSP+ on a yearly basis (instead of only every three years). The latter might be a compromise solution since, as of 2008, there is no longer any transition period that allows a country that has almost, but not fully, completed implementation of all 27 international conventions mentioned in the annex of the specific incentive arrangement to be included into the GSP+ system.  

One of the Parliament’s most pressing requests was the reform of overly complex rules of origin which were hampering the uptake and use of preferential trade schemes such as GSP. Some argue that rules of origin should take into account inter-regional and global ‘cumulation’  when calculating the possibility of a country benefiting from preferential treatment. Such an approach would facilitate regional integration, especially among small countries that have fewer real opportunities to diversify their export economies.

A low level of diversification of exports to the EU is itself an eligibility criterion for the GSP+ scheme. Currently, the threshold is that the share of the five top GSP imports into the EU by one country must be below 75% of all the EU’s GSP imports from that country. This criterion is used to indicate the ‘vulnerability’ of a country’s economy. Yet, while the diversification of exports might be an indicator for the industrial development level, there are certainly other criteria, such as gross domestic product (GDP) at purchasing power parity (PPP) per capita or the human development index (HDI), that would display a broader idea of the level of development of an economy.

GSP a possible alternative to EPAs?

It is sometimes argued that the GSP system, especially GSP+, could be developed as an alternative to the proposed Economic Partnership Agreements. As the few points highlighted here already suggest, a careful reform would first be necessary. And since there is little in-depth quantitative and qualitative information on the functioning of the GSP it is rather difficult to give detailed proposals.   Still, there is reason not to dismiss such an option.

On the one hand, GSP is generally accepted as being compliant with WTO rules that explicitly allow for derogations from Most Favoured Nation (non-discriminatory) treatment for developing countries. On the other hand, the fundamental difference in comparison to the EPAs is that it follows a
non-reciprocal approach instead of facilitating mutual market opening.

As previously stated, least developed countries would enjoy almost unlimited market access under the EBA initiative even without a new trade agreement. But an ACP country not listed as an LDC would most certainly lose a good part of its preferential access to EU markets, although to different degrees. In this case, only something like GSP+ would be an option. The Commission itself has prepared an overview of which eligibility criteria the 37 countries concerned currently fulfil: none would reach more than 0.3% of GSP imports into the EU, and 24 do not reach more than 0.1% (the maximum threshold being 1%). The Dominican Republic with ‘only’ 81.87% share of its five top GSP exports holds the highest level of diversification and only two more countries  (Antigua and Barbuda and the Bahamas) reach less than 90% (threshold is 75%). Only Antigua and Barbuda and the Bahamas are considered high income countries.

Looking at the implementation of the relevant international conventions, the situation becomes more complicated: not one of the 37 non-LDC countries have ratified all conventions. Therefore, after the expiry of the transition period in 2008, they do not fulfil the criterion that is actually at the heart of GSP+. Still, 12 have ratified at least 24 conventions so theoretically there would be the possibility of granting them preferential treatment under GSP+ if another transition period was accepted for new applicant countries. In the case of Africa, the relevant countries are Seychelles, Mauritius, Kenya, Namibia, Ghana, Cameroon and Nigeria.

While this looks encouraging for at least some countries, the serious questions highlighted above remain. For example, the coverage of products by GSP in general, especially products listed as sensitive, as well as the rules of origin.

Another argument that has been used against GSP+ as an alternative to the EPAs is that ACP countries would face direct and equal competition with those countries that already or will soon benefit from it (see endnote 2).

The European Parliament has been eager to be involved in the reform of the GSP. But it must be noted that under the current European Commission treaty, the Council is not bound by the European Parliament’s recommendations to date, even if the so-called consultation procedure is used. This would change fundamentally if the new terms of decision-making as proposed in the [draft] Lisbon Treaty would enter into force. If this happens, the Parliament will have full co-decision power on internal legislation in the field of trade policy, including the GSP framework.

Overcome the errors in the system

GSP in its current state neither seems to be a perfect system for serving the needs of developing countries in general, nor is it appropriately designed for the specific situation of ACP countries. But in comparison to the European Commission’s attempts to promote reciprocal market access it is at least an alternative that should be used as a model. Reciprocity in trade agreements only makes sense among partners with at least similar economic power.

Moreover, the fact that EPAs - or the interim agreements that have been concluded so far - foresee transition periods is a false argument: who could claim that the countries concerned will be able to equal the EU’s economic capacity even in the next 50 years?

One could say that ‘the error is in the system’. Trade policy could be designed in a way that promotes fair trade relations and sustainable development, but so far the EU appears to be advancing a foreign trade support and market access programme for its own companies. It is understandable that more and more countries are not willing to accept such treatment and claim a right to self-determination as regards the pace and organisation of economic development. Indeed, it is no surprise that so far only one ACP region is ready to sign a comprehensive EPA and negotiations on other free trade agreements have halted, notwithstanding the years of stagnant WTO negotiations. If Europe wants to be recognised as a trustworthy partner in development, it would be well advised to reconsider its trade agenda.

1  Helmuth Markov is a German politician and member of the European Parliament with the Party of the Democratic Socialism, Treasurer of the European United Left - Nordic Green Left and sits on the European Parliament’s Committee on International Trade. 

2  There are 177 beneficiaries of the EU’s GSP. Other preference giving countries are Australia, Belarus, Canada, Japan, New Zealand, Norway, the Russian Federation, Switzerland, Turkey and the United States.

3  Current beneficiaries are Bolivia, Ecuador, Columbia, Peru and Venezuela (Andean),  Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama (Central America), Moldova, Georgia, Mongolia and Sri Lanka.

The signing of a full and final EPA assumes that the legitimate interests of both parties have been taken into account. However, political decision-makers in Central Africa have been pressured into signing this agreement before major differences have been resolved, namely over how the partnership will be financed, the rate and time-scale of trade liberalisation, the inclusion of the Most Favoured Nation clause and rules of origin in the text of
the Agreement.
 
The problem of financing the partnership, or the development dimension, is all the more crucial given that implementing the EPA will involve structural adjustments to the economies of the Central African States and consequent loss of tax and customs revenues.4 Logically, there is a need to reinforce basic infrastructures (to reduce the cost of production) and to improve the efficiency of internal tax collection instruments. Given these constraints, the Europeans argue that the costs of implementing the EPA should be met by the European Development Fund (EDF) through the National and Regional Indicative Programmes (NIPs and RIPs). Now, it is not difficult to see that the EDF is not the appropriate channel for financing the fallout from the EPA. The type of partnership being negotiated has the peculiar feature of granting reciprocal trade preferences which would entail major adjustment costs for Central Africa. Since these costs derive from the dismantling of trade barriers under the EPA, the modalities of financing such costs should be negotiated under the same heading as market access issues. Or, better still, once the amount of the RIP has been unilaterally fixed by the European Commission and has no link to the costs of implementing the EPA, some proportionality should be established between the losses incurred and the amount allocated by the EU.
 
Following this line of thought, it should be borne in mind that Central Africa’s dismantling of tariff barriers will make small and medium sized enterprises vulnerable, as they will face increased competition from products imported from Europe. The closing down of businesses and the knock-on social problems call for reinforcement of basic infrastructures and improvement in competitiveness. If indeed the EPA is a new partnership involving reciprocal opening-up and fair compensation for any ensuing losses, there is a need to make the reinforcement of basic infrastructure one of the priority areas for funding earmarked under the EPA Regional Fund and to ensure that the dismantling of tariff barriers will actually lead to lower market prices of goods for consumers.
 
We live in hope, as the saying goes, that the political representatives of Central Africa will remember that on July 16 2007 at Yaoundé, the Joint Central African Ministerial Committee and the European Commissioners for Trade and Development agreed, in relation to the sale of goods, that:
 
“Central Africa will provide an initial list in September of products to be removed from tariff protection covering 60% of imports originating in the European Community, as well as the list of remaining  products. In relation to this list of remaining products, and with a view to establishing the coverage ratios and the timescale for the dismantling of tariff barriers contained  in the Central African States’s final offer, the Ministerial Committee is agreed on developing a plan for tariff liberalisation which focuses on  development, and therefore sets out the following targets: (i) for extremely sensitive products on this list, and for any future sensitive products put forward as candidates for liberalisation over the next 25 years, the European Commission and Central Africa undertake to study each  tariff  line on this list; (ii) the exact percentage of tariff dismantling will be determined after an examination of each tariff  line, in a way which encourages development, improvements in competitiveness and diversification of  sectors of production, economic growth, the fight against poverty, food security, consumer wellbeing and employment in Central Africa.”
 
As examples of persisting differences, we may cite the interpretation of GATT article XXIV relating to ‘substantially all trade’,5 rate of liberalisation,6 transition periods,7  liberalisation of at least 50% of the service sector and rules of origin. Actual examples of the latter show the scale of the problems that may arise if the negotiators do not keep their eyes on the ball.
 

The setbacks
 
According to the Cotonou Agreement, fish was considered to be an originating product if caught by ships on which 50% of the crew came from EU member states or from ACP/Overseas countries and territories.8 This guaranteed employment opportunities for citizens of ACP countries particularly on European Union tuna fishing vessels which would unload their catch in ACP countries to be processed before export to European markets. If the European Union had its way, European boat owners would be able to take on board a crew not originating in Central Africa but still benefit from the rules of origin - as if milk from a French cow which was imported and raised in Central Africa, subsequently produced French milk! The European Union wants to go even further and force Central Africa to accept that the opportunity to rent or charter boats must be first refused by European fishing interests.9 
 
The EU’s unilateral demands also involve the textile sector. In a departure from the Cotonou Agreement, which stipulated that articles made from imported fabric could not be considered as having originating status, the EU now demands that in certain cases: 
* The kind of yarn to be used in manufacture should no longer be specified10  
* The reference to change in tariff heading should be removed and the 50% price ex-works should be the only condition set11 
* Knitted and crocheted articles of apparel and clothing accessories (chap. 61) should be made directly from fabric rather than yarn, and articles of apparel and clothing accessories, other than knitted or crocheted (with the exception of  handkerchiefs, pouches, shawls, scarves, mantillas, etc.) should have originating status if they are made from fabric.
 
We should therefore realise that, in concrete terms, the ACP countries will no longer form a single territory and hence a so-called ‘cumulation’ zone. In fact, regional agreements turn the countries within the regional bloc into a single territory. ‘Cumulation’ will no longer be possible unless the countries form part of the same  zone, that is, the same trading area, unless the partners have the same rules of origin and are part of a legal framework which allows ‘cumulation’ and administrative cooperation. From this point of view, Cameroon will not be able to ‘cumulate’ with products originating in Nigeria until Central Africa and West Africa have the same rules of origin and engage in cooperation at the level of customs administration.
 
In a word, if Central African political leaders sign up to the rules of origin that the EU wants to impose on Central Africa, the industrialisation that is said to be necessary for growth and the fight against poverty will remain a distant dream.  When we see the difficulties faced by Mauritius in using Kenyan inputs in its exports to Europe, we can imagine the blow our region would suffer when the EU, for its part, has already managed to create safeguard mechanisms.
 
In fact, it is unreasonable to force Central Africa to open markets completely to products where manufacturers close their own markets by recourse to a range of mechanisms and subterfuges. If globalisation is to become reality, it must take into account that in these circumstances the region is in a better position to know what is right for its own countries and hence for its sub-regions.
 
1  Jacob Kotcho is the Permanent Secretary of the Citizens’ Association for the Defence of Collective Interests (ACDIC) and Martin Abega is the Executive Secretary of the Cameroon Joint Employers’ Group (GICAM). See www.acdic.net and www.legicam.org
2  The four major agricultural exports from the Central African region only make up 7.6% of total exports to the EU estimated at a value of €6,676,659, while crude oil and minerals represent 57.6% (source: comtext 2007 EU declarations).
3  To read the full article see: “Opinion: Food insecurity”, Peter Mandelson, The International Herald Tribune, May 22 2008, www.iht.com
4  Studies are to be carried out on how to calculate the matrix for net fiscal impact on the basis of the general calculable equilibrium model (for the EU) and the partial equilibrium model (for Central Africa).
5  The basis for calculating the ‘substantially all trade’ to be liberalised is not consensual: Central Africa understands this trade to consist of both imports and exports, whereas other WTO members believe  that such trade concerns only imports.
6  70/30 for Central Africa and 80/20 for the European Union.
7  25 years for Central Africa and 17 years for the European Union.
8  Article 3. (d) title 2.
9  We may well think that this is based on the lack of national capital in Central Africa for the direct acquisition of ships from the factory.
10 This specifically concerns coverings, bed linen, curtains, etc; other furnishing articles made from  felt and non-woven fabrics, fabrics made from non-natural, rather than natural, fibers. 
11 Embroidery in garment form, in strips or in patterns.

ACP-EU Council adopts EPA resolution

The ACP-EU Council of Ministers adopted a joint resolution on Economic Partnership Agreements during its meeting on June 12-13 in Addis Ababa.1 The text echoes the EU External Relations Council conclusions of May 27, by calling for greater flexibility in the move from interim agreements to regional EPAs.2

The ACP reiterated previous calls by African Union trade ministers to review ten articles in the interim agreements, given the haste to complete EPA negotiations at the end of 2007. The European Commission said it would try to accommodate changes in the push towards full agreements, but stressed that it could not guarantee all ACP demands. ACP governments fear presenting imperfect interim deals to parliaments for ratification on the grounds that they may be improved if a full agreement is negotiated. Some members of the European Parliament believe they should not approve EPAs until ACP Parliaments have done so.

Several ACP countries argued that a full EPA covers an entire region, but does not necessarily have a wide thematic scope, i.e. may exclude services and trade related issues. The European Commission claims that the fuller the EPA, the better the development potential. It stresses the importance of ACP ownership of EPAs to ensure that governments carry out the necessary reforms to implement the agreements. Both sides stressed the need to build regional markets and agreed to discuss regional integration and its potential benefits, rather than focussing on compliance with WTO rules. Timelines for signature of interim EPAs have slipped due to EU requirements to translate the texts into 23 languages. Signature of the interim agreements is now only expected in the autumn or even early next year.

The 10th EDF finally enters into force

The 10th European Development Fund (EDF) entered into force on July 1, after six months of delay. EU Development Commissioner Louis Michel told the ACP-EU Council of ministers that all EU member states and the majority of ACP countries had ratified the financing instrument, appealing to those who had not yet signed to do so within 12 months in order for them to access the funds. The European Commission has clarified that the bulk of support (€1.3 billion) is for EPAs and economic and trade integration, while 40% will be general budget support. Discussion continues on regional strategy papers, which should be concluded in October. There is still no firm commitment to development cooperation finance beyond the EDF. However, EPA texts state that both sides have an obligation to give priority to EPA implementation. This is the first time bilateral support has been promised in an EU agreement and is an obligation of intent for member states to provide this support.

African Union calls for unity to tackle food crisis

Africa must unite to reduce the impact of rising food prices that have hit its citizens harder than the rest of the world, African Union (AU) Commission Chairman Jean Ping said during the African Union Summit in Sharm El Sheikh from June 24-July 1.3 “This sharp increase [in basic food prices] has had a particularly negative effort on African countries,” Ping said, claiming it was crucial for African countries to negotiate with the West with one voice on the food crisis, as well as on soaring energy costs. Ministers also adopted a statement on EPAs.4

Optimism reigns ahead of Central African talks

There is optimism in Central Africa ahead of its EPA negotiations with the European Commission in July, despite the original calendar slipping. Leaders instructed CEMAC to pursue negotiations to reach a comprehensive EPA during the CEMAC Summit in Yaoundé on 24-25 June. Member states were also invited to send representatives to CEMAC headquarters in a bid to create national structures to deal with regional integration. The President of the African Development Bank said a regional economic programme will be drafted before December 3 and should be adopted at an extraordinary heads of states summit around the same date.

Central Africa continues to work on its regional goods and services market access offer to the EU, ahead of technical and chief negotiator sessions on July 7-18. Central Africa maintains that there should be 70% trade coverage with 30% exclusions and a 25 year transition period. However, it is willing to negotiate this if effective compensation or accompanying measures are put in place to cover fiscal losses, reinforce capacity and finance adjustment costs. The European Commission is calling for 80% coverage with 20% exclusions and a 15 year transition period, although it has indicated willingness to negotiate once the offers are on the table.

One suggestion from the European Commission was to start work on the basis of the three schedules discussed last year (Cameroon and Gabon’s liberalisation schedules and the one tabled by Central Africa in October 2007) and offered to assist the region in calculations. But Central Africa refused this approach, stating that schedules presented in October 2007 were hypothetical and - along with Cameroon’s interim agreement - failed to take individual country concerns into account.

Central Africa has not yet managed to present a services offer as national lists have not been finalised, but did present an ambitious request for an improvement of the EU’s original proposal. The EU reportedly rebuffed the request, insisting that it expects an offer from Central Africa of at least 50% liberalisation before it will offer more.

Central Africa has noted that it does not want to include the European Commission’s proposal for an MFN clause in the EPA and has flagged concerns about including a safeguard clause.

Development issues were the focus of a Regional Preparatory Task Force meeting in June. Central Africa requested that the joint orientation document on reinforcing capacities be translated into precisely funded programmes. Studies are being conducted to elaborate a matrix that will calculate the net fiscal impact of the EPA with a view to agreeing a common methodology and a matrix for financing cooperation. Following a European Commission audit of the Central African Regional Development Bank, it was decided that an interval of around one year is necessary to sufficiently increase the capacity of the bank to manage the regional EPA Fund.

West Africa advances towards regional EPA

Ministers from West Africa’s monetary union (UEMOA) examined the region’s financial situation and invited member states to accelerate harmonisation of national economies and fiscal regimes during a meeting on June 26. They also held a ministerial seminar to define a strategic framework for relaunching agricultural production. Meanwhile, there was a UEMOA workshop in Dakar to validate a report on the effect of harmonisation of import taxes on society and the impact of EPAs on the fiscal receipts of UEMOA countries.5 The report suggests the introduction of a maximum import tax of around 30% with capacity building to ensure fiscal potential is reached. Experts said more information was necessary to draw conclusions on EPAs.

Earlier in the month, negotiations on an initial joint text took place between European Commission and West African officials in Abuja on June 17-20. The text, which was based on a draft from West Africa, still contained brackets. However, both sides agreed on the objectives of the EPA and on the trade in goods section. Disagreement remains on the elimination of export taxes; the reform of ECOWAS and UEMOA levies to make them WTO compatible; the MFN clause; the elimination of EU agricultural subsidies; the duration of the transition period for establishing free movement of goods in West Africa; transit; and the definition of custom duties.6 West African sources indicate that further outstanding issues relate to the standstill clause and the non-execution clause.

There are reports that the region still needs to agree to the methodology to be used for aggregating national lists into a regional one.

Progress on the market access offer is linked to the finalisation of the ECOWAS common external tariff (CET). A preliminary report commissioned by ECOWAS was published in the second half of June, which addressed the creation of a fifth tariff band as well as the reclassification of certain products. ECOWAS heads of state subsequently stressed that the establishment of a customs union was a prerequisite for a regional EPA with the EU.7

Senegalese authorities and private sector representatives have indicated a possible u-turn from their December 2007 position to not negotiate EPAs. The EU’s Director General of Trade, Peter Thompson, told a civil society meeting in Brussels in June that these two groups would be interested in negotiating an EPA, including on services. He also indicated that there was a change in mood and preparation on EPAs in Nigeria. Translation problems have delayed the Côte d’Ivoire signature of the interim agreement with the EU, which will no longer take place on June 30 as planned.8

SADC-EU prepare for July round of negotiations

SADC and European Commission negotiators hammered out trade in services and investment questions, during a meeting in Gaborone on June 30-July 4. They also discussed the SACU market access offer and the list of concerns presented by Angola, Namibia and South Africa (ANSA) with the interim EPA, which they want addressed in the final EPA. As previously agreed, trade related issues and the ANSA concerns will now be discussed in parallel processes. The region aims to sign the interim EPA by July 1 (delayed for translation reasons) and a full EPA by the end of the year. Peter Thompson confirmed this deadline to civil society in Brussels on July 1. He said that the full EPA would include chapters on services and investment, incorporating the EU services liberalisation offer. SADC countries (minus ANSA) would include one services sector liberalisation commitment per member country, as well as a standstill clause to negotiate the rest of the SADC schedule within three years, he said.

SACU tabled its goods market access offer to the EU on June 27 and awaits an initial reaction.

ESA tackles outstanding EPA problems

Eastern and Southern Africa identified and discussed the key problematic areas in the interim EPA that it wishes to re-open in the move towards a full agreement, during a technical officials meeting in Brussels on June 23-25.9 Constructive discussions took place on agriculture, particularly for sanitary and phytosantiary measures, while provisions for technical barriers to trade were almost finalised.

Discussions on development focused on the need to link ESA’s development strategy with the 10th EDF Regional Strategy Paper. Both sides agreed to hire a consultant to consider how to establish development benchmarks. ESA also agreed to submit a revised, costed, development matrix which identifies the region’s top priorities.

ESA and EU services texts were put on the negotiating table: ESA’s GATS based text was compared to the EU’s Caribbean EPA GATS — plus text (i.e. including investment). ESA called for investment in non-service sectors to be dealt with in the trade related issues negotiating group. The two sides agreed to take a further look at rules and development cooperation in relation to investment.

There was similar debate based on joint texts with regard to intellectual property rights, competition policy and sustainable development. ESA called for negotiations to take place in an asymmetric and progressive way, with flexibility offered to different sectors and interest groups of ESA countries. Good progress was made by outlining objectives on a joint text acknowledging the importance of customs and trade facilitation. ESA and the EU agreed to step-up cooperation to ensure that the relevant legislation, procedures and administrative capacity was in place to promote trade facilitation.

ESA voiced objection to having provisions on good governance in the fiscal chapter of the full EPA. However, the European Commission replied that its inclusion was compulsory.

EAC common market talks deferred

The East Africa Commission region continued to prepare for the next round of EPA negotiations with the European Commission. These had been scheduled for early June, but will now only take place in September. The region plans to finalise its liberalisation schedule in early July.

WTO talks could delay Caribbean signature

The official signature of the Caribbean EPA could be postponed due to the WTO ministerial meeting which has been scheduled simultaneously. Peter Thompson told civil society in Brussels that signature, which was foreseen on July 23, might be postponed due to the ministerial in Brussels on July 21. EPAs will be discussed during a CARICOM Summit in Antigua-Barbuda on July 2-4. Sources indicate that signature will now take place for all countries (possibly not Guyana) in Barbados on July 30 or August 30.

Debate on the EPAs in the region continues, with prominent academics, eminent regional personalities, trade unions and the Guyana government calling for signature to be postponed unless the EU threatens to re-impose tariffs.10 However, no private sector organisation has yet called for a delay. The Director General of the Caribbean Regional Negotiating Machinery maintains the agreement is imperative for the region.11 The Prime Minister’s cabinet of Barbados is set to consider its review of the EPA on July 10. Meanwhile, Jamaica’s Prime Minister, Bruce Golding, has announced that his country will sign the EPA, but added that signing could be called off in the face of wide-scale opposition.12 Trinidad and Tobago’s trade minister, Lenny Saith, has also given the thumbs up to the EPA.13

Sources indicate that the main problem governments are flagging with the EPA relates to the terms of regional preferences the EU sought and secured for the Dominican Republic. It remains to be seen whether those concerned would be willing to put the region’s credibility to the test by trying to re-open what they and the EU have already agreed. Many will have to weigh up the negative impacts of a delay in signature, particularly in terms of uncertainty for bananas and sugar. Haiti and the Bahamas still need to put forward their services liberalisation offers.

Pacific calls for focus on trade in goods

The lead spokesman for the Pacific ACP trade ministers, Hans Joachim Keil, wrote to EU Trade Commissioner Peter Mandelson in July, proposing to conclude EPAs by the end of the year. According to sources in the region, Keil suggested that both sides focus on finalising outstanding issues including trade in goods, dispute settlement, fisheries and development. He also advocated suspending negotiations on trade in services and inserting a rendez-vous clause in the EPA that would commit both parties to revisit services in the future. Problems have arisen after the European Commission was unable to agree to Pacific proposals, particularly with regard to the temporary movement of natural persons (so-called Mode 4). There is also disagreement on trade related rules, where the Pacific does not feel that the agreement proposed by the EU, which is based on the one agreed with the Caribbean, is in line with the developmental issues faced by the region. Any EPA institutions established between now and the end of the year, will take responsibility for a programme designed to deepen the Pacific-EU partnership. The Pacific now awaits a response to its letter from the Commission.

For more EPA news please visit: www.acp-eu-trade.org

1 For further details see EU Council press release: ACP-EC Council of Ministers, Addis Ababa, June 13 2008 http://register.consilium.europa.eu/pdf/en/08/st10/st10822.en08.pdf
2 Council Conclusions on Economic Partnership Agreements (EPAs), 2870th EXTERNAL RELATIONS Council meeting Brussels, May 26-27 2008, www.consilium.europa.eu
3 See: Africa must unite to tackle rising food prices – AU, Daniel Wallis and Cynthia Johnston, Reuters, June 27 2008.
4 For further details on the Summit see: www.africa-union.org
5 See: UEMOA-Harmonisation des taux d’imposition : Des gains de recettes qui se perdent dans les Ape, Le Quotidien, June 26 2008, www.lequotidien.sn
6 See: Update on EU-West Africa EPA negotiations, EPA Flash News, Directorate General for Trade, European Commission, June 25 2008, www.acp-eu-trade.org
7 See: ECOWAS leaders call for development of regional infrastructure, Afriquenligne, June 26 2008, www.afriquenligne.fr and the final communiqué of the Abuja Heads of State meeting on June 23: www.apo-opa.org/080627.pdf
8 See: Côte d’Ivoire: Le gouvernement ivoirien va signer le 30 juin un accord d’étape avec l’Union européenne dans le cadre des négociations sur les nouveaux accords de partenariat économique afin de “préserver ses exportations”, l’Agence France Presse, June 2008, www.izf.net
9 See: EPA newsflash on the EU-ESA EPA technical negotiations, July 1 2008, www.ec.europa.eu/trade
10 See: EPA: Caribbean still divided on treaty, BBC, June 27 2008, www.bbc.co.uk/caribbean 11 See: Region to benefit from EPA agreement, Alphea Saunders, Caribbean net news, July 1 2008, www.caribbeannetnews.com
12 See: Jamaica to sign EPA with Europe, RadioJamaica.com, June 24 2008, www.radiojamaica.com
13 See: Trinidad backs trade deal, BBC, June 5 2008, www.bbc.co.uk/caribbean