Bridges Weekly Trade News Digest • Volume 10 • Number 24 • 5th July 2006
EPAs: With Eighteen Months To Go, Uncertainty Remains
The EU and the group of African, Caribbean, and Pacific (ACP) ministers disagreed sharply over a framework for reviewing their economic partnership agreement negotiations at a joint ministerial meeting in Brussels on 28 June.
The Cotonou Agreement — which currently allows most ACP exports to enter the EU market duty free — is set to expire at the end of 2007. These non-reciprocal trade preferences are meant to be replaced by the economic partnership agreements (EPAs), which will phase in free trade between the two blocs of countries. The EU is currently negotiating one-on-one with each of the six ACP regions.
The Brussels meeting was mandated to discuss how to approach a formal comprehensive review of EPA preparations and negotiations. According to sources, parties "didn’t agree on anything and sent the issue back to ambassadors in Brussels to resolve."
The apparent obstacle to agreement was the scope of the review. According to one observer, the EU sought an "EPA-light review," focusing on a narrow set of elements. In contrast, the ACP sought a more comprehensive survey of the trade and development dimensions of EPAs.
ACP countries have raised several concerns over the development implications of bilateral agreements with reciprocal market access commitments, such as the possibility of EU products flooding their markets and harming domestic industries. Some LDC officials have expressed concern over the very appropriateness of reciprocity between countries at different levels of development. In addition, ACP members are worried about the costs of adjustment and implementation, as well as the EU’s request to include in the EPAs obligations beyond those required by the WTO.
In April, the African Union trade ministers adopted a declaration on EPAs which expresses "profound disappointment" with the stance taken by EU negotiators "insofar as it does not adequately addresses the development concerns that must be the basis of relations with Africa." The declaration urges the EU not to seek commitments in services and intellectual property that go beyond WTO requirements.
At the meeting in Brussels, ACP Chair and Barbados Minister of Foreign Affairs and Foreign Trade Dame Billie Miller objected to the EU’s attempts to include issues such as competition policy, government procurement and investment — all of which were dropped from the Doha Round agenda in the face of developing country opposition. Miller stated that "not all ACP regions have national policies let alone regional policies on these issues … regions should not be coerced to negotiate these issues unless and until they indicate their readiness to deal with these subjects."
EU Trade Commissioner Peter Mandelson downplayed these concerns, rejecting the characterisation of EPAs as "the EU demanding ever more difficult policy choices from a reluctant and unwilling ACP." "I do not believe this reflects reality," he added.
In addition, Miller complained about the EU’s conduct in the talks, such as cancelling meetings at the last minute, after ACP negotiators had reached the venue, as well as cases where "junior European Commission officials were sent to negotiate and because they did not have a full mandate, they could not respond to a number of issues raised by the ACP negotiators."
Another issue is the regional organisation of negotiating groupings. Sources have suggested that ACP countries’ overlapping memberships in economic integration areas has weakened their negotiating positions. For example, six of the 14-member Southern African Development Community (SADC) also belong to the Common Market for Eastern and Southern Africa (COMESA), and decided to negotiate under the latter. In her speech, Miller stressed the need for the ACP countries to remain united, and "not to allow the separation created by the EPA negotiations to divide [them]."
The ACP chair also called for hastening the pace of negotiations, and examining potential alternative arrangements in the event that they do not reach agreement before the deadline.
Mandelson, too, suggested speeding up the negotiations. Arguing that preferential market access has not benefited the ACP economies, he recommended making the EPA concept "a reality" and a "modernised and effective development vehicle" through: carefully-structured liberalisation; removing non-tariff barriers; delivering better services; agreeing the rules and economic governance necessary to make an attractive business environment; and deeper regional integration to build viable markets.
Earlier in the month, ACP-EU Ministers agreed to a financial assistance package totalling over EUR 24 billion for years 2008-2013 for the Cotonou Partnership agreement.
To access the Nairobi Declaration on Economic Partnership Agreements, visit http://www.africa-union.org/root/AU/Conferences/Past/2006/April/TI/Nairobi%20Declaration%20on%20EPAs.pdf.
ICTSD reporting; "EPA: Remarks to ACP Ministers," EUROPA, 28 June 2006; Africa ‘Profoundly Disappointed’ by Europe’s anti-development stance in the EPA Negotiations," AFRICAN TRADE AGENDA, THIRD WORLD NETWORK, April 2006; "Southern Africa: SADC-EU Trade Negotiations: the Overlapping Membership Conundrum," THE HERALD (HARARE), 22 June 2006.