NEGOTIATIONS FOR EPAs - WHICH WAY NOW? Dr Francis Mangeni Regional Trade Policy Advisor Commission...

NEGOTIATIONS FOR EPAs- WHICH WAY NOW?

Dr Francis Mangeni

Regional Trade Policy AdvisorCommission of the African Union

[email protected]

EPA Negotiations March 2007 2

Outline

Preliminary remark Assessing the negotiations Concessions made so far Provisional EPAs Transitional arrangements Recommendations


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PRELIMINARY REMARK


PRELIMINARY REMARK- role of AU, attitude of EC

4 negotiating groups in Africa – implications for regional integration, need for coordination

Commission of AU has mandate to coordinate EPA negotiations, and services the Summits and Ministerial meetings

Summit and Ministerial declarations on EPAs are Common African Positions (copies)

How democratic is the European Commission Can we ensure that the EC fully reflects the

statements of the member states, parliaments, etc


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ASSESSING THE NEGOTIATIONS


REVIEW OF EPA NEGOTIATIONS - not promising; contemplate extensn Negotiations are behind schedule – EC delays,

capacity constraints Many outstanding issues, with wide divergence of

positions Regional integration, development a) b) , market

access, trade-related areas – not adequately addressed

Measures for competitiveness are so far inadequate ACP recommendation: sufficient time and resources

needed; AU: no disruption of trade, extension Impact of statements on extension – urgency and

realism; REVIEW SHOULD BE FOLLOWED UP


DEVELOPMENT COOPERATION - is now for EPAs?

“Assistance could be provided against clear commitments on rules” EC response to SADC Framework Proposal

“Resources will match the level of ambition of ACP countries” EC at JMTC 1 March 2007

EDF, for implementing EPAs; broader programmes for devp and RI could be sidelined

Trade policy should be part of the broader devp framework, not the other way round


EC ASSESSMENT- promising; basis for optimism?

Mandelson: there has been significant progress, the negotiations are behind schedule, there is a lot to do, let us move on with it. Pleasantly surprised with reports?

“there is no EPA that I would sign that is not development-friendly. Such EPA would be disqualified”. WE MUST MEET THE DEADLINE

Michel: there is enough money, trust the EC No more impact assessment studies


ACP Ministers-

On EC's tactics in the talks: repetition of "rigid red lines and inflexible positions that do not reflect any genuine willingness to think creatively and arrive at a mutually acceptable solution that addresses the unique needs and circumstances (of the Pacific region)." Hans-Joachim Keil, Samoan Trade Minister, ACP spokesperson

CSO meeting in Brussels, 12 October 2006


RESPONSE OF ACP GROUPS- cautious; don’t rush

No politician can sacrifice his people; on the alter of deadlines – ACP spokespersons: 1, 13 March

All outstanding issues should be addressed before concluding EPAs

Have political will to conclude negotiations Uncertain about the feasibility; EC has not clarified

its optimism Concerned about disruption of trade, no transitional

measures (ratification)


COMPATIBILITY REQUIREMENT- guesswork; finalise WTO negns

The requirement is to address the waiver – which covers goods (GATT), not necessarily services/ EU is a major trading partner

Article 24 rules not finalised, not known – ACP proposal not addressed

New developments – SVEs, obligations to LDCs, GSP case, international impetus to assist Africa (MDGs, UN conference on LDCs, Monterrey, Commission on Africa, Gleanegles G8 summit, etc) – do not require reciprocity, int’l goodwill to assist


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CONCESSIONS SO FAR


EC CONCESSIONS- no new obligations in EPAs

Development cooperation – already part of EDF, no additional resources, no EPA facility, no separate financial protocol, no binding commitments in EPAs

Aid for Trade – for all developing countries, part of WTO negotiations and package

Market access – DFQF for LDCs is now WTO obligation to be implemented, taking into account non-LDCs at similar development levels


EC DEMANDS - hostile, contravene norms

Regional integration – SSL/CET, formation of customs unions; agreement to first strengthen RI is inconsistent with the urgency of liberalisation under EPAs

Development – non-discrimination rules, right of entry, etc, in investment; competition, public procurement, IPR; governance,

Market access – LDCs should reciprocate; unprecedented, mercantilist, contrary to WTO concessions and rules


ACP DEMANDS- with or without EPAs

Market access – full DFQF, real asymmetry, ROO, safeguards, standards, etc (2% of world trade)

Development cooperation – implement provs on competitiveness (0.7% of GDP)

Investment – consolidate regional markets, infrastructure (public investment), capacity building, harmonise business law, imrpove business environment, ACP Investment Guarantee Agency, EIB credit facilities for SMEs, CDE, Technical Centre for Agriculture and Rural Cooperation


ACP CONCESSIONS- pushed, driven

EASILY DROP THEIR DEMANDS – need support from EU member states, parliaments, industry, civil society and public opinion (eg WTO)

Commenced EPA negotiations – deal in CPA Did not insist on alternatives in 2004, but the EC

attitude has remained “unwilling or unprepared” Unprecedented autonomous liberalisation – low

tariffs (inputs), removal of restrictions, investor friendly economies


MUTUAL GAINS - EU stands to gain also

Vibrant regional markets in ACP countries ACP/ Africa group is a partner in int’l relations

(106 countries) EU int’l standing in development cooperation,

models for achieving MDGs Cooperation with other int’l players Peace, migration, disease, skills Long and short term gains; magnanimity


Concessions in the negotiations- build upon gains for ACP

EPAs should not be strict FTAs/ alternatives? Critical/ careful approach to liberalisation can

be helpful – recent literature on liberalisation and globalisation (dislike for academics, CSOs – false prophets, nonsensical things, oil-rich countries closed to neighbours)

EPAs should consolidate international gains for ACP countries (locking in)

Autonomous liberalisation should be recognised


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PROVISIONAL EPAs


NATURE OF PROVISIONAL EPA- simple EPA

Acceptable to some groups and EC? NOT to Cariforum – want an ambitious EPA by Sept/ July 07, not EPA late or EPA light

Scope not determined: ESA – market access and development; SADC – exclude investment, competition, gvt procurement

Conclude EPA, with an obligation to continue negotiations to finalise all outstanding issues


CASE FOR PROVISIONAL EPA - skip the hard work

Realism – in light of the delays, deal with manageable areas

Assists meet the WTO compatibility requirement

Avoids controversial areas

Not adequately investigated


CASE AGAINST- difficult to work out

NOT MANAGEABLE – wide divergences remain in key areas including, meaning of development, development cooperation, regional integration, and market access

Outstanding areas could be left unfinalised for unduly long – like implementation issues in WTO negotiations

Selected areas for the EPA might well be imposed by the EC, excl key ACP priorities

NOT YET CAREFULLY STUDIED


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TRANSITIONAL ARRANGEMENTS


CONCLUSION BY DECEMBER - RATIFICATION DELAYED

GENERALLY REQUIRED, for instruments to enter force and to be implemented – different regimes have different rules

Examples – CPA took two years, WTO took just under a year

For EC – temporary implementation pending ratification?

For ACP – cabinet or parliament (involved?) TRANSITIONAL PERIOD MAY BE REQUIRED


NOT CONCLUDED BY DECEMBER

Waiver – recommended by Parliaments and CSOs; not option for EC; USA precedents; ACP secretariat to prepare cost analysis; how would a vote go?

GSP, GSP+, EBA; enhanced GSP – simulation indicating benefits; alarming statistics from EC on duty increases; contractualisation not worked out

Continue CPA regime, notify WTO – ACP MTC proposal


CARIFORUM EPA CONCLUDED

IS THE FEAR ABOUT BANANA WARS? Other products – (main ACP exports) Could not FTAs covering these products be

challenged? Less likelihood? How come USA/ Canadian initiatives have

not been challenged?

IMPORTANCE OF HARMONISED EPAs in Africa


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RECOMMENDATIONS


MEASURES TO CONCLUDE EPAs BY DECEMBER 2007

Development should be addressed – (meaning) EPA process should support regional integration Asymmetry/ variable geometry should be included Content/ text of EPAs should be agreed EC should respond quickly to ACP proposals EC should also actively initiate proposals RPTFs should work better and be part of EPA process Political oversight of the negotiations; should include

regular reviews, actions and decisions.


MEANING OF DEVELOPMENT- AU Nairobi Decl on EPAs, ACP

RI to consolidate regional markets, create AEC Full market access, without NTBs Address infrastructure and supply side constraints –

to enhance capacity to produce, export, meet standards, mobilise resources; competitiveness

Through adeq financial and technical cooperation, incl technology partnerships and skills transfer

Provide for policy space – SDT: asymmetry and flexibility, varying obligations

Strengthening institutional capacities in public and private sectors


CHALLENGES

Elaborating politically, socially acceptable EPAs, in an inclusive manner

Inflexibility of EC negotiators and structures Short time frame left to finalise issues Rationalisation of RI in Africa Coordination of EPA negotiations among the

groups – common positions, difference pace Refinement of negotiating positions Drafting of EPA text


POST-DECEMBER RULES

To ensure that trade is not disrupted To assist stability and predictability To meet CPA obligations: explore

alternatives, ensure no country is worse off, preserve acqui

Respond to AU declarations SERIOUS WORK URGENTLY REQUIRED

WTO frameworks, CPA frameworks, etc Write out current regimes into an agreement

NEGOTIATIONS FOR EPAs - WHICH WAY NOW? Dr Francis Mangeni Regional Trade Policy Advisor Commission...

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