ESA : 10th Regional Negotiation Forum on Economic Partnership Agreement (EPA)
The 10th Regional Negotiation Forum on Economic Partnership Agreement (EPA) was held in Bujumbura, Burundi from 21 -23 Feb 2007 to consider the recent reports of the technical meetings on areas of development, market access, agriculture, trade related issues, European Commission's response to the various parts of the EPA text and assess the overall status of EPA negotiations.
The forum also served as a preparatory meeting for lead Ambassadors and Trade, ESA Trade officials and Ministers from Eastern and Southern African (ESA) countries that were scheduled to meet the European Commission officials in Brussels.
During the forum it was observed that development has remained the major divisive issue between ESA and EU. EC negotiators had initially indicated that they had no mandate to negotiate development but ESA countries rejected the idea of an EPA without an explicit chapter on development.
The EC agreed to treat development as a stand alone chapter in the EPA. EC maintained that apart from Economic Development Fund (EDF), they will not provide another financial protocol apart from the one under Cotonou Partnership Agreement. However, they are committed to mobilize resources from individual EU members and other donors.
The ESA group has prioritized development to address supply side constraints and to have in place conducive and appropriate policy. EC is to have cooperation areas and programmes moved to the regional development matrix which covers infrastructure development, regional integration and natural resources management. EPA countries will have development benchmarks with possible indicators such as export volumes, diversification of exports and value addition.
The major concern on market access is the delay by EC to respond to ESA proposal on rules of origin. One way to improve market access conditions for ESA exports is to simplify the current rules of origin in Cotonou Agreement.
Study will be undertaken on rules of origin on textiles and clothing. The use of third country fabric on the same line as AGOA will be included in the draft protocol. The ESA secretariat will circulate the draft protocol for comments before discussing it at the next RNF.
There is a draft protocol on SPS measures. EC insists on compliance while ESA countries would like to see assistance by EU on the capacity building in order for companies to be in a position to comply with costly EU SPS measures and standards. Private sector standards will be addressed in the protocol.
Work is ongoing on the draft Protocol on safeguards and it will be revised to incorporate all trade defence instruments including trade remedies. Safeguards will apply to both parties.
Currently the list from 12 countries constitutes of 2,756 tariff lines out of a possible 5,115 tariff lines based on Harmonized System HS 1996.This constitutes 56.9% of total EU imports to ESA meaning that the list already excludes 57% of EU imports from gradual liberalization. The major concern is whether EC can accept 57% exclusion as "substantially all trade coverage". This is still a subject of negotiations and the list is still a subject for review.
Agriculture will be treated as a comprehensive standalone chapter. Issues on effects of subsidies and CAP reform on ESA economies and export of ESA agriculture products to the region and third country will need to be addressed.
Many ESA countries felt that they may not be ready to conclude negotiations by December 2007 although EC is very keen to see the negotiations concluded. An extension of negotiation period for at least three years is recommended.
There were various options available. Firstly, temporary continuation of the current trade arrangement under Cotonou Trade regime. EC would therefore need to take transitional measures, notify the WTO on the progress of negotiations and request for an extension period in order to conclude the negotiations. Secondly, conclude the negotiations by 31st December 2007 in key areas including development and market access with a provision for continuation of negotiations on outstanding issues. Finally, an extension of WTO waiver in order to continue trading under the current trade arrangement which is not WTO-compatible.
This article was authored by Walter N. Kamau, KAM Senior Executive Officer for Trade, on March 2nd 2007.
Source
The forum also served as a preparatory meeting for lead Ambassadors and Trade, ESA Trade officials and Ministers from Eastern and Southern African (ESA) countries that were scheduled to meet the European Commission officials in Brussels.
During the forum it was observed that development has remained the major divisive issue between ESA and EU. EC negotiators had initially indicated that they had no mandate to negotiate development but ESA countries rejected the idea of an EPA without an explicit chapter on development.
The EC agreed to treat development as a stand alone chapter in the EPA. EC maintained that apart from Economic Development Fund (EDF), they will not provide another financial protocol apart from the one under Cotonou Partnership Agreement. However, they are committed to mobilize resources from individual EU members and other donors.
The ESA group has prioritized development to address supply side constraints and to have in place conducive and appropriate policy. EC is to have cooperation areas and programmes moved to the regional development matrix which covers infrastructure development, regional integration and natural resources management. EPA countries will have development benchmarks with possible indicators such as export volumes, diversification of exports and value addition.
The major concern on market access is the delay by EC to respond to ESA proposal on rules of origin. One way to improve market access conditions for ESA exports is to simplify the current rules of origin in Cotonou Agreement.
Study will be undertaken on rules of origin on textiles and clothing. The use of third country fabric on the same line as AGOA will be included in the draft protocol. The ESA secretariat will circulate the draft protocol for comments before discussing it at the next RNF.
There is a draft protocol on SPS measures. EC insists on compliance while ESA countries would like to see assistance by EU on the capacity building in order for companies to be in a position to comply with costly EU SPS measures and standards. Private sector standards will be addressed in the protocol.
Work is ongoing on the draft Protocol on safeguards and it will be revised to incorporate all trade defence instruments including trade remedies. Safeguards will apply to both parties.
Currently the list from 12 countries constitutes of 2,756 tariff lines out of a possible 5,115 tariff lines based on Harmonized System HS 1996.This constitutes 56.9% of total EU imports to ESA meaning that the list already excludes 57% of EU imports from gradual liberalization. The major concern is whether EC can accept 57% exclusion as "substantially all trade coverage". This is still a subject of negotiations and the list is still a subject for review.
Agriculture will be treated as a comprehensive standalone chapter. Issues on effects of subsidies and CAP reform on ESA economies and export of ESA agriculture products to the region and third country will need to be addressed.
Many ESA countries felt that they may not be ready to conclude negotiations by December 2007 although EC is very keen to see the negotiations concluded. An extension of negotiation period for at least three years is recommended.
There were various options available. Firstly, temporary continuation of the current trade arrangement under Cotonou Trade regime. EC would therefore need to take transitional measures, notify the WTO on the progress of negotiations and request for an extension period in order to conclude the negotiations. Secondly, conclude the negotiations by 31st December 2007 in key areas including development and market access with a provision for continuation of negotiations on outstanding issues. Finally, an extension of WTO waiver in order to continue trading under the current trade arrangement which is not WTO-compatible.
This article was authored by Walter N. Kamau, KAM Senior Executive Officer for Trade, on March 2nd 2007.
Source
