Economic partnership agreements: African–EU negotiations continue

Abstract

When they were first proposed by the European Commission to the African, Caribbean and Pacific countries — all signatories to the Lome and Cotonou agreements which provided them with preferential access to the European market — economic partnership agreements were presented as supporting regional integration and development. However, most African states regarded economic partnership agreements with suspicion, fearing that the agreements would limit their market access and their policy space. Progress on negotiations has been slow, and more than two years after they were supposed to have been concluded there are still a number of outstanding issues that the individual African regions and the European Commission have to resolve. This paper explores some of the difficulties and the progress made thus far, and proposes some measure that would address the concerns around development and regional integration in the context of the challenges posed by the global financial crisis.

Keywords:

• economic partnership agreements
• EPAs
• ACP
• SACU
• SADC
• trade
• regional integration
• ESA
• EAC
• ECOWAS
• EU
• Africa

Acknowledgements

An earlier version of this article appeared under the title ‘EPAs and the Post-Lisbon Implementation Status’, in a special issue of the Nordic Africa Institutes Policy Notes, 2009/2010, focused on the EU Africa Partnership Strategy.

Notes

1. The deadline came about because of a 2001 waiver from the WTO obtained by the EC and the ACP countries regarding the Cotonou Agreement, allowing for the continuation of the preference regime, but only until the end of 2007. Beyond that date, the EC would not be allowed to continue the preference regime without establishing a regional trade agreement under Article XXIV of the GATT. The waiver is given in WTO (World Trade Organization), ‘European Communities: The ACP–EC Partnership Agreement’, decision of 14 November, WTO Document WT/MIN (01)/15, <http://www.wto.org/English/thewto_e/minist_e/mmin01_e/mindecl_acp_ec_agre_e.htm> (accessed 13 June 2010).

2. World Bank Africa, ‘Regional Brief 2009’, <http://go.worldbank.org/3IGKDWFTG1> (accessed 2 May 2010)

3. UNECA.org, ‘Economic Report on Africa 2010’, <http://www.uneca.org/eca_resources/Publications/books/era2010/overview.pdf> (accessed 3 May 2010).

4. European Think-Tanks Group, New Challenges, New Beginnings: Next Steps in European Development Cooperation, February 2010, p. 39

5. Jessop D, ‘What happened to the Cariforum-EU EPA?’, Trade Negotiations Insights, 9, 3, 2010, p. 1.

6. Julian M, ‘EPA update’, <http://ictsd.net/i/news/tni/52360/> (accessed 20 August 2009).

7. See, for example, Tandon Y, ‘Salvaging EPA negotiations with Europe: A turning point for Africa’, Pambazuka News, 474, 18 March 2010, <http://pambazuka.org/en/category/comments/63120> (accessed 7 May 2010).

8. See, for example, Draper P, ‘On the future of the SACU’, Business Report, 9 July 2009.

9. Initialling an EPA signals a political commitment to the agreement. Such agreement would only become legally binding when ‘signed’, although it may still have to be ratified.

10. EBA is an initiative of the EU under which all imports to the EU from LDCs are duty free and quota free, with the exception of armaments. EBA has been in force since 2001.

11. ‘Report of the Portfolio Committee on Trade and Industry on the Annual Reports of the Department of Trade and Industry and its Entities for the 2008/09 financial year’, 25 February 2010, <http://www.pmg.org.za/docs/2010/comreports/100331pctradereport2.htm> (accessed 6 May 2010).

12. For discussion of South Africa's views on the EU approach to the EPA talks and their affects on SACU, see Davies R, ‘SA wants proper integrated, competitive regional market’, Business Report, 17 July 2009, <http://www.busrep.co.za/index.php?fSectionId=553&fArticleId=5086378> (accessed 9 June 2010).

13. BLNS countries would like to preserve their preferential market access for beef and other agricultural exports, but also for textiles and clothing, under more flexible rules of origin provided by the EPA, see Khumalo N, ‘EPA negotiations on trade in services: implications and recommendations for Southern Africa’, Working Paper, Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ), May 2008, <www.gtz.de/de/dokumente/en-epa-cariforum-and-beyond-services-implications-southern-africa-2008.pdf> (accessed 9 June 2010).

14. Art 67 (1) (b) (1) states that: ‘The Parties recognize that trade capacity building can support the development of economic activities, in particular in services sectors. To this end, the EC Party agrees to support capacity building aimed at strengthening the regulatory framework of the participating SADC EPA States’.

15. Khumalo N, ‘EPA Negotiations on Trade in Services: Implications and Recommendations for Southern Africa’, Working Paper, GTZ, May 2008, <www.gtz.de/de/dokumente/en-epa-cariforum-and-beyond-services-implications-southern-africa-2008.Pdf> (accessed 9 June 2010).

16. See Draper P & N Khumalo, ‘The future of the Southern African Customs Union’,Trade Negotiations Insights, 8, 6, 2009, <www.acp-eutrade.org/tni>.

17. Kruger P, ‘An update on the SADC EPA’, TRALAC, 23 March 2010.

18. Julian M, EPA Update, March 2010, <http://www.acp-eu-trade.org/index.php?loc=newsletter/acp-eu-trade/TNI_0210_nego-update_longer-version.php>

19. ‘Southern African Customs Union (SACU) — Communique from Meeting of Heads of State/Government of Member States 22 April, 2010’, Government of South Africa egov monitor, 29 April 2010, <http://www.egovmonitor.com/node/36059> (accessed 13 June 2010).

20. Benin, Burkina Faso, Cape Verde, Côte d'Ivoire, Gambia, Ghana, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone and Togo.

21. GSP exempts developed countries from strict compliance with the non-discrimination rules of the WTO for the purpose of lowering tariffs for developing and LDCs.

22. Nwoke C, ‘Nigeria and the challenges of the EPA’, Trade Negotiations Insights, 7, 9, 2008, <http://ictsd.org/downloads/tni/tni_en_7-9.pdf> (accessed 13 June 2010).

23. Nwoke, op. cit.

24. Ministry of Finance & Economic Planning, ‘Economic partnership agreement negotiations in limbo’, <http://www.mofep.gov.gh/news300909_1.htm> (accessed 3 December 2009).

25. Sedelan, ‘Is the ECOWAS ready to sign an EPA with the EU by June 30th?’, <http://www.abcburkina.net/content/view/705/45/lang,en/> (accessed 26 August 2009).

26. ECOWAS Press Release, ‘West Africa, Europe reiterate commitment to integration process’, 19 October 2009, <http://news.ecowas.int/presseshow.php?nb=112&lang=en&annee=2009> (accessed 4 December 2009).

27. ECOWAS Press Release, ‘West Africa, Europe reiterate commitment to integration process’, 19 October 2009, <http://news.ecowas.int/presseshow.php?nb=112&lang=en&annee=2009> (accessed 4 December 2009)..

28. European Commission, ‘EU and West Africa move forward on regional economic partnership agreement’, 17 June 2009, <http://trade.ec.europa.eu/doclib/press/index.cfm?id=139&serie=132&langId=en> (accessed 2 December 2009).

29. EPA Flash News, European Commission, ‘EU and West African experts hold technical workshop on services and investment in Praia (Cape Verde)’, <http://www.acp-eutrade.org/library/library_detail.php?library_detail_id=5262> (accessed 13 June 2010).

30. ESA comprises Comoros, Madagascar, Mauritius, Seychelles, Djibouti, Ethiopia, Eritrea, Sudan, Malawi, Zambia and Zimbabwe. Mauritius, Zambia, and Zimbabwe are members of both SADC and COMESA.

31. Ethiopia, Eritrea, Djibouti, Sudan and Malawi.

32. COMESA, ‘Selected countries in the eastern and southern African region sign EPA with the European Union’, press release, <http://www.comesa.int/lang-en/component/content/article/34-general-news/234-press-release-selected-countries-in-the-eastern-and-southern-african-region-sign-an-epa-with-the-european-union> (accessed 2 September 2009).

33. Munyaradzi M, ‘COMESA: Countries opt out of customs union’, 15 June 2009, <http://www.tralac.org/cgi-bin/giga.cgi?cmd=cause_dir_news_item&cause_id=1694&news_id=68199> (accessed 30 August 2009).

34. Lusaka Times, ‘Zambia: COMESA customs union launched amid controversy’, 8 June 2009, <http://www.lusakatimes.com/?p=13581> (accessed 26 August 2009).

35. Kenya, Uganda, Tanzania, Rwanda and Burundi.

36. Kenya is the only developing country in the group.

37. This clause prevents any increase in applied tariffs once the agreement is signed.

38. ‘A brief on the status of EAC-EC EPA negotiations’, TradeWorld, 1 April 2009 (A briefing on monthly updates from the Ministry of Trade, Kenya), 1, 1, <http://www.trade.go.ke/downloads/Keplotrade%20E-Newsletter%20April.pdf> (accessed 25 June 2009).

39. See Odhiambo A, ‘EAC states demand development deal before signing EU trade pact’, Business Daily (Nairobi), 29 July 2009, <http://www.tralac.org/cgi-bin/giga.cgi?cmd=cause_dir_news_item&cause_id=1694&news_id=70675&cat_id=1026> (accessed 15 August 2008).

40. Taken from the speech of Mr Timothy Clarke, head of EU delegation in Tanzania, during the Arusha policy dialogue meeting between the EU and EAC, held in February 2010.

41. Julian M, ‘EPA update’, November 2009, <http://www.acp-eu-trade.org/index.php?loc=newsletter/acp-eu-trade/TNI_1109_nego-update_longer-version.php> (accessed 5 December 2009).

42. Dalleau M, ‘The vulnerability-flex mechanism: a success story?’ Trade Negotiations Insights, 9, 2, 2010, <http://ictsd.org/i/news/tni/71125/> (accessed 13 June 2010).

43. Benin, Burundi, Central African Republic, Comoros, Ghana, Guinea Bissau, Malawi, Mauritius, Seychelles, Sierra Leone and Zamia.

44. Grenada and Haiti

45. This point is largely drawn from a paper by Bilal S, P Draper & DW te Velde, ‘Global Financial and Economic Crisis: Analysis of and Implications for ACP-EU Economic Partnership Agreements (EPAs)’, ECDPM Discussion Paper 92, Maastricht, 2009, <www.nai.uu.se/publications/series/notes/PN-EU-0910.pdf> (accessed 13 June 2010).