The EPA negotiations, state of play and challenges

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The EPA negotiations, state of play and challenges
European Commission
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Summary

• Background of EPA negotiations
• Main issues
• The challenges ahead

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The present regime

• The Cotonou waiver
• The Cotonou trade regime is better than the GSP,
  fewer products excluded (tuna, cut flowers)
• It violates Article I GATT discriminates in
  favour of ACP countries
• Waiver granted in 2001 (Doha)
• But only until December 2007!

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This is why we need EPAs by 1 January 2008!
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The Cotonou mandate

• Set up a new trade regime, supporting the
  mutually reinforcing effects of trade cooperation
  and development aid.
• Objectives
• To promote smooth and gradual integration of ACP
  economies into the world economy
• To enhance production , supply and trading
  capacities
• To create new trade dynamics and foster
  investment
• To ensure full conformity with WTO provisions

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The EPAs

• Article 36 of the Cotonou Agreement
• WTO compatible agreements
• The parties will
• Remove progressively barriers to trade
• Enhance cooperation in all areas relevant to
  trade
• What this means
• Move from unilateral preferences to reciprocal
  trade liberalization

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The EPAs

• Why are EPAs unique?
• Trade agreements, whose objective is the
  sustainable development of the ACP states
• The EU does not have any specific offensive
  interest
• Based on the ACPs regional integration
  initiatives
• Strong asymmetry
• Link between trade and development cooperation

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The EPAs

• The regions
• West Africa CEDEAO Mauritania
• Central Africa CEMACSTP
• East and Southern Africa (ESA)
• Southern Africa (SADC)
• Caribbean
• Pacific

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The ESA EPA

• 15 (16?) countries all members of COMESA
• Building on COMESA regional integration process
• COMESA CET
• COMESA common initiatives in other fields
• The configuration / multiple membership issue
  difficult choices for some countries

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The content of the EPA

• Trade in goods (tariff liberalization, rules of
  origin, safeguards, SPS, TBT)
• Trade in services
• Trade related issues investment / establishment,
  competition, intellectual property rights, public
  procurement
• Development cooperation accompanying meausres

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State of play

• Commitment to meet 2007 deadline reaffirmed in
  the ministerial meeting on 28 February. Big
  challenge!
• A common text based on a text tabled by ESA last
  year and on EUs subsequent comments and
  proposals
• EU offer on market access (duty free quota free
  access). ESA to present its offer soon

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The issues at stake

• Rules of origin how to make them
  development-friendly
• ESAs offer gradual / asymmetric opening, but
  must be WTO compatible
• The development component how does EPA fit with
  the Cotonou framework for development finance?

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The issues at stake

• EPAs and development discussion still open
• WHERE IS THE DEVELOPMENT COMPONENT?
• The EU thinks development will be stimulated by
  trade opening, regional integration and adopting
  a common system of rules
• The ACPs want additional resources to the EDF
  but we have no additional resources, they will
  have to come from other sources
• The cost of trade liberalization revenue loss,
  reform