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Country prepares for negotiation of EPAs

Agencia de Informacao de Mocambique, Maputo

Country Prepares for Negotiation of EPAs

6 April 2007

The Mozambican government is preparing its position for negotiations with the European Union, scheduled to begin in May, on the controversial Economic Partnership Agreements (EPAs).

On Thursday, a seminar on the subject was held, bringing together officials of the Ministry of Industry and Trade, members of the business community and representatives of civil society.

According to Cerina Mussa, the national director of international relations in the Ministry, the country must prepare for the EPA negotiations, taking into account Mozambican national interests, summarised as development and industrial growth.

She said that countries of the ACP (African, Caribbean and Pacific) group, of which Mozambique is a member, must negotiate the new agreements now with the EU, since they are supposed to be signed by 1 January 2008, because the current ACP-EU trade arrangement, the Cotonou Accord, expires at the end of 2007.

The Southern African Development Community (SADC) intends to negotiate with the EU as a bloc, and the EU has accepted the request that South Africa be included in these negotiations, even though the Europeans do not regard South Africa as a poor country.

The EPAs will mark the end of most preferential deals for the ACP countries, and will force open the markets of the least advanced countries to European products, possibly with disastrous results for nascent industries.

The EU’s excuse is that it has no choice because the current preferential arrangements are regarded as "illegal" under the rules of the World Trade Organisation (WTO).

For the poorest countries, the EU has the initiative known as EBA (Everything but Arms), whereby all goods from those countries, except armaments, can enter the EU duty and quota free. But the EU has not extended EBA to SADC as a whole due to the presence of South Africa, regarded as far too rich for such treatment.

Last year, in its list of requests to the EU, SADC said it was not in a condition to put the services market on the negotiating table. It also suggested that the EU cooperate further with SADC to build up the region’s infrastructure and its legal framework. In its reply, the EU said that these matters should be negotiated.

"We have to decide about these replies, and so we have to undertake consultations so that we can see whether they protect us or not", said Mussa. "We have to decide what conditions we should demand before starting the negotiations".

The major concern for SADC countries in negotiating EPAs is that these should not be restricted to matters of trade, but should also guarantee development.

As an ACP secretariat presentation on the EPAs put it, their objectives ought to be "the sustainable development of the ACP states, their smooth and gradual integration into the world market, and the eradication of poverty".

Fears remain, however, that if developing countries are forced to open their markets to EU goods and services prematurely the result will be job losses, a drop in government revenue and cuts in public services.

The EU has tried to calm such fears. This week the European Commission issued a statement dangling a large carrot before the ACP states. It proposed to remove all remaining quota and tariff limitations on access to the European market for all ACP countries, with the exception of South Africa.

That, the EU says, will give the same access to the other ACP countries that only the poorest have so far enjoyed under the EBA initiative.

"This offer covers all goods, including agricultural produce such as beef, dairy produce, grain and all fruits and vegetables". the Commission statement said - but it would only take effect once the EPA agreement was signed.

For two products - sugar and rice - there would be "transition period to guarantee compatibility with the EU market reforms".

The Commission hastened to add that this is not dependent on an equivalent opening of the markets of the ACP countries. The EPAs would not create free trade areas as normally understood.

Nonetheless, the rules of the WTO, said the Commission, meant that ACP countries "will have to offer market access, but phased, with transitional periods of many years".