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EPA scoreboard : EU 1, SADC-EPA 0

On 4 April, 2007 the European Union (EU) announced through a press release that it would offer full market access to the African, Caribbean and Pacific (ACP) countries under the Economic Partnership Agreement (EPA) negotiations.

Quote, “The EU has today proposed to remove all remaining quota and tariff limitations on access to the EU market for all African, Caribbean and Pacific regions as part of the Economic Partnership Agreement negotiations. The offer covers all products, including agricultural goods like beef, dairy, cereals and all fruit and vegetables.” unquote.

This is indeed a generous offer from the EU, because it includes everything that was on the market access agendas of the six ACP configurations from the beginning of the EPA negotiations. However, before a hype of euphoria sets in, be reminded that the devil resides in the details.

On closer scrutiny, it should be noted that this is only an offer from the EU, not a commitment, contingent on the signing of an EPA agreement before or on 31 December 2007. The offer would then “apply in full from day one - planned to be 1 January 2008”.

Secondly, the offer does not cover all products, because there will be phase-in periods for rice and sugar. “The transition periods for rice and sugar will ensure compatibility with EU market reforms and ensure stability to protect the interests of both the EU and ACP producers who supply those markets.”

Thirdly, an issue concerning the Southern African Development Community (SADC) EPA configuration, “The only exemption will be South Africa where a number of globally competitive products will continue to pay import duties.” (No details were given on what products). The SADC EPA configuration consists of Botswana, Lesotho, Namibia, South Africa, Swaziland (all members of the Southern African Customs Union), Mozambique, Angola and Tanzania.

Special reference is made in the offer to the inclusion of a wide range of agricultural products (presumably due to its importance to ACP exports).

However, what is not mentioned is that these products are also subjected to the EU’s Sanitary and Phyto-sanitary (SPS), and Food Safety regulations (which are probably the most stringent in the world). In practice, it means that even though an ACP country has market access, but cannot comply with these regulations, then it still cannot export those products to the EU.

To take it one step further, if the offer includes all products as stated, then presumably this should also include value-added products. Apart from SPS and Food Safety regulations, value-added products are also subjected to EU labelling requirements.

So what then could be the real intentions behind the EU’s offer ? Could it be the attainment of signed agreements by a certain deadline despite the content of those agreements ? Given all of the above, it would seem like the EU is utilizing the stereotyped carrot-and-stick tactic to lure the ACP attention under the auspices of full market access contingent on the signing of an EPA by year-end. In such a process the attention is diverted from the real content of the agreement vis-à-vis the attainment of a deadline.

Should this be true, it would constitute an unjust way to exploit the gullibility of the ACP configurations for the sake of having signed agreements on the table in time. Note that South Africa took more than four years to negotiate their Trade, Development and Cooperation Agreement with the EU, which excluded services, investment, government procurement, trade facilitation, intellectual property rights, etc. - the so-called new generation issues.

While the SADC EPA position is not to negotiate these issues, the EU is insisting that these issues be kept on the negotiating agenda. In a communication from the European Commission (EC) to the European Council on 28 November, 2006 [SEC (2006) 1427] “It should also be made clear to SADC [EPA] that if, in the end, the region would choose not to make an effort in addressing those [new generation] issues, then the EC would find it difficult to improve SADC [EPA] access to its market.” This in itself could be construed as a strong-arm tactic to keep these issues on the negotiating agenda, in the absence of which the EU’s offer would thus not be applicable to the SADC EPA.

The irony is that while the EU is putting pressure on the ACP to sign EPAs by year-end in exchange for full market access, the European Parliament’s Committee on International Trade released a report in March 2007 [2005/2246(INI)] requesting the EC not to exert undue pressure on the ACP if agreement is not reached by the end of 2007 when the WTO waiver for the Cotonou trade preferences expires.

Furthermore, the Committee also requested the EC “to make efforts at WTO level to seek to ensure that disruptions of existing ACP exports to the EU is avoided pending a final settlement.”

Maybe from the side of the SADC EPA the EU should be congratulated on this excellent public relations effort to utilise a window of opportunity in the EPA negotiations to turn the scoreboard in their favour at exactly the right time.

Friday, 20th of April 2007

Wallie Roux is a Market Researcher at Meatco, but is writing in his personal capacity.