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EPAs future still hanging in limbo

The Daily Times, Malawi

EPAs future still hanging in limbo

By Caroline Kandiero

23 May 2012

The future of the country in signing the Economic Partnership Agreements (EPA) still stands in limbo due to the current change of government administration in the country.

Economic Partnership Agreement are a new set of trade rules aimed at creating a free trade area (FTA) between the European Union (EU) and the African, Caribbean and Pacific (ACP) countries like Malawi.

Since 2008 Former president Late Bingu wa Mutharika had refused signing of the EPAs.

Mutharika argued that EPAs favoured the industrialised world hence Malawi would not stand to benefit from the agreement.

Responding to a questionnaire as to whether the new administration will sign the agreement or not, Minister of Industry and Trade said there is need for fresh consultations on the matter.

John Bande said the new administration will take its time to consult all relevant stakeholders on the matter to come up with a better stand that will benefit the country.

"As a government of the people we need to weigh the pros and cons of signing the agreement through consultations with all stakeholders in the country. This calls for fresh consultations on the matter," said Bande.

He said the stand on the matter will be made after consultations are done.

"We do not want to make a hasty decision once consultations are through, we will let the public know Malawi’s stand on EPAs.

"For Malawi to effectively implement the EPAs, it is important to address institutional, infrastructural and capacity factors that have stopped the country from taking advantage of previous preferential access to the EU market, which will be addressed in the accompanying strategy to be discussed with the EU," said Bande.

During the 16th Joint Africa, Caribbean and Pacific – European Union (ACP-EU) Ministers of Trade Committee (JMTC) meeting in Brussels in December last year Malawi was among some of the countries that were given time to consider signing for the EPAs.

The meetings’ main agenda was among others was the state of play of the EPAs in its seven configurations.

The meeting had also proposed EU amendment to regulation 1528/2007 that seeks to remove from the list of beneficiaries’ countries that initialed or signed the EPAs but have not yet endorsed them.

Director of Trade in the European Council Peter Thomson then said the EC is ready to work with Malawi in its trade and economic programmes.

Thomson emphasised that Malawi being a Least Developed Country (LDC) and a beneficiary of Everything But Arms (EBA) initiative, should take its time to thoroughly consult on the best national strategy for the EPA implementation.

In 2010 in one of its reports the Malawi Economic Justice Network (Mejn) said EPAs would reinforce Malawi’s position as an exporter of low-value agricultural commodities and will deprive the government of policy space to use tariffs to protect livelihoods and food security and to foster the growth of a manufacturing sector.

Mejn said EPAs was likely to have significantly negative effects on Malawi’s trade with other countries in the region and undermine ongoing regional integration processes.

"EPA also threatens to lead to the loss of tariff revenue and to cause significant adjustment costs.

Expectations at the beginning of the negotiations in 2002 was that EPAs would offer an improvement over the Lomé trade preferences, in addition to complying with the World Trade Organisation (WTO) provisions," said Mejn.

Mutharika had also criticised EU for negotiating through new regional groups such as East and Southern Africa (ESA) bloc and not original groups such as Sadc and Comesa.