EU aims to rope in African states resisting EPAs
IPS | 26 Feb 2008
TRADE: EU Aims to Rope in African States Resisting EPAs
Analysis by Aileen Kwa*
GENEVA, Feb 26 (IPS) — The European Union is determined to get those African countries on board which have so far kicked against the economic partnership agreements (EPAs). At the end of 2007, only 35 out of 78 African, Caribbean and Pacific (ACP) countries had initialled EPAs.
Apart from the 15 Caribbean countries which had initialled a full EPA, the other 20 African and Pacific countries had agreed to interim agreements which only cover the liberalisation of goods and agricultural products.
Many ACP countries had major misgivings about the EPAs. But most of those without least developed country (LDC) status were threatened by the possibility of having their exports disrupted. This would have happened at the expiry of their Cotonou agreement market access preferences to the European Union (EU) at the end of December. Thus they caved in.
In contrast, the pressure was not that great on LDCs as they are able to continue their exports to the EU under the Everything-But-Arms trade provision. The only non-LDC countries that did not initial EPAs were Nigeria, Congo-Brazzaville, Gabon, South Africa and seven Pacific Island states.
The two regions that were most opposed to the EPAs were West Africa and the Pacific. Both these regions saw only two countries each signing on, Cote d’Ivoire and Ghana and Fiji and Papua New Guinea respectively.
Most of the West African states refused to initial an interim agreement. They are clear that they want to negotiate a ‘‘friendly’’ EPA. They have given themselves two years, up to 2009, to do this. As a first step, they recognise that within the region, there is much work for them to do before they can agree on the contours of liberalisation with the EU.
The farmers’ movement in some of the West African countries has made its voice heard. Having suffered the detrimental impacts of the flood of food imports in the past decade, they want their region to have higher tariffs on agricultural imports than is currently the case.
Some countries in West Africa, such as Nigeria, already have fairly high tariffs. The work internally is to raise the existing tariff levels, harmonise these levels within the region, and then work out ways to negotiate the EPA with the EU on this basis.
According to Marc Maes, an EPA expert from the Brussels-based development organisation 11.11.11., the West Africans were angry that the EU had pushed Cote d’Ivoire and Ghana to the point where they had signed individual EPAs ahead of the rest of the region.
The region wanted to move ahead together and now that task has been made so much more difficult unless changes can be made to the interim agreements that have been signed by these two countries.
In Central Africa, countries have signed individual EPAs protecting various sensitive products. It will be challenging to harmonise the different schedules and convert the interim agreements into full EPAs at the regional level.
According to Maes, ‘‘the region is now in pieces. The pieces will have to be brought together. The countries need to find common ground and this will take time’’.
A European Commission (EC) official told IPS, ‘‘the interim agreements that were initialled at the end of last year with Pacific and African countries were a means to secure and even extend their market access to the EU, given the expiry of the WTO (World Trade Organisation) waiver.’’
The WTO waiver refers to an interim breathing period allowed by WTO states to the EU and ACP to bring their trade arrangement in line with WTO rules.
Maes spoke to IPS about the EC’s 2008 work plan, saying, ‘‘they are going to be pretty determined and aggressive. In each of the interim agreements, they have clauses for accession.
‘‘For example, in West Africa, where only Cote d’Ivoire and Ghana have initialled an interim agreement, they want the outstanding countries in that region to accede to this agreement. The interim agreements also have rendezvous clauses which are commitments to further negotiations that include the services and trade related issues.
‘‘They are going to push as hard as they can to make those countries that signed the interim agreements live up to these rendezvous clauses, and those that have not signed any agreement to do so.’’
According to Maes, some rendezvous clauses, however, are more aggressive than others. In the Southern African interim EPA, countries had agreed to the liberalisation of one service sector the moment the full EPA is signed and that they would open up other services sectors in the following three years. Other agreements are less specific.
Will negotiations in 2008 be as contentious and fraught with tension between the two sides as in 2007? According to Maes, the EU seems to be backtracking on its promises to the ACP once again, and there could possibly be a fight over this.
‘‘In Lisbon (at the EU-Africa Summit in December 2007), as a result of the public outcry by APC countries over the EPAs, Jose Barroso (the EC president) promised that he would meet all the ACP regions at high level this year and that the interim EPAs that had been signed in haste will be revised.
‘‘The ACP countries, in their resolution of December 13, 2007, welcomed the Barroso proposal. They want these interim agreements to be reviewed at these high level meetings, and for the contentious issues to be taken out.’’
But, said Maes, ‘‘now the Commission is backtracking. Peter Mandelson (EU trade commissioner) told the European parliament at the end of January that the Commission will not look backwards but forwards.
‘‘They see the high level meetings as opportunities to launch negotiations for the full EPAs and that, in the context of negotiating full EPAs, the interim agreements can be improved upon.’’
* The first in a two-part series
TRADE-AFRICA: EU Still Pushing Offensive Interests in EPA Talks
Analysis by Aileen Kwa*
GENEVA, Feb 26 (IPS) — The European Union (EU) has an ambitious agenda for the economic partnership agreement (EPA) negotiations. It is pushing for the conclusion of full agreements in the next one to three years, covering everything from services to ‘‘trade-related’’ issues such as investment, competition and government procurement.
The latter include issues, also called ‘‘new generation’’ or ‘‘Singapore issues’’, which developing states successfully blocked in the World Trade Organisation (WTO) as they were regarded as detrimental to development. The issues first arose in the run-up to the WTO ministerial meeting in Singapore in 1996.
A European Commission (EC) official told IPS, ‘‘we want to finish negotiations on outstanding issues in 2008. The interim agreements so far include provisions on market access, development cooperation and revised rules of origin.
‘‘We want to continue negotiations on services, investment and trade-related rules. This is the work plan for this year. We will continue negotiations at regional level in order to bind all ACP (African, Caribbean and Pacific) countries into full EPAs.’’
According to the official, who spoke on condition of anonymity, ACP countries would be willing to enter into expanded EPA negotiations. ‘‘Transforming the interim agreements into full trade and development agreements means going beyond market access and including wider issues, such as trade-related rules.
‘‘We believe that market access alone is not sufficient to help their economies integrate into the global economy.
‘‘Preferential access granted under the Cotonou agreement has not contributed to increasing the world trade share of the ACP. Creating a more predictable business climate with transparent trade rules could make their markets more attractive for investors,’’ said the official.
Marc Maes, an EPA expert from the Brussels-based development organisation 11.11.11., has a different opinion regarding this expanded EPA agenda: ‘‘The trade-related issues which the EC seeks to negotiate belong to its most offensive interests.
‘‘These issues can seriously reduce the ACP countries’ policy space while it remains uncertain whether they really will attract many investors. Investors not only look at rules but also at infrastructure, the proximity of lucrative markets and the availability of skilled workers,’’ Maes pointed out.
The interim EPAs include trade in goods. The EU’s full EPA agenda also includes other trade rules. The liberalisation of services and the liberalisation of rules in investment and competition will guarantee the EU’s services companies access to the African markets.
The EU wants services to be liberalised across the entire spectrum: professional, business, telecommunications, distribution (retailing / wholesale services); environmental; financial; transport; energy; tourism and so forth.
These negotiations will entail African countries being expected to make commitments to remove any domestic regulation they have that could impede European companies in accessing these markets.
This could include removing any existing limitation on land ownership rights for foreign enterprises.
It also could include scrapping laws subjecting foreign corporate takeovers to government approval; laws that require foreign investors to form joint ventures with local companies should they enter the market; and laws limiting the scope of operation of foreign investors.
The liberalisation of investment rules could also mean getting governments that currently have ‘‘positive discrimination’’ regulations to scrap such rules if they are not deemed to be in the interest of foreign investors.
For example, some countries may mandate their banks to put aside a certain percentage of their loans for small farmers. Such rules may have to be cancelled.
The EC will also demand that foreign companies be given the same rights and privileges as local companies, includes government subsidies and support.
The new issues will also include the liberalisation of government procurement. All government projects and purchases will have to be opened to bidding by European companies.
In order to boost employment and strengthen local companies and industries, government contracts to build schools, hospitals and to set up information technology are often provided to local companies.
If the new government procurement rules are agreed upon, this will no longer be possible. European companies will have to be given equal access to all government projects and purchases.
There is uncertainty about how far the EC will able to push the ACP in the months ahead. According to Maes, ‘‘by the end of last year there was a lot of opposition. Relations between the EC and ACP negotiators have been soured. They are very frustrated by the pressure the EC exerted and what they saw as the mercantilist ambitions of the EC.’’
But there are two areas which the EU is likely to use to pull ACP countries back to the negotiating table in 2008. According to Maes, ‘‘under the EPAs, some rules of origin (market access rules dealing with the ‘nationality’ of products) have been improved upon compared to what countries had under the Cotonou agreement, for instance in fish and textiles.
‘‘However, on the whole these rules have not been improved upon. The EU could propose negotiations to make these rules less burdensome for the ACP countries.
‘‘The other area is development. The development chapters (where the EU is supposed to outline how they can support the ACP with aid) are incomplete and also have to be improved upon.’’
* The second in a two-part series.
