EU-Eastern and Southern Africa EPA faces collapse

The Southern Times | 6 August 2018

EU-Eastern and Southern Africa EPA faces collapse

by Prosper Ndlovu

THE full Economic Partnership Agreement (EPA) negotiations between the European Union (EU) and Eastern and Southern Africa (ESA) group of states could face collapse with the later citing frustration and uncertainty over the sincerity of its Western partners, 13 years since the talks began.

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Although ESA says it is committed to the full EPA process with EU, the bloc is unhappy with the sluggish progress. It accuses the EU of dragging its feet and rather preferring to enter into EPAs with individual African states outside the collective economic integration framework.

The EU has been engaged in EPA talks with the African, Caribbean and Pacific (ACP) group of countries since 2002, seeking to secure World Trade Organisation (WTO)-compatible trade pacts. According to a report presented to a Council of Ministers of Industry, Trade and Commerce meeting ahead of the 20th Comesa Summit of Heads of States and Government, there is now “a creeping sense of uncertainty” about the future perspectives of full and comprehensive negotiations between the two parties, unless the cooperation arrangement undergoes a deep and strategic transformation to adapt to changing realities the region.

The detailed report that was presented by the Comesa Secretariat, and seen by The Southern Times, indicates the EU was no longer showing any urgency towards full EPA negotiations, and appears satisfied with the interim-EPA - an arrangement that ESA grouping say was concluded under duress to avoid trade disruption.

“Engagement with the EU has not seen the momentum that is deserves, partly because the EU has consistently avoided convening a substantive negotiation session with the full ESA group for various reasons,” reads part of the report.

“The EU may appear to be happy with the interim-EPA and has effectively lost appetite to advance full EPA negotiations with the whole ESA group, ostensibly on account of the absence of new market access offers from non-i-EPA countries of the ESA group”.

ESA member states demand that the EPA with the EU must support regional integration and address enhance the capacity of the region to produce goods and services competitively, while at the same time addressing critical supply-side constraints.

In view of the recent conclusion and signature of the Continental Free Trade Area (CFTA), which will require coordination and harmonization of trade policies and arrangements within Africa, the Council of Ministers queried the EPA status with EU. The issue also falls on spotlight in light of the fast approaching post-2020 ACP–EU relations.

It is the contention of ESA grouping that the past 13-years of uncertainty have witnessed a lot of structural changes within the region and globally, which call for a complete remodelling of the EPA initiative. On the international level, the report notes there has been a fundamental shift to regional and global value chains, which will require EPA talks to address regional need for respect of rules of origin, for instance. It also observes that since 2002 EPA negotiations with ACA, the geo-political context of international trade and cooperation has witnessed a paradigm shift given the emergence of new global players. For instance, China has become the world’s biggest exporter after the EU while India, Brazil and other emerging economies are following suit. Emerging economies are already leading in world economic growth and are magnifying their presence in other developing countries, including in Africa. For the first time in recent history, developing countries collectively account for over half of world trade, delegates heard.

Given the ongoing global resource driven growth and the apparent race for Africa’s mineral raw materials, the report says ESA and Africa at large should remodel their economic strategy and increase its bargaining power in these negotiations with other trading bloc. Ironically, the EU, it noted, has already undergone some glaring changes and has more than 20 FTAs in force and other mega trade arrangements in pipeline or under negotiations.

“Such mega arrangements may impact negatively on Africa’s trade preferences with the EU,” reads the report.

Delegates expressed worry that major African countries such as Egypt, South Africa and part of ECOWAS already have separate EPAs with the EU, which raises questions about the merits of enhancing and prioritising African integration. The report further noted technicalities involved in the overlapping membership of regional states and the fragmented approach to handling the EPA agenda as many of those who signed the deal, especially under ECOWAS and EAC, have not begun effective implementation.

“With such a series of inherent distortions, it is difficult to pin down any broad proof as to the veracity of EPAs, at least in as far as regional integration in our region is concerned,” reads the report.

“As the first African region that is implementing an interim-EPA, the experience and lessons learnt so far are not encouraging for our region.”

On one hand ESA states have complained that commitments of development resources under Article 36 of the interim-EPA have not been forthcoming, despite undue sustained pressure on countries to deliver on liberalization obligations.

“By implication, we have to question whether the EPAs can serve as optimal answers for enhancing ESA’s global competitiveness and trade growth pathways,” reads the report.

As way forward, the report suggested that both parties, ESA and EU need to speed up negotiations towards a full and comprehensive EPA that meets regional integration ideals to avoid leaving other members behind.

It also demanded that all the 11 member states of the ESA group partake in negotiations of a full and comprehensive EPA, without exceptions with a bias on development issues and capacity building.

The ESA members include Zambia, Zimbabwe, Malawi, Comoros, Madagascar, Uganda, Kenya, Sudan, Ethiopia, Eretria and Djibouti. To that end, the ESA sub-region resolved to intensify national and regional preparations for full EPA negotiations with a focus on outstanding issues and to continuously share information on progress on the matter.

The meeting decried the haphazard negotiation process and sought to enhance continuous engagement. It is anticipated that the issue of EPAs at the Africa continental level will likely be tabled for discussion/negotiations under the trade pillar during Post Cotonou negotiations, the objective being the need for harmonization of trade policy at the continental level so that Africa can contribute meaningfully to its continental integration agenda.

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  • EU-Eastern and Southern Africa EPA faces collapse11-August-2018 | Jacques Berthelot

    There are several inconsistencies in the assertions that "ESA and EU need to speed up negotiations towards a full and comprehensive EPA that meets regional integration ideals". It is stupefying to see that Comesa wants to negotiate a full EPA with the EU despite the opposition of civil society, including farmers and industries, of most SSA countries. However it is in line with the roadmap for the post-Cotonou agreement adopted by the ACPs on 30 May 2018 in Lomé to "derive greater trade benefits and the developmental gains on which the EPAs are premised". It is also in line with the EU support to the African Continental Free Trade Area (AfCFTA) and its willingness to negotiate the post-Cotonou agreement with the whole Africa, including North Africa, and no longer with the regional economic communities (RECs). As the AfCFTA has decided to delete 90% of tariffs in intra-Africa trade, this would reduce the customs duties of most SSA countries beyond the 80% reduction on imports from the EU foreseen in most EPAs, and the MFN clause of the interim EPAs (iEPAs) of Cameroon, Ivory Coast and Ghana will force them to reduce also by 90% their customs duties on imports from the EU instead of the 75% of their iEPAs. To negotiate a single post-Cotonou agreement for the whole of Africa together with a single EPA is clearly to put the cart before the horse with a too fast top-down process of continental integration when there should be a longlasting bottom up process of reinforcing during at least one generation a full political integration of each REC, including with a significant redistribution budget to offset the loss of competitiveness of many countries and enterprises, before trying to enlarge it to the whole of Africa. In that perspective the reluctance of Nigeria to sign the West Africa EPA and the AfCFTA should be viewed as a salutary warning.

    Another inconsistency in this text relate to the ESA geopolitical perimeter. The article speaks of 11 Members when the ESA Summit of July 2018 claimed to have 21 Members (after Tunisia and Somalia joined in 2018). The only implemented EPA of ESA Members concerns four countries since 2012: Madagascar, Mauritius, Seychelles and Zimbabwe. But 4 of the 5 EAC Members (Kenya, Uganda, Burundi, Uganda) belonging to Comesa are negotiating a regional EPA with the EU and even if the fifth EAC member, Tanzania, is a member of the 15 SADC States, it is not in the SADC-EU EPA of 6 States, of which Swaziland and Namibia are members (as in Comesa). The DR of Congo is also in the whole SADC (but not in the SADC-EU EPA consisting of 6 States) and in the Central Africa EPA that only Cameroon has been implementing since August 2014.

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