10 December 2010
EU, SADC teams miss EPA deadline
SADC states and the European Union have missed the year-end deadline for the completion and signing of a full Economic Partnership Agreement (EPA), a target set in June and designed to bring finality to the complex process.
Following the expiry of the Cotonou Agreement, the seven SADC states, Botswana among them, began lengthy negotiations for a new trade agreement, but the process eventually failed to meet the original December 2007 deadline enforceable by the World Trade Organisation.
In June, ministers from the SADC EPA group met in Gaborone and approved timelines for the finalisation and signing of a comprehensive EPA with the EU. The group also committed itself to meeting several milestones, working with the EU to iron out the various outstanding issues and concerns.
Since June, SADC states and the EU have met on at least three occasions at several levels to negotiate the most contentious of trade issues with the year-end deadline in mind.
This week, sources close to the trade talks told BusinessWeek that the December deadline would definitely be missed as another round of talks was now scheduled for the end of February 2011.
Insiders on both sides stressed that the continuation of talks beyond 2010 was "a mutually taken decision in the spirit of continuing cooperation" and that neither side held any resentment for the other for the delay in negotiations.
"We had planned that the agreement would be done by 2010, but the agenda proved very long and there are many issues outstanding," said one insider. "We have not finished the list of outstanding items and concerns.
"Also, the EU has said it wants SADC to consider certain trade-related issues and we expect that they will bring some language for consideration by the region.
"The EU will submit some proposals on the language of these trade-related issues. We are making slow progress. For instance, the EU has agreed on certain issues in the rules of origin discussions, but others are outstanding."
Along with market access, rules of origin and various sub-topics have proved a major sticking point in the trade talks. It is understood the two sides have agreed on the concept of cumulation, a facility that helps manufactured goods meet the relevant origin rule.
Another hot potato is discussions around the Most Favoured Nation (MFN), a status accorded by the EU to certain states and groups giving them the most favourable tariff and regulatory treatment to certain or all products.
"The SADC EPA group could require political guidance on the MFN issue because at the technical level, negotiators have done everything they can and it does not appear the ice can be broken," another source close to the trade talks said.
"They are unable to accept what our negotiators are saying to them and we are also having difficulty with their proposals. It’s a no-win area and we will need political guidance."
Officials from both sides said the negotiations were being conducted in a "refreshed" atmosphere, in contrast to the iron curtain that fell over the process last year when four of the SADC states signed an interim EPA with the EU.
"The atmosphere is very positive," said one. "The feeling within both parties is that where you cannot make immediate progress, there should be compromise. However, there is a feeling that some countries within the SADC group could view the missed deadline as a sign that they can keep pushing the EU," said another conversant with the EU’s take on the negotiations.
"There is the issue of the WTO coming in, but they (WTO) also understand that trade talks take long. However, the EU will be wary of certain states exploiting the WTO’s understanding to then take issues beyond reasonable time limits."
It is feared rival regional configurations eyeing the EU market could force the WTO to take action on the delayed negotiations with the SADC EPA. It has also been suggested these rivals could point out that certain states within the SADC EPA are benefiting from preferential treatment in the EU while they are yet to sign the comprehensive trade deal.
Lesotho has offered to host negotiators from both sides for the February meeting when it is expected new timelines will be drawn up for the EPA’s finalisation. Once the full EPA is signed, focus will shift to the 2014 deadline for negotiations on trade in services and investment.