EU wants EPA concluded. But is the Pacific ready?

Islands Bsiness | 12 Jan 2012

Cover Report: EU wants EPA concluded. But is the Pacific ready?

Samisoni Pareti

Ten years of negotiations with the European Union for an economic partnership agreement and the Pacific members of the ACP group still haven’t got a permanent deal.

Both parties are now adamant that an EPA ought to be sealed and signed before the end of 2012, although scepticism is mounting that such a preferred outcome may be wishful thinking at best.

To begin with, EPA negotiations had gone way past its original deadline of 2007/2008.

In addition, out of the 15 Pacific countries that are members of the ACP bloc, only two countries have signed interim EPAs with the EU, and out of those two, only one is actually trading under its interim agreement.

Furthermore, there has been no formal negotiation between the two parties for over two years now.

There has also been very little response from the EU to submissions on market access offers and on the draft legal texts by Pacific ACP states.

Not helping one bit is the constant changes in the negotiation teams of both sides.

For the Pacific ACP states, it has had three or four changes in the role of Lead Spokesperson for the negotiations.

It started with Fiji’s Foreign Minister Kaliopate Tavola in 2002, transferred to Hans Joachim Keil of Samoa and now the role is being taken up by Tonga’s Lisiate ‘Akolo. And the changes are not limited at ministerial level only.

The Pacific Islands Forum Secretariat which acts as the Secretariat of the Pacific ACP states is now searching for a new head of its Trade Division. Incumbent and former AusAID trade negotiator Dr Chakriya Bowman has resigned and returned to Australia.

Also gone is New Zealand’s Dr Chris Noonan, who as Chief Trade Adviser based in Vanuatu was responsible for advising Forum member countries on negotiations for the proposed PACER Plus free trade agreement with Australia and New Zealand.

There have been major changes too in the European Commission negotiation lineup.

The ability of the islands countries to stay together and negotiate together is also a big question mark.

Opting to negotiate with the EC as a bloc and not bilaterally, the Pacific position was shattered when their two biggest members, PNG and Fiji, deliberately defied the unified position and negotiated individually for an interim EPA (iEPA) instead.

Port Moresby has since ratified its interim EPA and is now trading its tuna under this agreement with EU member states.

Fiji, on the other hand, has yet to ratify its interim EPA.

A retired Pacific trade negotiator Islands Business magazine consulted was pessimistic about the chances of the region sealing a permanent EPA with the EU by the end of the year.

Speaking on the condition of anonymity, this trade adviser says current indications are not looking good for a speedy resolution.

“An agreement that was supposed to have been concluded in 2007/2008 but negotiations for which will continue in 2012 is indicative of something going amiss.

“We know what is amiss. It lacks developmental measures that should have been the whole basis of it.

“What is development was not agreed to earlier to guide the negotiations. In fact both sides have contrasting ideas about development.

“PACPS’ (Pacific ACP states) main interest in Mode 4 (Temporary Movement of Natural Persons—TMNP) cannot be met by the European Commission because it does not have the mandate to negotiate on this. The mandate still rests with the EU member states.

“It is not clear what the EU makes of the 6 or 7 market access offers that were sent in last July and the texts of the contentious issues that accompanied them.

“I have not heard about the EU jumping up and down with great glee. This may be saying: this is not good enough, please improve them.

“But can the PACPS improve on them? I’m beginning to doubt that. PACPS, especially the SIS (small islands states), are definitely asking the fundamental question: What is there for me? No TMNP!

“Extension of the fisheries rules of origin in iEPA to cover goods 1604/1605 is problematic and prospects are increasingly in doubt!

“They can now turn to Australia New Zealand for TMNP/seasonal work schemes.

“As for fisheries, FFA and PNA members are becoming unified in their intent to protect our fisheries and to seek the best returns from big fishing nations that, to some extent, had got things so easy in the past.

“EDF is there, but will it continue to come post-2020 when the ACP-EU relations is a big question mark?

“Maybe the US will fill the void with its re-ignited interests in the Pacific, arising mainly from its focus on Asia/SE Asia, the new economic giant.

“Maybe AfT (Aid for Trade) will come on stream by then?

“Now the EU is threatening that some ACP states are to be removed from the list of countries benefitting from preferential access to the EU markets through its proposed review of Market Regulation No.1528/2007.

“It may not happen because the proposal is full of legal constraints.

However, the threat does not improve the negotiating environment.

“Fiji itself may be de-listed because it has not ratified the iEPA, although it has initialled and signed it.

“If that happens, Fiji will face increased duties on its exports to the EU. But the delay has only hardened attitude.

“Look at the tone of the statement from the ACP Council in Brussels just recently concluded!

“The fisheries issue is what to me underlines the lack of EU commitment and direction in the EPA negotiations.

“Initially, PACPS had proposed a Fisheries Partnership Agreement to the EU with an access provision which was quite generous.

“The EU threw it away because it was quite happy with its bilateral agreements existing then.

“The EU then offered global sourcing under ROO (rules of origin) in iEPA and the PACPS wanted this extended to goods 1604/1605 under the comprehensive EPA.

“The EU then had second thoughts and insisted again on an access provision to the regional fisheries resources as a condition for this extension of global sourcing.

“Last July, PACPS reverted to the EU saying yes to an access provision but the EU will need to negotiate this bilaterally.

“The region as a whole was not prepared to make a commitment. I understand this has irked the EU. I do believe the comprehensive EPA is looking very uncertain now.

“Attitudes have hardened. The potential benefits are looking in doubt.
“Other developments are taking place in the world and in the region—enough to divert PACPS interests.

“To stick my neck out, it will probably end up with more PACPS opting for the iEPA (with some changes here and there). Fiji may feel obliged to ratify the iEPA. LDCs in the PACPS will opt for EBA and/or some form of enhanced GSP.”