EPA News Update - September 2009

ESA

 

On 29th August 4 ESA countries have signed an interim EPA with the EU. They are Mauritius, Seychelles, Zimbabwe and Madagascar. The other two members of the ESA formation, Zambia and Comoros, decided in the last minute not to sign. The Comoro Islands justified their decision not to sign by stating that they are currently under de facto control of the International Monetary Fund and therefore had some institutional difficulties to sign. Zambia declared that it intended to sign, but at this time preferred to let others go ahead and lead the group from behind. It is clear that in both cases these are excuses and that the countries in question are not interested in signing the EPA, at least not in its current form. Since both countries are classified as Least Developed Countries (LDCs) they benefit from the Everything But Arms (EBA) program of the European Commission. This means that their refusal to sign the interim EPA will have no practical consequences for them and allow them to continue to trade with the EU without being exposed to tariffs.

The formulation of the Most Favored Nation (MFN) clause still leaves the ESA countries, also those who signed the interim EPA unhappy and should be discussed again in the negotiations towards a full EPA.
In his speech during the signing ceremony Sindiso Ngwenya, Secretary General of the Common Market for Eastern and Southern Africa (COMESA) lamented how the EU had split the ACP countries in several geographical regions for the EPA negotiations, hampering thus a common approach. Referring in particular to the Eastern and Southern African region he pointed out that having SADC, ESA and EAC signing separate EPAs risks to have an adverse impact on the regional integration process. At the same time he stressed how the EPA process had hitherto done nothing to deepen regional integration.

The signing of the full EPA, which should include not only trade in goods but also services and intellectual property rights is currently foreseen for late October, but at this stage it is impossible to predict whether this date will be respected or not. Also Zambia and Comoros, which refused to sign the interim EPA declared their interest in continuing the negotiations and signing a full EPA.

 

EAC

 

The EAC countries signaled that they are in no hurry to sign the interim EPA with the EU. The EAC countries want to see contentious issues, such as the MFN clause and additional development aid, tackled before signing. As all EAC countries except Kenya are LDCs benefiting from the EBA program of the EU, Kenya is the only country of the region risking consequences from not signing. However, also Kenya's trade minister declared that a signing is extremely unlikely before the new European Commission takes office at the end of this year.

 

ECOWAS

 

No progress has yet been made in the EPA negotiations with ECOWAS region and a further round of negotiations is scheduled for end September. In the last negotiation round end July West African negotiators presented a new market access offer at the meeting that foresees liberalization of 63.12 percent of trade over 25 years (2010-2034). EC negotiators "took note" of the new proposal stressing that the improvement is marginal and that the offer would not foster economic development in the region. If no progress in the negotiations with the region as a whole are made soon, pressure is likely to increase on Côte d'Ivoire to implement the separate interim EPA it has signed with the EU. Côte d'Ivoire is the only country of the region having signed an interim EPA with the EU, as Ghana has initialed an interim EPA but not yet signed it.

 

SADC

 

Despite heavy criticism by fellow Southern African Customs Union (SACU) members against Botswana, Lesotho, and Swaziland for signing the interim EPA together with Mozambique in June 2009, countries remain focused on the implementation of the interim EPA. Negotiations continue on outstanding issues, and regional representatives have reaffirmed that negotiations towards a full EPA covering trade in services, investment, and trade related issues will be held in near future. SACU countries say they are concerned about the operation of the customs union. Speaking at the Southern African Forum on Trade, Xavier Carim, Deputy Director-General of International Trade in South Africa's Department of Trade and Industry reaffirmed that because only some SACU countries have signed the Interim EPA with the EC, customs controls and rules of origins controls will have to be strengthened within the region.