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TRADE-AFRICA: EPAs Negotiations Trudging Along Slowly

Stanley Kwenda

JOHANNESBURG, Apr 10 2009 (IPS) - Talks between African countries and the European Union (EU) on the economic partnership agreements (EPAs) have stalled over a series of contentious issues that several countries want negotiated before they will sign full EPAs.

SEATINI's deputy executive director Rangarirai Machemedze: ''EPAs will reduce policy space'' Credit:  Stanley Kwenda/IPS

SEATINI's deputy executive director Rangarirai Machemedze: ''EPAs will reduce policy space'' Credit: Stanley Kwenda/IPS

The parties have so far failed to conclude the signing of comprehensive EPAs which were initially supposed to have been finalised by the end of December 2007.

Following the failure to sign a full EPA African countries were pressurised by the EU to sign an interim EPA to avoid the disruption of existing trade. The interim agreements cover trade in goods and include commitments by African countries to conclude comprehensive EPAs.

No new deadline has been set but some countries have announced that they are ready to sign despite the fact that some of the most contentious issues have not been resolved.

‘‘Talks have somehow stalled though the whole situation is a bit confusing. Right now they are taking place on a political level rather than technical level because of the numerous issues that need to be discussed,’’ Percy Makombe, Economic Justice Network (EJN) programme manager told IPS at a two-day media workshop on EPAs in Johannesburg, South Africa, on Mar 6-7.

EJN is a Cape Town-based non-governmental organisation. It was formed in 1997 by the Fellowship of Christian Councils in Southern Africa (FOCCISSA) to be its economic and social arm.

‘‘The kind of trade mechanism being established under EPAs is warfare. It creates a do-or-die situation which will lead to many people in Africa being dumped further into poverty because it’s not premised on fairness and does not provide scope for development issues,’’ Makombe argued.

The one-size-fits-all approach is not good for Africa. ‘‘Trade has never been based on reciprocity. If Europe took into consideration the needs of its smaller members, such as Portugal and Greece, when it was putting together its economic cooperation model, why can’t they do the same for African countries?’’ Makombe wondered.

‘‘The EU is just hopping, skipping and jumping without considering real investment in African countries,’’ Richard Kamidza, a Johannesburg-based EPAs researcher, told IPS.

‘‘Europe simply wants to produce more, therefore they want a bigger market for their goods. If Africa opens up its market then it will kill jobs. This will take us back to the economic structural adjustment era where second hand goods were dumped into our backyards.’’

But what are the contentious issues that have seen many African countries resisting the urge to sign a full EPA?

African countries argue that several provisions which are unnecessary when measured against World Trade Organisation (WTO) rules were included in the interim EPAs signed last year.

Among some of the major criticisms has been the lack of technical and negotiating capacity which had characterised ACP participation in the talks. The interim texts were hastily concluded to maintain ACP market access in the EU.

According to trade experts the interim EPAs are far from being ideal texts. The experts argue that, the fact that they were concluded by individual countries has resulted in divisions among ACP regions to the extent of jeopardising regional economic integration.

The concessions made within these agreements are greater – both in extent and scope – than what is required to ensure conformity with WTO norms.

The provisions include the standstill clause which stipulates that no new tariffs can be introduced and, once eliminated, tariffs may not be re-imposed or increased. The interim agreement also stipulates that African countries have an obligation to eliminate existing export taxes and refrain from imposing additional taxes.

But the most contentious issue remains the most favoured nation (MFN) clause which obliges African countries to extend to the EU the same favourable treatment conceded to any other developed or major developing country in future trade agreement.

The parties also still need to agree when liberalisation should be suspended to protect infant industries threatened by closure from a surge in imports.

The EU has created an EPA template for use by all Africa countries. African countries have responded through an EPAs declaration issued on March 20 this year at an African Union trade ministers meeting in Addis Ababa.

The declaration reads in part, ‘‘We call upon the Africa group in the WTO, in collaboration with other members, to intensify efforts towards appropriately amending Article XXIV of GATT 1994 with a view to allowing for necessary Special and Differential Treatment, a less-than-full reciprocity principle and explicit flexibilities that are consistent with the asymmetry required to make the EPA’s development oriented.’’

Rangarirai Machemedze, the deputy director of the Southern and Eastern African Trade Information Negotiations Institute (SEATINI) told IPS that the EPAs would affect African countries in negative ways.

‘‘The implementation of the initialled agreements is likely to have a direct impact specifically on fiscal revenues; policy space available to promote developmental objectives, such as economic diversification; the promotion of new industries and food security; and the capacity to pursue regional economic integration objectives,’’ Machemedze indicated.

The Southern African Development Community (SADC) EPA group and EU agreed on some of the contentious issues at a meeting held in Swakopmund, Namibia, from March 9 to 11 this year.

The meeting adopted Lesotho’s call for the recognition of its position as a least developed country (LDC) within SADC and also agreed to more favourable terms for infant industry protection in order to allow SADC countries to earmark some sectors for exclusion from liberalisation for development reasons.

In addition to allowing existing export taxes to continue, agreement was reached on providing scope for the introduction of new export taxes by mutual agreement when justified for industrial development reasons and to draw up quantitative restrictions of exports in favour of the SADC group, subject to WTO provisions.

The two groups also agreed on the principle of the free circulation of goods to facilitate trade, products exported from EU to SADC EPA states or vice versa and re-exported to other countries that is signatory of the agreement. African countries are negotiating EPAs in different regional groupings.

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