Context and State of play in the EPAs
Negotiations in the SADC Region
Richard Kamidza
Regional Trade Policy Advisor
Hub & Spokes Project
SADC Secretariat
Private Bag 0095
Gaborone
Botswana
rkamidza@sadc.int or richard.kamidza@gmail.com
+67 74 337 037 or +267 3951077
Structure of my Presentation
1. Introduction
2. ESA / SADC EPAs Negotiating structures
3. Context & State of Play in the EPAs process
• EAC Current Status
• ESA Current Status
• SADC EPA Current Status
4. EU market Access Regulation 1528/2007
5. What should stakeholders do?
6. Conclusion
Introduction
 EU-ESA Configuration joint roadmap was launched in
February 2004, in Mauritius;
 EU-SADC EPA Group joint roadmap was launched in July
2004, in Namibia;
However, EPAs divided
 Africa into 4 fragmented & vulnerable configurations:
•
ECOWAS; CEMAC; ESA; & SADC;
 SADC Member States (See table below);
Sao Tome & Principe
Gabon
Cameroon, Chad
Central African Republic,
Republic of Congo
CEMAC
GROUP
Equ. Guinea
DRC
Angola
SADC
Mozambique
Tanzania
SACU
Botswana
Lesotho
Namibia
South Africa
SADC EPA
GROUP
KEY
SADC
COMESA
SACU
Ioc
EAC
CEMAC
Swaziland
Burundi
Kenya
Uganda
Rwanda
Djibouti
Eritrea
Ethiopia
Sudan
– Southern African Development Community
– Common Market for Eastern and Southern Africa
– Southern African Customs Union
– Indian Ocean Commission
– East African Community
– Economic Community of Central African States
EAC
EASTERN &
SOUTHERN
AFRICAN
EPA GROUP
Malawi
Zambia
Zimbabwe
Mauritius
Seychelles
COMESA
Comoros
Madagascar
IOC
Overlapping between different regional
integration processes in Southern
Africa and new groups formed for the
purpose of negotiating Economic
Partnership Agreements (EPAs) with
the European Union
Introduction (Contd.)
Major objectives of EPAs negotiations are:
• To be an instrument of sustainable development;
• To support regional integration among the ESA or SADC EPA
Member States or SADC region;
• To be compatible with WTO rules (outcomes must
progressively abolish substantially all trade restrictions);
• To take into account different needs and levels of development
of contracting parties (EU & ESA or SADC EPA countries) by
providing sufficient scope for flexibility, special & differential
treatment & asymmetry, especially on LDCs, small &
vulnerable economies, landlocked & small island countries;
• To contribute to poverty alleviation (reduction);
• To support the integration of ESA & SADC EPA countries into
the world economy;
ESA / SADC EPAs Negotiating structures
ESA & SADC EPA configurations’ negotiating institutions/structures:
 Regional Secretariats (COMESA & SADC EPA Unit) – central to the
process;
 Chief Technical Advisor (CTA);
 National Development Trade Policy Forum (NDTPF);
 Regional Negotiation Forum (RNF);
 Regional Preparatory Task Force (RPTF);
 Committee of Ambassadors ;
 Council of Ministers - for political direction, decisions & guidance;
 All the above are supported by the EU;
European Union’s negotiating structures;
 The European Commission
• Director General – Trade
• Director General - Development
ESA / SADC EPAs Negotiating structures (Contd.)
ESA / SADC EPAs Negotiating structures (Contd.)
Context & State of Play in the EPAs process
Configurations’ challenges include:
 Lack of deep & wide consultations with all stakeholders (producers,
exporters, fisher-folk, consumers, farmers, etc.);
 Difficulties in accessing promised development resources to redress
supply-side constraints;
 Minimal (or lack of) sharing positions, interests, issues or offers at between
negotiators and other stakeholders including MPs;
 Lack of public support for the EPAs which makes the ACP politicians
vulnerable should they go ahead to sign it in its current form (according to
the SADC EPA Brussels Ambassadors’ Report);
 No comparison of positions & offers between SADC EPA, COMESA & the
EAC Groups;
 Division within groups as some countries signed Interim EPAs while others
opted out (see table below);
Context & State of Play in the EPAs process (Contd.)
EPAs Signatories
EPA
Signatory states in
December 2007
(LDCs in red)
Countries which did not sign but
falling into EBA/standard GSP
Proportion
of signatory
countries
Number of
liberalisation
schedules
ESA
Comoros
Madagascar
Mauritius
Seychelles
Zimbabwe
Djibouti
Eritrea
Ethiopia
Sudan
Malawi
Zambia
45%
5
EAC
Burundi
Kenya
Rwanda
Uganda
Tanzania
—
100%
1
SADC
Botswana
Lesotho
Mozambique
Namibia
Swaziland
Angola
South Africa
71%
2
CEMAC
Cameroon
Chad
Cent. African
Rep.
Congo
DR Congo
12.5%
1
Eq. Guinea
Gabon
S.
Tomé/Principe
Context & State of Play in the EPAs process (Contd.)
• IEPAs have:
– produced separate tariff-elimination commitments or
schedules;
– produced different tariff-elimination schedules from
the SADC Free-Trade Area, a development that has
the potential to undermine the regional trade &
integration agenda;
– generated tensions within the SADC-EPA group;
– generated direct negative implications to SACU;
Current Status
»EAC-EC Experts met on 15–17 November 2011 & discussed:
˃ Rules of Origin;
˃ Economic and Development Cooperation;
˃ Agriculture;
˃ Parties agreed that Trade in Services and Trade Related Issues
would be negotiated at a later stage. However, the EC
proposed that Trade, Environment and Sustainable
Development be considered as this is a requirement by the EU
Parliament in all agreements concluded by the Commission;
• EAC Secretariat organised meetings for Member States with COMESA Chief
Technical Advisor (Nairobi); & SADC Secretariat officials (Burundi) to
compare areas of convergences & divergences in the rules of origin text;
» On 12-15 December 2011, the Joint Technical & Senior Officials met in
Brussels, Belgium & considered the following:
+ Economic and Development Cooperation;
+ Rules of Origin;
+ Agriculture;
+ Dispute Settlement and Institutional Arrangements;
+ Trade, Environment and Sustainable Development;
+ Roadmap to finalize the Comprehensive EPA negotiations;
+ New issues that were submitted by Mid-November 2011;
» According to SADC EPA Brussels based Ambassadors’ Report, EC has
intensified contact with this region on:
+ Development Cooperation;
+ Agriculture;
+ Rules of Origin;
ESA Current Status
New Momentum & Progress at the Joint EU-ESA technical negotiating
session held in Mauritius in November 2011:
 On trade in goods: Parties reached agreement on all provisions on SPS;
TBT trade facilitation; capital movements; general & specific security
provisions; and previous contentious provisions regarding most
favoured treatment (MFN);
 On the text on services: Parties reached agreement on Articles on
principles (including on variable geometry), market access; other
agreements; sections on tourism & travel; postal, maritime and
computer services; & chapter on capital movement. On most
definitions, EU to clarify footnote & definition of enhanced mode 4;
 On trade related issues: Parties reached agreement on all provisions on
competition policy; on working on those aspect relating to technical
cooperation & capacity building; and on working on the basis of a joint
text on sustainable development;
 On texts on agriculture and development, agreement delayed by few
issues;
Outstanding & contentious issues by cluster include:
 With respect to development cooperation, two key issues are:
 Additional resources; and
 linking trade liberalisation to development benchmarks;
 With respect to trade in goods issues include:
 provisions on substantial all trade liberalisation;
 timeframes for liberalisation;
 treatment of export taxes;
 agricultural safeguards;
 On export taxes, technical teams are considering language that allow
consultative process BUT without limiting the policy space of ESA
countries to impose export taxes;
 On agriculture: Parties reached agreement to refer the issue of export
subsidies to the political level (Council of Ministers);
 On Agricultural safeguards, since agricultural export subsidies are being
discussed under WTO, ESA position is that the issue should be left for
political tradeoffs at an appropriate time;
 On rules of origin cumulation provisions,
 EU submitted proposal on cumulation on materials which are MFN 0%;
diagonal and full cumulation with other EPA signatories and OCTs;
cumulation with GSP zero and quota free materials; & extended
cumulation with industrial materials which are duty free quota free under
EU FTAs;
 ESA welcomed the proposal, but would like to preserve cumulation with
ACP states; reduce the list of products excluded from cumulation with
South Africa; & cumulate with neighboring countries including Egypt
which is in COMESA FTA;
 On trade in services
 EC to revert with new positions or proposals on Articles on MFN & MFN
exceptions; new financial services; anti-competitive practices & safeguard
measures;
 ESA to respond to EU’s proposals on telecommunications & e-commerce;
 On trade related issues, ESA agreed to prioritise competition policy &
sustainable intellectual property rights ahead of public procurement & good
governance on tax matters;
Implementation of interim EPA
 Madagascar, Mauritius, Seychelles & Zimbabwe that signed interim EPA
have now ratified it, & soon will come into effect after Zimbabwe
deposited the ratification instruments;
 interim EPA covers 5 main subjects: trade in goods; fisheries;
development cooperation; dispute settlement; and final provisions;
 Focus is on supporting the countries to implement the commitments
including:
 undertaking needs assessment on legal framework &
administrative/human resource requirements;
 domesticating IEPA in national laws including the customs book;
 assistance towards establishing a “national EPA Implementation Unit”;
 Pursuing accompanying measures to finance EPA-related adjustment
costs including capacity building, modernization & re-structuring of
industries affected by trade liberalization; and
 awareness programme to inform all stakeholders (civil society & the
business community) on the rights, obligations & opportunities
contained in the interim EPA;
SADC EPA Current Status
New Momentum & Progress at the Joint EU-SADC EPA Senior Officials negotiating session
held in Pretoria, South Africa on 23-30 May 2012:
 Market Access with EU coverers three regimes:
• SACU, Angola, & Mozambique;
 EC’s draft text proposal provides for bilateral and diagonal cumulation. SADC EPA
Member States are required to put in place Administrative Cooperation arrangements
that allow cumulation with one another; & other ACP States, OCTs and other preferential
partners of EU before cumulation can enter into force [Negotiations on Administrative
Cooperation continue];
 EC’s compiled a list of products to be excluded from cumulation within the SADC EPA
Member States’ respective territories that largely contains products with South African
origin which do not enjoy duty-free quota-free access into the EU market; Similarly, the
SACU region has compiled a list of products to be excluded from cumulation; [The two
parties are yet to decide on the principle and approach on this issue].
 On Rules of Origin for fisheries relating to Exclusive Economic Zones, Right of First Refusal
& derogation for tuna, SADC EPA States forwarded a proposal to the EC; [Discussions are
continuing]
 On Agriculture & Non-Agricultural Market Access (NAMA), EC submitted a list of request
& offer for the SACU market in May 2011. SACU submitted its counter-offer, which was
considered in the SADC EPA Senior Officials meeting of November 2011. [Parties could
not reach agreement on the offer, hence negotiations on NAMA & Agriculture will
continue in the next round].
SADC EPA Current Status (Contd.)
Unresolved Issues
Outstanding Issues
Action
Art. 22: Standstill
SADC EPA to propose the language
Art. 23 ter: Infant Industry SADC EPA to react to EC proposal
Art. 24: Export taxes
For discussion in the next Joint meeting
Art. 28: MFN
EU to consult on the principle point raised by
SADC EPA
Art. 29: Special Provisions EC to propose language that addresses SADC
on Administrative
EPA’s concerns of unilateral action or
Cooperation
approaches;
Art. 34: Bilateral
Safeguard Measures
EU to consult given SADC EPA’s proposal on
“MFN rate as applied at the time the measure is
taken” instead of “MFN rate applicable at the
time of entry into force”
Annex 6: Agricultural
safeguard Measures
To be considered within the context of Market
Access negotiations
SADC EPA Current Status (Contd.)
Unresolved Issues (Contd.)
Outstanding Issues
Action
Art. 114: Rights and Obligations
under this Agreement
SADC EPA to react to EC proposal
Art. 34 (5): Agricultural Safeguards
This was noted to have broader
implications to the sector and the
economy [To be considered in the next
joint meeting];
New Generation Issues
o Competition Policy;
o Protection of Intellectual
Property;
o Transparency and NonDiscrimination of Public
Procurement;
o Cooperation in the Tax Area
SADC EPA to react to EC’s texts; &
SADC EPA requested EC to react to its last
year’ submitted texts;
Geographical Indicators
This was noted to be for the ongoing EC South Africa bilateral negotiation;
SADC EPA Current Status (Contd.)
Trade in Services & Investment
EU submitted a new Article on Services & Investment proposal that presupposes that
negotiations on services & investment will not be concluded by the time the full EPA
will be agreed . Therefore, parties agreed to:
• exchange requests & offers not later than 31/12/2013;
• conclude negotiations by 31/12/2015;
• Proposal silent on long-held position by participating SADC EPA States that an
agreement on investment should only extend to cooperation;
• EC want negotiations on regulatory provisions whereas participating SADC EPA
States have been generally open to consider regulatory provisions as part of the
negotiations on specific commitments;
• EC language is not mandatory when it comes to issues of cooperation and special
& differential treatment;
• Participating SADC EPA States questions EU’s motivation to table the services
text when negotiations are underway;
• Parties to consider texts (both services and investment texts) as submitted by
each side and exchange comments by the end of July 2012.
Trade related Issues
EC submitted proposals on Competition Policy; Protection of Intellectual Property;
Transparency & Non-Discrimination on Public Procurement; and Cooperation in
the tax Area. But SADC EPA States argues that EC’s proposal goes beyond
‘cooperation language’, link development cooperation provision to some
obligations; and ignores the group’s comments on cooperation texts.
Programme of activities for the EPA negotiations
Date
Activity
Responsible
Submission of 1st Draft
End of June
EC
Consolidated Text
18-19 July
Joint TWG Market
Access
End of July
Exchange of
comments on
Unresolved Issues
Joint TWG Market
Access (Rules of
Beginning of
Origin)
September
Joint TWG Services
First week
of October
Joint Senior Officials
EC to send
data by 22
June
Issue(s)
Venue
-
-
Agriculture & NAMA
Everything
EC & SADC
EPA
Consolidation of
Texts
All outstanding
Market Access
issues; Unresolved
Issues; Services &
Trade related Issues
SADC EPA
Region
Introduction
 Members of European Parliament in the International Trade Committee voted
in favour of EC’s proposal to update the Generalized System of Preferences
scheme by removing preferences for EU imports from countries on World
Bank’s high or upper middle per capita income list. Subsequently, EU issued a
notice to withdraw market access regulation 1528/2007, an instrument
adopted by EU on 30/9/2007 to extend duty free quota free market access to
ACP countries that either signed or initialed the interim EPA;
Implications of the regulation repeal
 ACP countries including ESA & SADC EPA that have not ratified or notified
provisional application of their interim EPA by 1 Januray 2011 will no longer
benefit from this regime;
 Main casualties in SADC region are some SADC EPA Member States:
˃ Botswana & Namibia, which are classified as upper middle-income, no
longer qualify for EU market access under the new GSP provisions & have
no longer have any recourse when implemented;
˃ Swaziland though is eligible to benefit from the GSP scheme, will see her
sugar, the main export commodity, facing higher tariffs when entering the
EU market;
 ESA non-LDCs (Mauritius, Seychelles & Zimbabwe) have already either ratified
or notified provisional application of the interim EPA (no effect is expected);
 LDCs can still access EU market under similar regime – EBA (impact of the
withdrawal is next to zero);
Lobbying work by SADC EPA Ambassadors based in Brussels:
 Led by Namibia as the current chair of the ACP Southern African region &
Botswana as the current coordinator of the SADC EPA Group, they:
˃ held meetings with the European Parliament in Brussels to review the
proposed amendment to the EC Market Access Regulation 1528/2007;
˃ held meetings with some Members of the European Parliament (MEP)
Committee on International Trade on the same regulation;
˃ Adopted a multifaceted lobbying process by engaging:
+ MEPs during the Joint Parliamentary Assembly in Denmark;
+ EU Ministers & Council during the Joint ACP-EU Council meeting in
Vanuatu;
+ encourage SADC EPA Ambassadors based in EU Member States
Capitals to be involved;
Lobbying strategy to target:
 European Council, which will final vote around September 2012;
 EU Ambassadors based in the SADC EPA Capitals;
 European MPs, President of the European Parliament, Chairperson of the
European Parliament;
 7th Summit of ACP Heads of State and Government, in Malabo, Equatorial
Guinea, 10-14 December 2012;
Lobbying message: (i) mutually beneficial agreement; & (ii) extend negotiations
conclusion to 1 January 2016;
What should MPs do?
Strategically link with:
 national & regional negotiators,
 national & regional institutions working on this area;
 development partners working on this area;
Monitor:
 how negotiators summarise national interests, positions & offers before or
after each major EPA group meeting to the nation;
 how negotiators share information on EPA processes & outcomes with
key constituencies & citizens;
 harmonisation of liberalisation schedules with other regional
commitments;
 the implications of EPA processes & outcomes to regional trade &
integration agenda;
Advocate for:
 support to institutions that develop knowledge, skills & capacities to
simultaneous deal with bilateral & multilateral trade negotiations;
 the building of multi-stakeholders’ synergies, coalitions & partnerships
with a view to ensure fair publicity & scrutiny of the process & outcomes;
Conclusion
Engage on the implications of EPAs to regional integration since;
 most LDCs have opted to stay out of the EPA process;
 signed EPAs have turned out to be bilateral arrangements with
individual Member States;
 In ESA region, there are four signed different schedules of trade
liberalization commitments;
 Mozambique liberalisation schedule differ with that of SACU;
 EC has issued a notice to withdraw Market Access
Regulation 1528/2007;
Support lobbying efforts by SADC EPA Ambassadors based in
Brussels on above regulation;
Thank you