PRIVATE SECTOR VIEWS ON EPA NEGOTIATIONS
Presentation
to
EPA Negotiations Coordination Meeting
17-18 May 2012
Prepared by
EABC
Presentation Outline:
1.
2.
3.
4.
5.
State of Play of EAC-EU EPA Negotiations
and Private Sector Views
State of Play of ESA-EU EPA Negotiations
and private Sector views
State of Play on the ECOWAS and Private
Sector views
Overall views of private sector
Conclusions
1. Background to EPAs (cont)

The Seven regional configurations formed by ACP were as follow:
 the Economic Community of West African States(ECOWAS)
 the Economic Community of Central African States(ECCAS)
 the Southern African Development Community(SADC)
 the Eastern and Southern Africa (ESA)
 the Caribbean Community + Dominican Republic
(CARIFORUM)
 the Pacific region.
 the East African Community(EAC)
2. State of Play EAC-EU EPA

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
EAC-EPAs configured in 2007 after EAC Partner States found out
that signing EPA in different configurations has negative impact
on EAC Customs Union. Private sector view is that, whatever
negotiations are negotiated, negotiators should be cautious;
protect; and preserve the so far registered progress and potential
benefits of EAC Customs Union. The guarantee clauses should
clearly be spelt.
Prior to 2007
Tanzania was under SADC-EPA while Kenya,
Uganda, Rwanda and Burundi were under ESA-EPA. Private
sector has urged and continue to urge Partner States to negotiate
as a bloc- EAC.
In Nov 2007 EAC FEPA was initiated to avoid trade disruption as
WTO waiver tending to expiry and negotiations could not be
concluded by 31st Dec 2007 (deadline for the negotiations)
EAC FEPA contained: Trade in Goods;
Development Clause; Rendezvous Clause
Fisheries;
2. State of Play EAC-EU EPA
(cont.….)



FEPA not signed in June 2010 because of contentious
issues such as MFN Clause, Standstill Clause, Export Taxes,
and Development clauses/annexes
Road map towards conclusion of Comprehensive EPA:
 EAC –EC joint agreement is to conclude negotiations
by 31st July 2012 . Private sector views are that
negotiations require sufficient time to consult and
understand more. However negotiations under
pressure requires caution.
Coverage of the EAC EPA
Agreed Scope:
a) Trade in Goods, including Rules of Origin, Fisheries,
2. State of Play EAC-EU EPA
(cont.….)
Scope:
b) Customs & trade facilitation; Technical Barriers to Trade
(TBT) and Sanitary & Phytosanitary Measures (SPS)
c) An elaborated dispute settlement mechanism and
institutional arrangements
d) Economic and development
e) Agriculture
New Issues introduced by EU but not Agreed as part of the
scope
 Trade, Environment and sustainable development
 Governance in Tax Areas

2. State of Play EAC-EU EPA (cont.….)
Private sector opinion on contentious issues under EAC-EPA:
A. Standstill Clause (Article 13)
a) The clause proposed by EU suggests, upon entry into force of EPAs to:
i) No introduction of new tariffs
ii) Not raise existing tariffs
iii) Once eliminated, will not be re-introduced
Private Sector view is that our negotiators should stick to principles. The
principle of flexibility of policies is important for our economies and
businesses. This clause freezes out tariff on applied rates to all those products
expected to be liberalised in future, hence making transition to full
liberalisation redundant.
The Private Sector agree with EACs’ suggestion to redraft the clause to allow
flexibility. However EU has shown reluctance to allow for future tariff
modifications. Persist.
State of Play EAC-EU EPA
(cont.….)


B. Duties and Export Taxes (Article 15)
The Private Sector views, in spite of the position by EU, export taxes are
development tool to encourage value added production. In order to take
necessary measures for the future development, private sector views are
thus in support of EAC’s position not to allow the clause suggesting
elimination of export taxes and quantitative restrictions (imports and
exports)…hopefully this is ACP position.EAC is in the position that the
Article should be formulated in such way that it allows EAC Partner
States to impose taxes for industrialization purposes.
C. Most Favored Nation (MFN) Clause (Article 16)
About the EU proposed inclusion of an MFN clause, (requiring EAC to
extend to the EU any more favorable treatment that it may give in the
future to major trade partners)
State of Play EAC-EU EPA
(cont.….)

Private Sector position supports EAC Partner States, with the
opinion that the MFN clause should be removed at best or
reformulated at worst so as to allow EAC opportunities to expand
trade with other partners.
Economic & Development Cooperation Article 36
The EAC & EU had agreed on the substance of the whole text with
the exception of two brackets under the “General Provisions”
namely: (1.) The EAC EPA Development Matrix should be
annexed to the EPA Agreement (EAC Party position). Private
Sector is in full support of this position-only hop it can be ACP
position

State of Play EAC-EU EPA
(cont.….)
(2) The benchmarks, indicators and targets should be developed
after the signature of the Agreement (EAC Party position). The
benchmarks, indicators and targets should be developed after the
entry into force of the Agreement (the EU Party position) The Private
Sector believes and support the view that benchmarks/indicators and
targets should be developed upon signature of the agreement in
order to facilitate timely evaluations
 Agriculture
The two parties have agreed on the Joint Agriculture Text. Only two
issues waiting EAC responses from EU’s revised text:
(1) Domestic Support and Export Subsidies
(2) Geographical Indications
(3) Institutional Arrangements, Dispute Settlement and Final Provisions
Private sector views are that the EAC, committed as it is to the
negotiations, need to continue with negotiations.

State of Play EAC-EU EPA
(cont.….)
Trade and Sustainable Development (TSD)
EU had proposed chapter on Trade & Sustainable Development
highlighting the key areas with specific focus on the substance to
be covered on environment and labor -including scope of
cooperation and institutional arrangements.

Good Governance in the Tax Area
The EU had already proposed text on Good Governance in Tax Area
and EAC is undertaking consultations on the text. Private sector
community in EAC will provide their views/inputs in due course.

State of Play on the ESA-EU EPA
This is a diverse EPA group that includes:
 Indian Ocean islands (Comoros, Madagascar, Mauritius
and Seychelles),
 Horn of Africa (Djibouti, Ethiopia, Eritrea and Sudan) \
 land-locked countries of Southern Africa (Malawi, Zambia
and Zimbabwe).
 At the end of 2007, 6 ESA States (Comoros, Madagascar,
Mauritius, Seychelles, Zambia and Zimbabwe) concluded
an interim EPA with the EU.
 The agreement was signed/ initialled on a bilateral basis
by four countries (Madagascar, Mauritius, Seychelles and
Zimbabwe) in August 2009 in Mauritius.
State of Play on the ESA-EU
EPA
The main areas under negotiations within ESA-EU are:
development co-operation; market access in trade in goods,
services, agriculture, fisheries; trade-related issues; dispute
avoidance and settlement; and institutional and final provisions.
So far ESA and EU have agreed in following areas:
 Trade in Goods; all provisions on SPS, TBT trade facilitation,
capital movements, and general and specific security provisions
were agreed. MFN clause also agreed.
 Services; Articles on principles (including on variable geometry),
market access, other agreements, sections on tourism and
travel, postal, maritime and computer services and chapter on
capital movement were fully agreed, as well as most definitions
(except the EU clarifying footnote and definition of enhanced
mode 4).

State of Play on the ESA-EU EPA
a)
Agreement in sectoral sections; was reached with the exception
of development support related provisions to be discussed
together with development cooperation chapter.
b) Trade related issues; all provisions on competition policy were
agreed except those relating to technical cooperation and
capacity building, while on sustainable development, the Parties
agreed to work on the basis of a joint text. Texts on agriculture
and development are almost agreed except on a few issues.
c) Implementation Status: In regarding with the implementation of the
Interim EPA ESA configurations has done following : All four
countries (Madagascar, Mauritius, Seychelles and Zimbabwe) that
signed the interim EPA have now ratified it. It will soon come into
effect after the deposition of ratification instruments by
Zimbabwe, which ratified it last.
State of Play on ESA-EPA / Private sector
views (SADC/COMESA)
a) EU’s demand that LDCs like non-LDCs open up 80% of their trade
over 15years - Private sector/ASSCI suggests that due to supply
side constrains there is need for more time, beyond 15 years to
liberalise and to ring fence more sectors.
b) Implementation of the EPAs; Private sector suggests that resources
for the implementation be negotiated as will entail substantial
restructuring and engender adjustment costs
c) EC demand to veto export tax policy by ESA states; Private sector
suggests that since export taxes are essential for
enhancing value addition and industrialization and ESA
countries are primarily exporters of raw materials – be
excluded from the negotiations - policy space is needed by
ESA states to address supply side issues as they are primarily
exporters of raw materials;
Private sector views on ESA-EPA
d) Issues of MFN and special safeguards for agriculture; The Private sector is
of the view that effects of EU export subsidies be included on the
negotiation agenda;
e) For each alternative position or options there is need to clearly outline
and quantify the costs to each member country individually and then
collectively as a region
f) Flexibility, based on quantified options will allow ESA to move collectively
together so that we do not end up having other countries put against the
wall
g) Instead of pushing the contentious issues to the political level, technica
experts need to exercise their minds and suggest viable options to
Ministers in order to resolve the impasse
h) The EPA should be concluded on the basis of what is mutually agreeable.
i) There is need to capacitate relevant ESA government authorities on trade
defence instruments and dispute settlement
State of Play on ECOWAS: Private
Sector views
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1. The cohesion of the ECOWAS region as a negotiation
block is threatened by the continuous pressure put on the
non-LCD countries, principally Ghana, Nigeria and Cote
d’Ivoire to sign on the EPAs individually.
2. The programme for upgrading the productive capacities
of the West African companies should be run in all the 15
countries.
3. The ECOWAS private sector would like to see an
agreement on the proposed EPA for Development
Programme (EPADP) before the completion of the
negotiations
Way forward-Overall
views/suggestions of Private Sector
1. Private Sector views are that; African configurations should
develop a common understanding and approach on EPA
issues such as TBT, SPS, Rules of Origin, as well as the
contentions issues such as MFN Clause, Stand still Clause,
Export taxes.
2. African configurations should lobby to EU to postpone the
withdraw of market access regulation 1528/07 the
instrument adopted by EU on 30 Sept 2007 to extend duty
free quota free market access to ACP countries that either
signed or initialled the interim EPA. There is need to retain the
regulation until all configurations conclude full EPA without
pressure.
3. EAC as Customs Union should continue to negotiate and sign
full EPA as group – but also aim to negotiate with other
trading partners on favourable terms ie ASIA, Africa Regional
Blocs
4. To make EPA a development tool, African configurations
should strive to have agreement which address their supply side
constraints by making sure EU is committed to provide new or
additional resources to implement EPA. This can be made
through annexing development matrix to the EPA agreement
and development of the benchmarks, indicators and targets
should be done after the signature of the EPA agreement.
5. African configurations should aim at having Rules of Origin
which favor all-ACP cummulation and take into account; the
difference in the levels of development between the ACP and
EU Member States, food security, poverty alleviation and
industrialization.
6. More involvement of Non Actors especially Private Sector in
the negotiations as it is key implementer of the agreement
Conclusion
A.
Given the importance of trade, and its trading relation with EU,
African countries should ensure to have a quality EPA but not at
the expense of enhanced intra African trade.
B.
The world trade pattern is also shifting, more economies are
progressively and competitively trading more with Africa. And
Africa is progressively trading more within. Negotiate with other
major trading partners; Intra Africa trade (between RECs) The
EPAs should be cognizant of this new development
C.
Negotiate outside the situation of intimidation; pressure and
threats!
D.
Consult more and more with private sector, the situation and
conditions do regularly change – keep constant ear on the
THANK YOU