… As EU Insists on WTO-Compatible Agreements
By Emma Kakololo
WINDHOEK
The European Union (EU) has recognised the impossibility of concluding
Economic Partnership Agreements (EPAs) by the end of this year.
The EU has, however, warned that if any region is unwil-ling or unable to complete an EPA or stepping stone World Trade Organisation (WTO)-compatible agreements in the time available, it will not be able to grant its EPA offer of free access to its market for the countries involved.
Inconclusive trade negotiations would lead to the expiry of the World Trade Organisation (WTO) waiver, which allowed trade between the African, Caribbean and Pacific States (ACP) and the EU to continue under the preferential terms of the Cotonou Agreement.
Both parties are expected to finalise EPAs as from January next year. However, trade experts from 16 African countries, who met their EU counterpart recently in Madagascar expressed reservations about being able meet the December deadline.
“A point I want to make, in the light of this progress, is that some regions will need a little more time to complete full EPAs,” said Peter Mandelson, European Commissioner responsible for the EU’s external trade last week.
Mandelson said WTO-compatible agreements for all regions were crucial to avoid disrupting ACP exports from 1 January.
“Where a full EPA is not yet complete, we have to capture those issues negotiated so far in an agreement with a goods market access arrangement at its core and then move on to finalise negotiations in other areas in the early part of 2008.
“This will enable us to avoid trade disruption without compromising our objective of negotiating comprehensive EPAs with a full development package,” he told the Committee on International Trade (INTA).
He added: “We will not be able to grant our EPA offer of free access to the EU market for the countries involved. These countries will be eligible, instead, for our Generalised System
of Preferences. This is the fall back position for those ACP countries – non-LDCs – which are not eligible for Everything But Arms treatment.”
The possibility of not concluding the EPA negotiations by the end of year deadline is of significant concern to Namibia, Botswana and Swaziland – the states in the SADC EPA group not categorised as Least Developed Countries (LDCs).
The non-LDC categorisation excludes them from access to European markets as part of the “Everything But Arms” initiative. This means they are expected to enter into new contractual reciprocal free trade agreements in the form of EPAs to be compatible with WTO rules.
“We will propose a Council regulation allowing us to implement the new trade regime from January 1 for those who qualify. This should be launched in November and adopted in December.”
According to Mandelson, the full trade agreements have a WTO-compatible goods agreement at their core, but also cover other issues (such as services and investment and trade-related areas such as trade facilitation, intellectual property and cooperation on competition policy) in order to maximise their development potential.
“Even reaching agreement with a goods market access core brings challenges.
We need WTO-compatible market access offers from the ACP side. Proposals to liberalise, for example, 60 percent of imports over a 25-year period, will get us nowhere at the WTO. This is not a classical negotiation with the EU seeking market access. It is in effect a negotiation with other developing countries and the rest of the WTO to get an ACP agreement that will survive scrutiny in the WTO.”
He encouraged ACP trade partners not to see this as a negotiation in which they need concessions from the EU for each percentage point of liberalisation.
“There are flexibilities in WTO rules we can use to protect sensitive ACP products. But I am becoming very concerned that our ACP partners are taking these market access negotiations to the edge.”
He reiterated: “As I have said to these partners, early November is the effective deadline for putting new market access arrangements through our system in time for 1 January. If we have WTO-compatible offers in the next 2-3 weeks, I am optimistic we and the Member States can put the new regime in place in time, although we will be stretching our procedures to their limits.
After that, we will do everything we can, but cannot guarantee any country improved market access from 1 January.”
South Africa is one of the countries that have been resolutely opposed to the inclusion of the new generation issues, which include liberalisation of the services sector, investments, competition policy and intellectual property rights.
The country argues that EPAs do not have to include these issues to be compatible with WTO rules.