AU Warns Members on EPAs

Francis Ayieko (East African)—Barely three months to the conclusion of the Economic Partnership Agreements between African, Caribbean and Pacific (ACP) countries and the European Union, the African Union is cautioning member states against signing the trade deal if it undermines development on the continent.

In a report prepared by the Department of Trade and Industry in collaboration with the Economic Commission for Africa, the AU has challenged African leaders and negotiators to examine the proposed EPAs and ensure that only those that “effectively” support the socio-economic development of Africa are concluded.

The development aspect of the agreements, the AU asserts, must be in line with the Millennium Development Goals.

“The African leadership and negotiators should ensure that odious agreements are not concluded with third countries or partners, that would be detrimental to the development prospects of Africa,” says the report, dated August 30.

The report will be presented to the meeting of senior officials of regional negotiating forums to be held in Cotonou, Benin, next month to determine the position of the Eastern and Southern Africa (ESA) negotiating bloc vis-a-vis that of the European Union.

The negotiations are between the EU and 77 ACP countries and are expected to replace the Cotonou Agreement by January 1, 2008.

The AU report accuses the European Commission negotiators of giving priority to a narrow and inaccurate meaning of development. It says that the commission sees development only as the liberalisation of trade and adoption of non-discrimination rules on Singapore issues of investment, competition and procurement.

The EC negotiators, according to the report, have also given a narrow interpretation of regional integration, limiting it to adoption of common external tariffs on the basis of which to stage reductions of Customs duties on imports from the EU.

According to the AU, the EC negotiators have failed to appreciate the socio-economic and political philosophy that drive regional integration processes in Africa.

The report also takes issue with what it describes as the EU’s reluctance to fund African negotiating blocs adequately. It says that the amounts committed under the 10th European Development Fund and the Aid for Trade Package of the EU will not be adequate to meet the EPA-related implementation and financial adjustment needs of any of the groups.

In their negotiating positions, the African negotiating groups have always indicated their need for adequate resources, simple procedures for accessing funds, preservation of policy space, infrastructure, consolidation of regional markets, elimination of trade barriers including non-tariff barriers, technology partnerships and co-operation.

The report recommends that EPAs provide for adequate resources committed to cover the implementation and adjustment needs of the continent as well as binding undertakings from the EC in the EPAs text, to provide financial resources to meet the gaps in the implementation of the development matrices.

It further recommends that EPAs must provide for the formulation of Rules of Origin on products exported to Africa as well as use of regional funds as “delivery mechanisms.”

“Without these provisions, EPAs will not be aligned to their original spirit as development tools. Negotiations should therefore continue,” the report says, stressing that each EPA should have a chapter on development, showing specific developmental targets and indicators and clear roles for the parties.

In what has widely come to be known as the Nairobi Declaration on EPAs, Africa’s trade ministers last year set out the continent’s broad understanding of development and castigated the EC for failing to address the development concerns of Africa.

The ministers, meeting in Nairobi, emphasised that the development content of the negotiations should include adequate financial and technical resources, full market access to the European markets for African goods and service providers, and policy space and flexibility for implementation of development programmes in Africa.

The report calls on the African leaders to raise the priorities of Africa with the political leadership of Europe, clearly stating Africa’s preconditions for concluding EPAs.

Africa needs to make it clear to the European side whether in its assessment more time is required, so that negotiations continue beyond December 2007, for the conclusion of EPAs that satisfactorily address its priorities,” it says.

According to a review report jointly prepared by the ACP, the African Union Commission and the Economic Commission for Africa early this year, the main sticking points in the negotiations are market access and agriculture.

There are also differences on the approach to ratification and entry into force of the EPAs to ensure that trade is not disrupted after December 31, 2007, with the main issue being whether there could be provisional application of the EPAs and whether EPAs should only enter into force after ratification by all member states.

Another related concern is the situation of countries for which EPAs will not be in force or will not be applicable.

The main issue here is whether the current trading Cotonou Agreement for such countries could be extended beyond December 2007.

On trade-related issues, the major area of difference is the treatment of the investment, competition and government procurement (whether or not there should be rules in these areas). There are also differences on the treatment of intellectual property rights and private sector standards.

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