Transcript EAST AFRICAN COMMUNITY CUSTOMS UNION

STATE OF PLAY OF THE EAC-EU
EPA NEGOTIATIONS
Presented by:
Marie Angelique Umulisa – EAC Secretariat
AU COORDINATION MEETING ON THE EPA NEGOTIATIONS
17 – 18 MAY 2012, ARUSHA – TANZANIA
EAC-EU EPA Overview
• FEPA initialed in November 2007
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Trade in Goods
Fisheries
Development Clause
Rendezvous clause
• FEPA not signed in June 2010 because of
contentious issues (MFN clause, Export Taxes and
Development)
• Negotiations ongoing towards the conclusion of a
comprehensive EPA
COVERAGE OF THE EAC-EU EPA
Agreed Scope:
 General Provisions
 Trade Regime for Goods:
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Free Circulation of Goods
Non-Tariff Measures
Customs and Trade Facilitation
Sanitary and Phytosanitary Measures
Standards, Technical Regulations and Conformity
Assessment
Trade Defence Measures
 Fisheries
 Agriculture
Cont’d… COVERAGE
 Economic and Development Cooperation
 Dispute Avoidance and Settlement, Institutional
Arrangements, General and Final Provisions
 Annex I: Customs duties on products originating
from the EAC Partner States
 Annex II: Customs duties on products originating
in the EU Party
Annexes II(a), II(b), II(c) and II(d)
 Protocol and Annexes on Rules of Origin
Cont’d… COVERAGE
 Areas for future negotiations (TIS + TRI)
New issues introduced by EU but not agreed as
part of the scope:
▫ Governance in the Tax Area
▫ Obligations/Consequences from Customs
Union Agreements concluded with EU
STATUS ON THE NEGOTIATIONS
• Standstill Clause:
(Right to review tariffs for products scheduled for
progressive liberalization in the interest of regional
integration) – additional paragraph as follows:
“In order to preserve the prospect for the wider
African regional integration processes, the Parties
may decide in the EAC EC EPA Council to modify
the level of customs duties stipulated in Annexes
II(a), II(b) and II(c), which may be applied to a
product originating in the EC Party upon its
importation into the EAC Partner States. The Parties
shall ensure that any such modification does not
result in an incompatibility of this Agreement with
the requirements of Article XXIV of GATT 1994”.
STATUS…
• Article 15 on Export Taxes:
While the FEPA allows EAC to continue to levying
existing export-related taxes, the introduction of new
export-related taxes in order to foster the development
of domestic industry (i.e. value addition) or for foreign
exchange stability has to be authorized by the EPA
Council.
Additional formulation not agreed upon – has been
scaled up to the political level.
Notwithstanding paragraphs 1 and 2, in exceptional circumstances
where an EAC Partner State [EAC: has] [EC: can justify] special
needs with regard to revenue, food security, or environmental
protection, and where the EPA Council is not scheduled to meet
within one month, the EAC Party may impose a temporary duty or a
tax in connection with the exportation of goods after [EAC:
notifying ] [EC: consultations with] the EU Party.
STATUS…
• Article 16 – MFN:
• EAC’s current offer to the EU:
Proposes to insert a paragraph after Art. 16(2) to
require and/or place the onus on the EU Party
to demonstrate that it has been given less
favourable treatment than that offered by the
EAC Party to any other major trading economy
and that the Parties to enter into consultations
on how best to implement the provisions of
paragraph 2 on a case by case basis.
• EU has proposed the MFN text agreed with ESA
in Nov. 2011
STATUS…
Trade Facilitation aspects of the EPA – to
discipline NTBs that take away advantages of
preferential Market Access.
▫ Negotiations finalized on the Titles
on
Customs and Trade Facilitation; SPS; and
TBT.
STATUS…
• Trade Defence Measures under the EAC-EU EPA
Amendments:
▫ Anti Dumping and Countervailing Measures
 WTO’s Dispute Settlement rules to apply.
▫ Multilateral Safeguards
 WTO rules to apply to provisions of para 1.
▫ Bilateral Safeguards
 Period can be extended by EPA Council for
maximum 5 years.
Economic & Development Cooperation
(i) Support regional integration and development
strategies.
(ii) Based on Economic and Development
Cooperation Chapter and EAC EPA
Development Matrix.
(iii)Cooperation to be measured against
development baseline benchmarks, indicators
and targets.
(iv)Monitoring framework to be jointly developed
and agreed by both Parties.
(v) Cooperation shall be in the form of Financial
and non financial support to the EAC region.
E&DC…
 the Parties commit to jointly and individually
mobilise resources
▫ The EAC Party shall:
 Commit resources from its financing mechanisms on
a timely and predictable basis to support regional
integration and the EPA related development
strategies and projects as contained in the EAC EPA
Development Matrix.
 Develop their development strategies with due
regard for the right of the EAC Partner States to
determine the direction and the sequence of their
development strategies and priorities.
 Establish an EPA fund to channel EPA related
resources.
E&DC…
▫ The EU Party shall commit the following resources
on a timely and predictable basis:
 The European Development Fund (facilities- national and
regional)
 EU Budget
 Any other instrument that will be used to implement
EU’s Official Development Assistance.
▫ Both Parties shall jointly commit to work towards
mobilizing the following resources:
 funds of other donors (multilateral donors)
 grants, concessional loans, public-private partnerships,
and specialized facilities
 Any other ODA resources available from development
partners
E&DC…
• The Parties agree that the scope of economic and
development cooperation shall be in the following
areas:
(i) Infrastructure
(ii) Agriculture and livestock
(iii)Private Sector Development
(iv) Fisheries
(v) Water and Environment
(vii) Market Access Issues (SPS, TBT, C&TF)
(viii) EPA Adjustment Measures
(ix) Mobilization of Resources
E&DC…
• Text largely agreed – 2 brackets remain
on the core issues:
▫ Annexing of the EAC EPA Development Matrix
(EAC: to annex; EU: separate document)
▫ When to develop the benchmarks, indicators and
targets (EAC: before signature; EU: after entry
into force of the EPA)
 Draft MONITORING Framework developed by
the EAC - on the first mover advantage.
EAC EPA Development Matrix
• Format agreed upon (project, geographical
coverage, estimated costs, contribution by the EU
+MS, other donors and funding gaps)
• Includes prioritized projects and programs in the
following areas:
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Infrastructure (Transport)
ICT & Telecommunication
Capacity building
Energy
Agriculture and trade facilitation
Water, Environment and Climate change
Lake Victoria development
• Matrix to be reviewed every 5 years
AGRICULTURE
3 Outstanding Issues remain:
1) Export Subsidies
2) Domestic support - Substantially reduce trade
distorting domestic support provided to
farmers, especially on products of export
interest to EAC region.
▫ EU’s argument - "Domestic support" can only be
addressed in the multilateral framework, and is
under discussion in the DDA and hence should
not be addressed in any event in the context of
current bilateral negotiations
AGRICULTURE
EU have proposed a text on Transparency on
domestic support.
▫EU making the discussions on the Agriculture
text conditional upon not discussing domestic
support
3) Geographical Indications – cooperation on
Capacity Building – EAC still consulting
RULES OF ORIGIN
• The EAC-EU EPA Rules of Origin are contained in Protocol
No. 1 with all its annexes, which include Annex II that spells
out specific rules to apply for products manufactured using
non originating raw material.
• The ongoing negotiations of the EAC-EC EPA Rules of Origin
are guided by the following objectives:
▫ Improving and increasing the market access for EAC exports into
the EU market
▫ Promoting the establishment and growth of the industrial and
agricultural base of EAC Partner States
▫ Facilitating the diversification of the EAC export base
▫ Deepening EAC regional integration through cumulation across
EAC as well with COMESA and SADC countries
▫ Widen EAC Partner States base for sourcing raw material for
production of goods targeting the EU market by allowing for
extended cumulation that covers all ACP countries, countries that
the EU has concluded an FTA with and cumulation with goods
that enter the EU market at an MFN duty rate of 0%
RoO…
• The corner stone of the EPA Rules of Origin is
the principle of asymmetry that reflects the
differential level of development between the
EAC and the EU.
• EAC has held consultations with ESA and SADC
to try and harmonize to the extent possible
positions on the EPA RoO negotiations.
INSTITUTIONAL ARRANGEMENTS,
DISPUTE SETTLEMENT & FINAL
PROVISIONS
• Negotiations ongoing on the text.
• Key divergent issues:
▫ Scope of Dispute Settlement: EAC does not agree
with the proposal by EU to not include disputes
pertaining to financing for development cooperation under the EPA i.e. to be held under
Article 98 of the Cotonou Agreement.
▫ Article on Relations with the Cotonou Agreement
– cross-referencing on Human rights, democracy
principles, rule of law, anti-corruption...
TRADE IN SERVICES
RELATED ISSUES
&
TRADE
• Trade in Services
• Trade Related Issues:
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Competition Policy
Investment and Private Sector Development
Intellectual Property Rights
Transparency in Public Procurement
Both Parties agreed to negotiate the above issues at a
later stage – included in the Rendez-vous clause
Cont’d … Trade Related Issues
• Trade, Environment and Sustainable
Development:
▫ Disagreement on whether to include this in the
Rendez-vous clause. EAC’s position is that this
should be negotiated at a later stage along with
the other Trade Related Issues.
New Issues Presented by EU
1) Good Governance in Tax Area
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To address tax fraud, evasion and avoidance;
Principles: Transparency, effective exchange of
information, and Fair tax competition
2) Obligations arising from Customs Union
Agreements concluded with the EU.
THESE ISSUES NOT AGREED UPON FOR
NEGOTIATIONS
Conclusion
• Remaining task – TO ENSURE A QUALITY EPA
for the EAC
• Negotiations are still progressing in this regard.
• need to sign an EPA as EAC
Thank you for your
attention
[email protected]