Transcript Overseas Development Institute

The interim EPAs – some facts
TIPS Workshop, Pretoria 4-5 March
Dr Mareike Meyn
Overview
1. Which countries are the EPA signatories?
2. What do the liberalisation schedules say?
3. What else had been agreed? (Export duties,
standstill clauses, MFN, SPS/TBT…)
4. Trade defense
5. Infant industry protection
6. The rendez-vous clauses
The interim EPAs - some facts. TIPS workshop March 2008
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1. The EPA signatories
 35 of 77 ACP countries initialled an EPA
 Except CARIFORUM all EPA configurations lost members
 Most non-signatories benefit from EBA except six Pacific and
three African non-LDCs
 Except CARIFORUM ‘interim EPAs’ with ‘sub-regions’ were
initialled
 In Central Africa only Cameroon initialled
 In West Africa two countries initialled separate agreements
 In Southern and Eastern Africa the picture is most complex
 Negotiations continue in 2008. Objective: comprehensive,
regional EPAs
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3
2
1
1. SADC EPA
2. EAC 5
3. ESA EPA
Original EPA configurations and signatory
states in southern and eastern Africa
Members
Signatory states in
a
December 2007
Countries falling
into EBA/Standard
GSP
Proportion Number of
of
liberalissignatory
ation
countries schedules
ESA EPA
Comoros
Djibouti
Eritrea
Ethiopia
Madagascar
Malawi
Mauritius
Seychelles
Sudan
Zambia
Zimbabwe
Comoros
Madagascar
Mauritius
Seychelles
Zimbabwe
Djibouti
Eritrea
Ethiopia
Malawi
Sudan
Zambia
45%
5
EAC EPA
Burundi
Kenya
Rwanda
Tanzania
Uganda
Burundi
Kenya
Rwanda
Tanzania
Uganda
—
100%
1
SADC EPA
Angola
Botswana
Lesotho
Mozambique
Namibia
South Africa
Swaziland
Botswana
Lesotho
Mozambique
Namibia
Swaziland
Angola
71%
2
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2. What do the liberalisation schedules
say? East African Community (EAC)
 Only region where all countries have identical schedule based
on EAC CET
 25 years (2 years moratorium)
 Regional exclusion basket of about 20% of EU import value
 3 tranches; ‘real’ liberalisation only starts in 2015
 Revenue impact will be faced in the middle of the
implementation period (2015-23) and will be significant
 Not all countries have yet applied EAC CET
 Most products will be liberalised in this period
 Consumer/producer effects will be end loaded
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2. What do the liberalisation schedules
say? Eastern and Southern Africa (ESA)
 5 of 15 Countries have established individual liberalisation
schedules in relation to COMESA CET
 COMESA CET has not yet been implemented
 Liberalisation occurs in 15 years (5 years moratorium)
 2008-2013: tariff reduction to meet COMESA three bands tariffs
 Countries never agreed a formal definition that allocated the
items in the nomenclature according to the groups
 Chromium and thallium waste
 Mauritius and Comoros: raw material
 Seychelles: intermediate
 Madagascar and Zimbabwe: final
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2. What do the liberalisation schedules
say? Eastern and Southern Africa (ESA)
 Exclusion basket differs between 2.5 to about 20% of EU import
value among the countries
 Revenue impact will be faced in the first tranche and will be
very different among the countries
 Depends to what extent country’s tariff differs from COMESA CET
 Whether tariffs can be replaced by sales tax
 Consequences for regional integration?
 Review of EPA commitments in light of COMESA CET becomes
impossible
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2. What do the liberalisation schedules
say? Southern African Development
Community (SADC)
 5 of 8 countries established 2 liberalisation schedules
 Liberalisation over 10 years, no moratorium
 Exclusion baskets
 Mozambique: large exclusion basket about 38% of EU
import value (2004-2006)
 BLNS: nobody knows…
• Theory: TDCA exclusion basket plus small number of BLNS
sensitive products should mirror BLNS EPA exclusion basket
• Practice: Impossible to compare TDCA (negative list) with
EPA (positive list)
 BLNS are de facto implementing TDCA
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Summary of liberalisation schedules
SADC
ESA
EAC
Total time of
liberalisation
10 years
15 years
25 years
Liberalisation
start
Exclusion list
2008
2013
2010
x – 37.8%
2.5 – 20.1%
19.7%
Regional
approach
Partly (BLNS)
No
Yes
Review of tariff
concessions for
RI
Yes
Yes
No
(average value of EU
imports 2004-06)
The interim EPAs - some facts. TIPS workshop March 2008 10
3. What else had been agreed?
 Export duties
 no African EPA text foresees their abolition but only that
duties shall not be increased/new duties introduced
 Exemption from this principle for SADC and EAC in
‘exceptional circumstances’ (such as infant industry
protection or to maintain currency stability)
 EAC needs consent of the EU; SADC only needs to consult
 “Standstill clause” (freezing of applied tariffs level)
 Found in all EPA texts except CARIFORUM
 EAC and ESA: agreement not to increase applied customs
duties comprises ‘all trade’
 SADC: only for ‘all products subject to liberalisation’
The interim EPAs - some facts. TIPS workshop March 2008 11
3. What else had been agreed?
 MFN clause (need to extent preferences granted to ‘major
trading economies’ to the EU)
 Can be found in all texts
 But: exemptions for CARIFORUM and PACP (Part I, Art.
16)
2. With respect to the subject matter covered by this Chapter, the
Pacific States shall accord to the EC Party any more favourable
treatment applicable as a result of the Pacific States becoming party to
a free trade agreement with any major trading economy after the
signature of this Agreement.
3. Where a Pacific State or the Pacific States can demonstrate that
they have been offered by a third Party a substantially more favourable
treatment in goods, including rules of origin, than that offered by the EC
Party, the Parties will consult and may jointly decide how best to
implement the provisions of paragraph 2.
 What does this mean in practice?
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3. What else had been agreed?
 Special provision on administrative cooperation
 All texts: Refusal or undue delays of administrative
cooperation can result in the temporary suspension of trade
preferences.
 Non-tariff barriers and subsidies
 All texts: Prohibition of import or export restrictions other
than customs duties and taxes (notwithstanding antidumping/counter-vailing measures and infant industry
provisions).
 Some texts: agricultural export subsidies shall be
abolished; all texts: national subsidies are allowed – value
of provisions?
 Exemptions in case of infant industry protection in some
texts
The interim EPAs - some facts. TIPS workshop March 2008 13
3. What else had been agreed?
 Customs and trade facilitation
 Central element in the EPAs
 SADC: partially regional approach: customs legislation and
procedures shall be harmonised
 Chapter has not yet been drafted in EAC and ESA
 Sanitary and phytosanitary standards/technical
barriers to trade
 Chapter outlines cooperation areas and technical support
 SADC: list of ‘priority products’
• A) increasing understanding of and compliance with EU
standards
• B) products where regional standards shall be harmonised
 Chapters have not yet been drafted in EAC and ESA
The interim EPAs - some facts. TIPS workshop March 2008 14
African ‘priority products’
Priority products for
exports to the EU
Priority products for
regional harmonisation
Additional regional
approach
SADC
Fish and fishery
products, meat and meat
products, fruits and nuts,
vegetables, cut flowers,
coffee, sugar
Fish and fishery products,
meat and meat products,
cereals, vegetables and
spices, oilseeds, coconut,
copra, cotton seeds,
groundnut, cassava, beer,
juices, dried and canned
fruits
Collaboration between
national and regional
public and private
authorities
CEMAC
Coffee, cocoa, spices
(vanilla and pepper),
fruits
and
nuts,
vegetables, fish and fish
products
Live animals (particularly
small ruminants), meat and
meat products, fish and fish
products, tubers and plants
(incl.
peanuts
and
cassava), potatoes
Harmonisation of
regional standards and
other import conditions
within 4 years.
Ghana
Annex to be developed
until the end of March
2008.
No provisions
No
Côte d’Ivoire
Annex to be developed No provisions
until the end of March
2008.
No
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4. Trade defence in the EPAs
Status quo
ACP exclusion from
GATT/AoA safeguards
Maximum safeguard
protection
Pre-emptive safeguards
Safeguards related to
food security
ESA
Yes (limited to 5 years
with option of extension).
No time limits
Yes (max. 200 days)
No. Chapter on
Agriculture will be
negotiated in 2008.
EAC
SADC
Yes (limited to 5 years
with option of extension).
No time limits
Yes (max. 200 days).
No. Chapter on
Agriculture will be
negotiated in 2008.
Yes (limited to 5 years
with option of extension
for BLNS/Moz but SA is
excluded from provisions).
No time limits
Yes (max. 200 days)
No.
TDCA
No provisions
No time limits
Yes, no time limits
Yes, pre-emptive
safeguards can be
applied
 TDCA and Central and West Africa EPAs:
 pre-emptive safeguards if ‘availability or access to foodstuff
is endangered’
 No link in ESA, EAC, and SADC between safeguards and food
security
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Bilateral safeguard conditions in the
ESA EPA (Art. 21)
2. Safeguard … may be taken where a product originating in one Party is being
imported into the territory of the other Party insuch increased quantities and
under such conditions as to cause or threaten to cause:
(a) serious injury to the domestic industry … or;
(b) disturbances in a sector of the economy, .., or
(c) disturbances in the markets of agricultural like or directly competitive
products …
3. Safeguard measures referred to in this Article shall not exceed what is
necessary to remedy or prevent the serious injury or disturbances, as
defined in paragraph 2 and 5(b).
Those safeguard measures of the importing Party may only consist of one or
more of the following:
(a) suspension of the further reduction of the rate of import duty
(b) increase in the customs duty on the product concerned up to a level
which does not exceed the customs duty applied to other WTO Members,
and
(c) introduction of tariff quotas on the product concerned.
The interim EPAs - some facts. TIPS workshop March 2008 17
5. Infant industry protection
ESA
Status quo
EAC
Safeguards to protect
infant industries
8 years within the first 10
years (15 years for LDCs).
8 years within the first 10
years
No new safeguards for a
product that has been
previously subject to
infant industry protection
Other instruments
For 1 year
For 1 year
Treatment of internal
taxation and regulation can
be discriminatory to protect
infant industries (decision
from the EPA Committee
needed).
Temporary introduction/
increase of export taxes
allowed in case of infant
industry. EPA Council
reviews measures after 2
years.
List of products for which
the application of
discriminatory fees and
charges will be allowed for
a limited period of time
shall be created.
SADC
TDCA
8 years within the first 12
years (extendable by Joint
Council)
For 1 year
4 years within the first 12
years (extendable by Joint
Council)
For 3 years
After consultation with the
EC SADC states (except
SA) may introduce
temporary export on a
limited number of
additional products.
Council reviews measures
after 3 years.
No. Quantitative
restrictions and export
duties shall be abolished
immediately.

Provisions to apply safeguard measures in order to protect infant
industries are more generous than in TDCA

However: only applicable for 10-15 years; thereafter only safeguards
 Is this a problem???
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6. The rendez-vous clause
EAC
ESA
Customs and
trade
facilitation

Outstanding
market access
issues


Agriculture


TBT/SPS


Services


Investment

Competition
EAC
SADC

ESA
Social issues
Dispute
settlement


Institutions





Good
governance in
tax areas




Development
cooperation



Integration of
other countries


Current
payments


Any other
areas


Public
procurement




Intellectual
Property
Environment/
sustainable
development
SADC
Personal data
protection

Deadline

Not
Not
31/12/08
mentioned mentioned and
31/12/11 for
service
liberalisation
The interim EPAs - some facts. TIPS workshop March 2008 19
6. The rendez-vous clause
 What are the binding commitments in the IEPA?
 Parties committed to continue negotiations on the
topics outlined in the rendez-vous clause and any
other topic they would like to include
 But:
 African countries did not commit to agree on any of
the provisions that are subject to continued
negotiations
 The rendez-vous clauses for SADC, EAC and ESA do not
mention
 Intellectual property rights protection
 Social issues (such as commitment to respect international labour
standards
 Provisions for personal data protection
The interim EPAs - some facts. TIPS workshop March 2008 20
Main messages
 Only CARIFORUM has yet completed the EPA negotiations
 Except CARIFORUM and EAC only ‘sub-regional’ or country
EPAs exist
 The implications for economic regional integration:
 Offering chances for EAC
 Destroy de facto SADC and COMESA
 Some clauses (MFN, standstill) are inferior than in
CARIFORUM and/or PAC
 ‘Any other area the parties feel being relevant’ can be subject to
ongoing negotiations
 What remains disputed:
 To what extent can single provisions be renegotiated?
 Can a region ‘import’ any superior provision reached within
another region?
The interim EPAs - some facts. TIPS workshop March 2008
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The interim EPAs – some facts
TIPS Workshop
5-6 March 2008