The idea of EPA negotiations
2. Economic Partnership Agreements (EPAs) are being negotiated by the European Commission on behalf of the European Union, with six groups of African Caribbean and Pacific countries. Four of the groups are African countries. The two other groups are the Caribbean and the Pacific regions. EPA negotiations started in 2002 and are due to be concluded by 31 December 2007.It is envisaged that the EPAs will enter into force on 1 January 2008.
3. This date of 1 January 2008 is when the ACP-EU trade relations are supposed to start being based on arrangements that do not need waivers or derogations from the rules of the World Trade Organisation (WTO). Trade relations between the ACP and EU, under the Lome Conventions from 1975 up until now, have mostly been covered by waivers or derogations from WTO rules, but it is felt by the EU that the international economic order has changed and requires trade arrangements that comply with WTO rules.
4. It is the understanding of the EU that compatibility with WTO rules requires reciprocity; each party should liberalise its trade with the other party in a manner that the final agreement is compatible with Article 24 of GATT. In practical terms, regarding customs duties for instance, this means that the ACP countries, including African countries, should reduce their customs duties on almost all imports from the EU to zero. Under the EU’s interpretation of Article 24 of GATT, this means African countries would be required to reduce their customs duties to zero on, at a minimum, 80% of their imports from the EU. Under the Lome conventions, with the waivers, ACP countries were not required to eliminate customs duties on their imports from the EU.
5. Most ACP countries have continuously resisted the idea of reciprocity. There has been a very strong basis for this position. The evidence of impact assessment studies undertaken at national, regional and continental level by the Economic Commission for Africa has indicated that this approach would result in serious adverse consequences, such as job losses, closure of industries or deindustrialisation, loss of revenue, and would disorganise the economic integration process underway in the ACP regions. These findings have been corroborated by other independent studies carried out by research organisations and even impact assessments that some countries have undertaken.
6. The four negotiating groups of Africa are the following: SADC, ESA/ COMESA, CEMAC, and ECOWAS/ UEMOA. It should immediately be pointed out that the membership in these EPA negotiating groups is not exactly the same as the membership of the regional economic communities known by these names.
7. The SADC EPA group is not made up of all member states of the regional economic community called SADC. The SADC EPA group is made up of Botswana, Namibia, Lesotho, Swaziland (BNLS); as well as Mozambique, Angola, and Tanzania (MAT) – sometimes referred to as BNLS and MAT countries. (BNLS are in the SACU together with South Africa, while MAT countries are LDCs.) South Africa participates in the SADC EPA group as an observer. Other member states of SADC are in the COMESA EPA group, which is known as the Eastern and Southern Africa group (the ESA group). These SADC members that are also in COMESA and have joined the ESA Group include Malawi, Mauritius, Madagascar, Zambia, and Zimbabwe. It can be pointed out that Congo DRC has recently joined the CEMAC EPA group; it is a member also of the SADC and COMESA regional economic communities.
8. At the same time, some members of COMESA are not negotiating the EPAs; namely, Egypt and Libya. Egypt already has an association agreement with the EU – under the Euro-med agreements between countries around the Mediterranean and the EU – under which a free trade area is to be gradually formed between Egypt and the EU. The other countries of North Africa also have association agreements with the EU.
9. The existence of an FTA between South Africa and the EU and one between Egypt and the EU raises serious issues if SADC and ESA EPAs are to be based on a customs union approach. The level of flexibility in the South African FTA with Europe is more limited than what the LDC countries negotiating under SADC would expect. In the same vein, the sensitive products identified by Egypt in its FTA are also likely to have consequences on the structure of the common external tariff that ESA countries present in their EPA with the EU. This highlights the important issue of how the EPA configurations will affect the integration agenda of Africa.
10. In Central Africa, CEMAC rather than ECCAS is the negotiating group. The Banjul Summit Decision on RECs designated ECCAS as the regional economic community for Central Africa. In this regard, there could be merit in considering much closer unity between CEMAC and ECCAS in the context of regional integration in Africa and the EPAs. The CEMAC group is entering a free trade area with Sao Tome and Principe in order to include this country in the CEMAC
11. In West Africa, UEMOA and ECOWAS – ECOWAS being the regional economic community that the Banjul Summit designated for West Africa – have formed the ECOWAS EPA group. The ECOWAS secretariat/ commission services the EPA negotiations but UEMOA also participates. The ECOWAS regional economic community has agreed to work towards adopting the UEMOA common external tariff, so that the two communities can negotiate the EPA from a common stand point on customs duties. There is merit also for ECOWAS and UEMOA to consider their much closer unity.