| Issues & Themes |
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INTRODUCTION In their approach to the EPA negotiations the ACP identifid six areas within which the negotiations should be conducted:
While the European Commission favoured a different approach this paper seeks to review the progress made in each of these six areas from an ACP perspective. MARKET ACCESS - Areas Addressed Under Market Access Under phase 1 five areas have been discussed: · principles and objectives for access for non-agricultural
products; - Areas of Convergence It has been agreed that the market access arrangements to be concluded should not leave any ACP state worse off than is currently the case and that indeed market access arrangements should build on and improve the current acquis. It has also been agreed that the details of product coverage of individual EPAs and the specific structure of the transition period for the implementation of individual EPAs should be agreed at the nationl or regional. It is also agreed that all EPAs should incorporate appropriate safeguard provisions. It is unclear what the commitment to ensuring no ACP country is worse off will mean in the area of agricultural market access where the process of CAP reform is eroding the value of ACP preferences by systematically reducing the prices paid on the EU market for a range of basic commodities which the ACP export to the EU (including, for example, products as diverse as beef and rice). This is compounded by the process of preference erosion resulting from multilateral trade liberalisation through the WTO. Equally the agreement that the details of the product coverage and specific timetables for the phasing in of the provisions of any agreement should be subject to agreement at the regional or national level would not prohibit the conclusion of guidelines for such arrangements as an integral part of the conclusion of phase 1 of the ACP-EU EPA negotiations (although effectively this issue has now been superceded by events). This issue could have been addressed as an integral part of any formal and legally binding ACP-EU framework agreement concluding phase 1 of the negotiations. However no such legally binding agreement has been concluded merely a set of common conclusions which will provide " a point of reference" to "provide guidance" to the phase 2 negotiations. While there is agreement on the need for safeguards, there is as yet no agreement on the nature and scope of such safeguards (for example, can they be pre-emptive, involving the monitoringa nd surveillance of trade in sensitive products and allow for swift and effectoive measures should a potential threat of market disruption emerge?) - Area of Divergence While there is agreement that future market access arrangements should not leave any ACP state worse off, the ACP position includes the specification that this objective be respected "whether or not ACP countries participate in EPAs". This ACP position implies a need for an EU initiative on alternative trade arrangements for ACP countries (particularly non-least developed ACP countries) who feel unable to sign up to any economic partnership agreement arrangements. The European Commission however to date shows no indication of a willingness to explore how a non-punitive alternative to EPAs for non-least developed ACP countries could be established in ways which ensure that no ACP state is worse off. The European Commission appears to beleive that WTO rules do not allow for any other alternative but EPAs. The EU, while recognising the need to back load certain products under any EPA does not agree with the ACP proposal that there should be a five year moratorium on the commencement of tariff dismantling by ACP countries. Equally the EU does not agree to ACP proposals that the implementation of taritf dismantlement should be linked to the attainment of certain development indicators by ACP countries, in order to ensure that ACP countries are adequately equipped to meet the challenge of free trade with an economic giant like the EU. AREAS OF DIVERGENCE Equally there is no agreement on any modification of the current rules of origin for ACP products to recognise the increasingly global nature of input procurement and the need for ACP countries to base their industrial development initially on final stage processing of inputs procured elsewhere. The EU has agreed however that this issue should be subject to more detailed discussions by relevant groups of experts. There is a need however for such discussions by groups of experts to be guided by a clear political commitment to opening up new market opportunities for ACP exports, based on substantive processing in ACP countries of non-originating raw materials. AGRICULTURE AND FISHERIES ISSUES - Areas Addessed Under Agriculture and Fisheries Issues Under phase 1 six areas have been discussed: · objectives and principles to guide negotiations on agricultural
and fisheries issues;
There is agreement on · the importance of agriculture and fisheries issues to
poverty eradication and sustainable development in ACP countries; - Areas of Divergence However, the areas of agreement mask significant divergences on the specific measures which can and should be taken as an integral part of preparing the ground for the negotiation and implementation of EPAs. On PMDT issues the ACP believe that effective programmes of support in this area are essential for the transformation of ACP economies. The EU for its part believes that PMDT can only have any real impact if there is a dynamic private sector in the ACP countries concerned operating within an enabling environment. An enabling environment, which in the EU's view, can best be created by the conclusion of the European Commision's proposed Economic Partnerhsip Agreements. On SPS issues the ACP want to see a standstill on EU SPS measures for five to ten years and the establishment of a detailed dialogue on how genuine EU health concerns can be addressed without imposing excessive burdens on ACP suppliers, which make the exploitation of market opportunities impossible or uneconomic. The EU is of the believe that equivalency agreements are not possible with ACP countries given the weaknesses which exists in ACP testing and verification arrangements. This means ACP countries will face high costs in certifying and verifying compliance to EU standards, costs which can make exporting uneconomic. While the EU recognises the need to address export refund issues on a case by case basis it is not willing to recognise the importance of addressing the trade consequences of new forms of CAP distortions linked to the new systems of farm support the EU is creating. This is because the EU maintains such systems of support are non trade distorting despite the fact that such systems of support have production and trade outcomes which simply would not occur in the absence of such public aid programmes. While paying lip service to building on the existing aquis and taking into account the impact of CAP reform, the EU is not recognising the extent to which CAP reform is undermining the economic value of the acquis and hence the need for new arrangements in order to maintain the value of the acquis. Until such time as the EU recognises these realities, the broad agreement on the need to maintain the acquis and address the impact of CAP reform, will have little impact on ensuring that ACP countries continue to gain real benefits from the system of trade preferences the EU establishes for agricultural and value added food product exports from ACP countries. In the area of fisheries the EU is opposed to the conclusion of
framework ACP-EU fisheries agreements setting out the need to address
the sustainable management of ACP fisheries resources, obligatory
landings and other issues linked to ensuring that the ACP maximise
the long term benefits from their increasingly valuable yet vulnerable
fisheries resources.
- Areas Addessed Under Development Issues To date only general principles relating to the development issues to be addressed as part of the EPA negotiations have been discussed. This is reflected in agreement on generalities but fundamental disagreement on substantive practical issues. - Areas of Convergence To date there is agreement that: · EPAs should not be seen as an end in themselves but as
a means to the achievement of wider objectives; However, beyond these general statements there is little agreement about what this should mean in practice when it comes to concrete programmes and policy initiatives and the sequencing of the various policy changes and support programmes envisaged or under discussion. - Areas of Divergence The major area of disagreement is on the need for additional resources to finance the many and varied programmes which will be needed to equip ACP economies to meet the challange of free trade with the EU. The ACP does not want to see funds to meet the costs of adjustment associated with the introduction of EPAs divert financial resources away from existing development co-operation priorities. Equally the ACP would like to see a dramatic improvement in the deployment and effectiveness of EU aid instruments. The European Commission for its part see's no need for additional funding to be made available so long as so much of the existing committed EDF funding remains unspent. Equally the Commission believes that it is important to get the policy context right (i.e. through signing EPAs) before designing and implementing restructuiring programmes. There is therefore a fundamental disagreement between the ACP and the EU on the issue of the sequencing of restructuring assistance and the phasing in of tariff reduction commitments The issue of EU assistance to fiscal and economic restructuring and social programmes associated with the implementation of EPAs has yet to be substantively discussed. The ACP side would like to see these issues comprehensively addressed as part of the negotiations. The EU believes these issues still need to be thoroughly discussed before the approach to dealing with them can be determined. AREAS OF DIVERGENCE |