Endangering Cotonou! EPAs: Towards Development or Disempowerment?

1
Endangering Cotonou!EPAs Towards Development or
Disempowerment?

• Muyatwa Sitali
• JCTR/Jubilee-Zambia
• ESA EPA Information Seminar
• 31 May 2007, Lusaka ZAMBIA

2
Whos Afraid of EPAs

• That EPAs are a threat to progress of
  development including the attainment of MDGs is
  a widely expressed concern by many organisations,
  associations, groups and societies.
• ... we come to the conclusion that they (EPAs)
  are not in line with our principles. On the
  contrary, they are a threat to the well-being of
  our people and our economic development. While
  we appreciate the development objectives of the
  Cotonou Partnership Agreement, we are mindful
  that in the current negotiations the European
  Union and our governments have lost sight of
  these objectives. 24 Church organisations
  meeting in Tanzania, April 2007

3
EPA process and Concerns

• Concerned that at this advanced stage of the
  negotiations, Africas priorities have not been
  positively and adequately addressed by the
  European Commission Ministers responsible of
  Trade of the African UnionJanuary 2007.
• There is still no confidence yet in the ability
  of EPAs to be pro-development. UNECA, December
  2006
• A major concern is the impact that the trade
  liberalisation to be wrought by EPAs would have
  on fiscal revenue The prospect of falling
  government revenueimposes a heavy burden on your
  countries (ACPs) and threatens to further hinder
  your ability to achieve the Millennium
  Development Goals. Former UN Secretary General,
  Kofi Annan

4
EPA process and concerns

• We are not ready to embark on full market
  reciprocity arrangements Hon. Dora Siliya, Dep.
  Minister of MCTI, Zambia, April, 2007.
• I am more convinced that the EPAs stand to knock
  us back. EPAs stand to harm us. They will only
  benefit our European partners. The ACP must sit
  up and look at this issue critically. Kwame
  Osei-Prempeh, Ghanaian MP at a Joint EU ACP
  Parliamentary Assembly in Brussels 2005

5
Why the concerns?

1. EUs limited view on development
2. Uncertainties about how much should be
   liberalised EUs proposals to liberalise 80 per
   cent of all trade.
3. Divergences on Benchmarks and the Review clause
4. Differences on Differential Treatment and
   commitments
5. Misunderstanding Art. XXIV on substantially all
   trade
6. Ambiguities regarding WTO Compatibility ---
   Reasonable length of time
7. Pressure to meet 2007 deadline rather than
   development
8. Double standards on financial cooperation and
   assistance

6
1. EUs limited view on development

• The EC favours an approach that would
  indiscriminately open ESA markets inline with the
  EUs Lisbon Strategy of 2000 which aims at making
  Europe "the most competitive and dynamic
  knowledge-driven economy by 2010 by
• Reduced Non-tariff barriers to the EU exports and
  investments
• We need to look at the whole operating
  environment in third countries says the
  Commission, and make sure regulation is
  transparent, non discriminating and the least
  restrictive possible.
• Better access to raw material inputs in order to
  compete on a fair basis the main goal here is
  to completely eliminate export taxes and other
  export restrictions which trading partners use to
  secure their own raw materials supply.
• The opening up of public procurement markets!
  This is an enormous untapped potential for EU
  exporters says the Commission however practices
  in partner countries impede the fair
  participation of EU suppliers and shut them
  out from important exporting opportunities.
• Improvement of the application of trade defence
  (anti-dumping) mechanism by third countries,
  which often cancels out the obtained market
  access for EU in ACPs.

7
2. Uncertainties about how much should be
liberalised EUs proposals to liberalise 80 per
cent of all trade is contrary to EUs development
history
8
3. Different views on Benchmarks and the Review
clause

• ESA group proposed to link regional integration
  and development before liberalisation
• EC response to this proposal is dismissive and
  fails to recognise the need of ACP regions to
  develop before opening up As it is formulated,
  this review clause is not acceptable. While we
  are not against well defined review clauses, we
  (EC) think that they should be limited in their
  scope and mainly aimed at accelerating or
  extending liberalisation. As it is, it may void
  the agreement of its sense. The EC forgets that
  the sense of the agreement is to deliver for
  development, not market opening for the sake of
  it.
• EC suggestion is review be based on timeframes

9
4. Differences on Differential Treatment and
commitments

• ESA region proposed to exempt LDCs from market
  opening commitments as part of a full draft text
  in August 2006.
• ECs response showed a characteristic
  intransigence.
• The LDC opt-out is not acceptable ... Exemption
  from commitments for LDCs would impair the
  achievement of the regional integration and
  development objectives of the agreement.
• ECs acknowledges its negotiating mandate that
  LDCs have the choice to continue the EBA
  arrangement which is typical of a differentiation
  between LDCs and non LDCs.
• On the contrary, the EC has accepted a similar
  proposal from the Pacific ACP which is not based
  on free a trade agreement, and would allow each
  pacific ACP country to either opt in or opt out.
  (Oxfam, January 2007)

10
5. Misunderstanding Art. XXIV on substantially
all trade

• Under WTO, there is no common understanding of
  what substantially all trade means, it is subject
  to interpretation by means.
• Consistent urge to negotiate issues beyond the
  challenge at WTO, e.g services, investments,
  procurement and competition policy
• In WTO negotiations LDCs have been exempt from
  having to commit to new services liberalization.
  Furthermore, the Cotonou agreement does not
  require services liberalization, and suggests it
  should only happen after they have acquired
  experience in applying the Most Favoured Nation
  (MFN) treatment under GATS.
• Outcomes could result in obligations that go
  beyond those agreed in the WTO (WTO-plus), and
  introduce into the bilateral context, issues that
  contributed to the failures of Cancun
  (investment, competition and government
  procurement) and of Seattle (labour and
  environment).

11
6. Ambiguities regarding WTO Compatibility ---
Reasonable length of time

• The EC has interpreted the reasonable length of
  time to be 10 years, stating that it may be
  longer in exceptional cases. However, longer
  implementation periods are the norm not the
  exception. For example, even an FTA between
  developed countries partners such as Australia
  and the US, Includes up to 18-years
  implementation periods.
• ESA countries need time to develop their domestic
  economies before opening up. ESA draft, for
  example, proposes longer implementation periods
  than the EU has proposed up to twenty-five years
  for finished goods, with a ten year
  implementation moratorium (Art. 14), as well as
  an unknown number of sensitive products to be
  exempt from liberalization commitments (Art. 15).

12
7. Alternatives, EC putting non-LDCs in a dilemma

• EC would only begin to consider alternatives if a
  particular country stops to negotiate. The EC
  have said they are not looking at Alternatives
  because all ACPs have continued to negotiate.
  This overthrows calls by the AU countries to have
  alternatives.
• A country can only make that choice when they
  know what other options are available. It makes
  sense to have options first then countries can
  make a choice.
• If the EC withdraws Cotonou preferences on 1st
  January 2008, the Community would breach the
  Cotonou agreement, which prescribes a new
  framework for trade which is equivalent to their
  existing situation and conformity with WTO
  rules. The European Commission appears to lack
  the political will to comply with that commitment
  in the Cotonou Agreement.

13
8. 2007 deadline and waiver

• There is no agreement yet on a number of items on
  the EPA check list either on the trade or
  development dimension
• ESA negotiators have already quoted many reasons
  including capacities and supply side constraints
  that necessitate the extension of the negotiation
  and the waiver defacto.
• Almost a year past following the expiry of the
  Lome waiver in January 2000 before it was
  renewed, and no WTO members complained.
• EPA negotiations were to be finalized three years
  after the end of the DOHA negotiations to build
  on the expected more pro-development multilateral
  trade rules, including further clarity of
  flexibilities under WTO/GATT Article XXIV.
  However, in the DOHA negotiations, deadlines have
  been missed by the day.
• Without a clear conclusion from the DOHA Round,
  there is no urgency for finalizing EPA
  negotiations.

14
9.Double standards on financial cooperation and
assistance

• The EC is interested to fund only those issues
  which they prefer rather than those outlined by
  ESA.
• For example, the EC is ready to finance capacity
  building for trade-related issues, like trade
  facilitation competition, investment, and
  transparency in public procurement but not for
  preparatory studies to undertake negotiations on
  trade in services.
• When west African negotiators asked for an
  extension in the negotiations, ECs response was
  that failure to sign EPAs on time would lead to
  higher tariffs on more than 1 bio Euro or 9.5 per
  cent of West Africa trade to EU

15
Conclusion

• The areas of divergence are many
• Outcries from different countries asking their
  governments not to sign EPAs because of
  unclarified issues indicate peoples perceptions
  of EPAs
• Time for deep introspection is now
• Poor countries chance to move up the ladder of
  development and meet the MDGs is now but poor
  countries are kicking away the ladder
• Partnership, not patronage is the imperative of
  this era, age and generation.
• Until the EC and our governments demonstrate to
  us how CPAs commitment to poverty reduction will
  be operationalised through an EPA, CSOs must
  continue to oppose EPAs.

16
END

• Thank you for listening in