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Deadlock of Economic Partnership Agreements (EPA) in Ouagadougou

TWN Africa

Deadlock of Economic Partnership Agreements (EPA) in Ouagadougou

Tetteh Hormeku, Head of Programmes | 2/2/2007

EPA negotiators from West Africa and the European Union meeting in Ouagadougou, Burkina Faso, from the 23 -26 January, failed to reach agreement on key issues regarding the results of the mid-term review of the EPA negotiations and the way forward. They were also unable to agree on some matters relating to the basic principles in the reference framework for the negotiations. These issues have therefore been referred to the meeting of Chief Negotiators, a higher level in the ECOWAS-EU EPA negotiating chain, at their meeting scheduled for February 5, in Brussels.

At the end of four days of meetings of experts, followed by senior officials, from West Africa and the European Commission, the two sides were deadlocked over four issues. Two of these, relating to the mid-term review, concerned: (a) whether or not the deadline for the negotiations should be extended beyond the original date of December 2007, and (b) whether or not to include in the final report of the review, the tasks and measures that West African countries find necessary to be completed in order for a successful conclusion and implementation of a development friendly economic partnership agreement.

In addition to these, there was also disagreement about the extent of market access that the European Union was prepared to offer West Africa, and whether the EU should be allowed to rely on the notion of sensitive products in defining its market access offer. The fourth issue concerned the scope of EU’s responsibility in relation to the “net fiscal” costs of tariff liberalisation attendant upon the implementation of an EPA.

On the question of the deadline for the completion of the negotiations, the EU insisted that the original date of December 2007, as set in the Cotonou agreement must be respected. The EU representatives argued that changing the deadline will require a new WTO waiver for the current non-reciprocal trade preferences granted to the ACP under the Cotonou Agreement and that such a waiver was difficult and costly to obtain.

EC officials referred to the context of earlier cases brought against the trade regime at the WTO in which the EU lost, arguing that the request for a waiver would be resisted by the interested countries. They said many ACP countries had products that could give rise to the resistance of a waiver.

The EC negotiators argued further that the waiver was a complex process, pointing to the fact that the US application for a waiver for the AGOA remains to be approved two years after the application.

[The Senior EC official at the negotiations, Peter Thompson, Director at the DG- Trade, Thompson had made a similar argument in his talk to African Ministers of Trade at their extraordinary meeting in Addis Ababa earlier, on 16 January. At that meeting he also added that talks about extension of the time-line for the negotiations were likely to deflate the gathering momentum of EU member governments who had become receptive to the need to provide extra resources to meeting the adjustment costs of the EPAs.]

On their side, the West African negotiators stated that they were bound by the political decision taken by their Ministers on the need for a three year extension to the negotiating timeline.

That decision was taken at the meeting of the Ministerial Monitoring Committee, in Abuja on the 31 of November, 2006. In this respect, the West African Heads of State, at a summit in Ouagadougou on 19 January, “invited the negotiators to exercise all the necessary flexibility with a view to concluding a viable EPA in the interest of the populations in West Africa”.

The controversy over the deadline was linked to the next issue over which the negotiators deadlocked in Ouagadougou, concerning the inclusion of the list of outstanding tasks in the review report. According to the West African negotiators, the mid-review had shown that a list of tasks had to be completed in order for the negotiations to yield an EPA that would contribute both to poverty reduction, and to the economic development of countries in the region.

These tasks and measures were grouped into three categories: those that had to undertaken before the conclusion of their negotiations; those that had to be undertaken before the implementation of the final agreement; and, those to be carried out in parallel with both negotiations and the implementation of an agreement.

In the course of the negotiations, there was agreement with the EC negotiators, who did not initially object to the inclusion of the tasks in the report, to do an additional grouping of the tasks and measures into those that needed to be carried out jointly by both parties, and those that each party had to carry out on their own. The EC also suggested and it was agreed that an earlier decision to establish three working groups to handle the negotiations be inserted in the report.

It was after this that the EU objected that only those tasks that are identified as joint should be included in the review report, whilst those identified as the sole responsibility of each party should not be included in the report.

To the West African negotiators, the EU demand would mean that the parties would not recognise and make appropriate allowances, both in time and resources needed, for undertaking the preparatory work necessary to an effective negotiation, and for the negotiation itself. The West African negotiators found this particularly unacceptable since, in their view, they had more to do than the EU in order both to prepare themselves adequately to negotiate, as well as adjust their economies to meet the burdens of EPA.

Furthermore the West African negotiators argued that it was only by reference to the list of tasks that one could correctly assess how much time was needed for the negotiations and whether there was sufficient time to conclude the negotiations by the end of the year. (Indeed, according to officials present at their summit, the West African Heads of State gave instructions that their negotiators provide a clear list of outstanding tasks that are necessary for the successful conclusion of the negotiations, upon which basis they invited the negotiators to exercise flexibility in relation to the negotiating deadline.)

There was a general belief that the EC’s position was motivated by their fear that including the list in the report will provide a formal basis for arguing for an extension to which they were opposed.

The third area of disagreement related to extent of market access that West African products would enjoy in the European Union. This arose from the demand by the EC to the effect that any EU market opening should take account of the EU’s sensitive products.

According to the West African negotiators, if accepted, this demand would lead to the majority of West African countries being worse off with the EPA than they are now. They explained thirteen out of the 15 ECOWAS countries were LDC’s which enjoyed the status of “Everything But Arms”, and this must be maintained in any subsequent EPA agreement. Allowing the EU to have recourse to “sensitive products” will mean the EU would be able to exclude certain products from market access coverage, which is not what pertains in the case of ‘Everything But Arms.’

In addition, a new category of sensitive products, which the EU has not yet defined, will be a further erosion, since the existing language already foresaw only the “largest possible” market opening by the EU.

EC negotiators replied that this was a political matter that was out of their hands.

The last area of fundamental disagreement concerned the issue of how much responsibility would be assumed by the EU in meeting the net fiscal costs of tariff liberalisation. While the EU is prepared to make a contribution, the level of which will be negotiated, the West African negotiators wanted the EU to commit to meeting the full costs. According to the latter this is because in the original formulation, that is before the issue of responsibility was raised, the EC had insisted that only the net, rather than the total, fiscal costs be subject for negotiation. In agreeing to this, the West African negotiators argued that they had effectively conceded that their countries would meet the other elements of the fiscal costs themselves. They therefore did not think it was now open for the EU only to commit to some indeterminate quantum of the costs. On its side the EC says its commitment will depend upon what the actual costs turn out to be.

In the view of West Africa negotiators, how the above disagreements are resolved in the February 5 meeting of the Chief Negotiators, will not only determine the space available to them to negotiate effectively. It will also set the parameters of how far their vision of a development-friendly EPA could be realised. In refering these issues to the meeting of the Chief Negotiators, both sides have signalled that it was up to political leaders, as well as social groups concerned by the EPA, to act in the direction appropriate to their interests.

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 source: TWN Africa