the interim epas – some facts
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The interim EPAs – some facts. TIPS Workshop, Pretoria 4-5 March Dr Mareike Meyn. Overview. Which countries are the EPA signatories? What do the liberalisation schedules say? What else had been agreed? (Export duties, standstill clauses, MFN, SPS/TBT…) Trade defense - PowerPoint PPT PresentationTRANSCRIPT
The interim EPAs – some facts
TIPS Workshop, Pretoria 4-5 March
Dr Mareike Meyn
The interim EPAs - some facts. TIPS workshop March 2008 2
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 3
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
3
2
1
1. SADC EPA
2. EAC 5
3. ESA EPA
The interim EPAs - some facts. TIPS workshop March 2008 5
Original EPA configurations and signatory states in southern and eastern Africa
Members Signatory states in December 2007 a
Countries falling into EBA/Standard
GSP
Proportion of
signatory countries
Number of liberalis-
ation 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
The interim EPAs - some facts. TIPS workshop March 2008 6
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
The interim EPAs - some facts. TIPS workshop March 2008 7
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
The interim EPAs - some facts. TIPS workshop March 2008 8
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
The interim EPAs - some facts. TIPS workshop March 2008 9
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
The interim EPAs - some facts. TIPS workshop March 2008 10
Summary of liberalisation schedules
SADC ESA EAC
Total time of liberalisation
10 years 15 years 25 years
Liberalisation start
2008 2013 2010
Exclusion list (average value of EU imports 2004-06)
x – 37.8% 2.5 – 20.1% 19.7%
Regional approach
Partly (BLNS) No Yes
Review of tariff concessions for RI
Yes Yes No
The interim EPAs - some facts. TIPS workshop March 2008 11
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 12
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?
The interim EPAs - some facts. TIPS workshop March 2008 13
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 anti-dumping/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 14
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 15
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 until the end of March 2008.
No provisions No
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4. Trade defence in the EPAs
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
Status quo ESA EAC SADC TDCA
ACP exclusion from GATT/AoA safeguards
Yes (limited to 5 years with option of extension).
Yes (limited to 5 years with option of extension).
Yes (limited to 5 years with option of extension for BLNS/Moz but SA is excluded from provisions).
No provisions
Maximum safeguard protection
No time limits No time limits No time limits No time limits
Pre-emptive safeguards Yes (max. 200 days) Yes (max. 200 days). Yes (max. 200 days) Yes, no time limits
Safeguards related to food security
No. Chapter on Agriculture will be negotiated in 2008.
No. Chapter on Agriculture will be negotiated in 2008.
No. Yes, pre-emptive safeguards can be applied
The interim EPAs - some facts. TIPS workshop March 2008 17
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 18
5. Infant industry protection
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???
Status quo ESA EAC SADC TDCA
Safeguards to protect infant industries
8 years within the first 10 years (15 years for LDCs).
8 years within the first 10 years
8 years within the first 12 years (extendable by Joint Council)
4 years within the first 12 years (extendable by Joint Council)
No new safeguards for a product that has been previously subject to infant industry protection
For 1 year For 1 year For 1 year For 3 years
Other instruments Treatment of internal taxation and regulation can be discriminatory to protect infant industries (decision from the EPA Committee needed).
List of products for which the application of discriminatory fees and charges will be allowed for a limited period of time shall be created.
Temporary introduction/ increase of export taxes allowed in case of infant industry. EPA Council reviews measures after 2 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.
The interim EPAs - some facts. TIPS workshop March 2008 19
6. The rendez-vous clause
EAC ESA SADC
Customs and trade facilitation
Outstanding market access issues
Agriculture
TBT/SPS
Services
Investment
Competition
Current payments
Public procurement
Intellectual Property
Environment/ sustainable development
EAC ESA SADC
Social issues
Dispute settlement
Institutions
Personal data protection
Good governance in tax areas
Development cooperation
Integration of other countries
Any other areas
Deadline Not mentioned
Not mentioned
31/12/08 and 31/12/11 for service liberalisation
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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 21
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
5-6 March 2008