What else needs be considered when negotiating an EPA

1
What else needs be considered when negotiating an
EPA?

• CSPP Partners' Workshop
• August 2007

2
What the workshop says so far

• Both, an EPA and a non-EPA imply costs
• The workshop
• analysed whether the trade in goods
  liberalisation commitments of an EPA would be
  feasible for Uganda
• named the potential costs of not signing an EPA,
  such as loss of aid
• Your results suggest
• It would be feasible for Uganda to liberalise
  substantially all trade in goods towards the EU
  and to exclude sensitive products
• But
• EPAs are not only about trade in goods
  liberalisation and
• EPAs are supposed to be regional agreements

3
What else will be in an EPA?

• The Commission would like to include services and
  trade-related issues (investment, competition,
  trade facilitation, public procurement,
  intellectual property)
• EC major objective is to simplify and harmonise
  the rule of the game and to promote trade and
  sustainable development
• ACP Obligations go beyond what has been agreed
  under WTO and will constrain policy space and
  countries capacities
• Who is right?
• We do not know this depends largely on how the
  provisions that are included into an EPA look like

4
Services

• Commission proposes positive list i.e. ACP
  countries shall determine selected services they
  would like to liberalise vis-à-vis the EU
• Cost/benefit analysis for Uganda goes beyond the
  workshop
• General approach has to be in line with GATS
  (substantial)
• GATS flexibility rules are more generous real
  asymmetry with respect to covering, deepening and
  time frame of liberalisation would be possible
• Existing EU FTAs incorporate provisions on
  services in a very different manner, from
  economic cooperation and potential liberalisation
  (TDCA) to the liberalisation of services in
  various fields (Chile)
• EU would like to go beyond TDCA

5
Trade-related issues

• The Commission would like to include some
  trade-related areas.
• How these areas will be covered is largely
  unknown.
• The devil is in the detail
• Some provisions are likely to go beyond pure
  declaration of intents to cooperate on
  trade-related issue in order to facilitate trade.
• To what extent binding commitments are in
  Ugandas interests would need to be evaluated on
  a case by case basis.

6
How to box smart

• Identify what you would like to get out of it
• Such as technical and financial assistance to
  build-up a national competition authority, to
  facilitate border procedures, to comply with EU
  standards etc.
• Identify what you are ready to give without
  giving too much
• Analyse previous EU FTAs to check out what is
  possible
• Example TDCA only shallow provisions on
  trade-related issues centred on cooperation
• Identify your obligations under an EPA (such as
  the creation of new institutions and
  administrative authorities) and link them to the
  Development Chapter.

7
What is about the regional component?

• The EU would like to enter into EPAs with ACP
  regional blocks
• Problem No ESA CET will be formed until the end
  of this year
• RI is in its infancy ESA members are very
  heterogeneous with respect to their tariff
  structures and defensive interests
• Overlapping memberships in ESA EAC and SADC
  plus not all COMESA countries are part of the ESA
  group
• What countries will finally enter into the ESA
  EPA?
• Some countries might join alternative EPAs or
  even create a new EPA Eastern African Community
• Some countries might opt for EBA / trade under
  GSP

8
What is about the regional component?

• Special and differential treatment for LDCs will
  be very difficult
• As landlocked country Uganda mainly imports via
  its neighbours
• Does Uganda have the capacity to supervise
  indirect EU imports and tax them accordingly?
• Indirect EU imports are also a problem when
  rejecting the EPA
• Long transitional periods would offer the chance
  to harmonise tariffs regionally before opening up
  to the EU
• BUT the ESA EPA is supposed to make a regional
  offer by the end of this year

9
How to box smart

• Evaluate the option for a framework EPA which
  would be a basic FTA that complies with Art. XXIV
  WTO
• What would be needed
• ESA/EAC had to agree in principle to enter into a
  reciprocal trade relation with the EU
• The EU would need to accept that EPAs are not
  finalised by the end of this year
• How it could look like
• The parties agree on the time frame of
  liberalisation
• ESA/EAC defines the first charge of
  liberalisation (2008) all other charges (5, 10,
  15, 25 years) would be specified later
• What is the benefit
• The framework EPA would make EU-ACP trade
  relations WTO compatible and buy in time for
  regional harmonisation

10
What else needs be considered when negotiating an
EPA?

• CSPP Partners' Workshop
• August 2007