What can ESA EPA draw from them?
Isabelle Ramdoo
24-25 November 2014
Harare, Zimbabwe
Structure of presentation
Part I: State of play
• Recently concluded EPAs: Who’s in? Who’s out?
• Trade regimes with EU: where are we?
Part II. Comparing EPAs:
• SAT: What’s in? what’s out?
• Key provisions on market access
• Rules of origin
Part III: EU’s trade agreements with third parties
• Where are we?
• Recently concluded ones: what’s important
• TTIPand TTP: Game changers?
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Part I: State of play
Who’s in? Who’s out?
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Who’s out? (27 ACP countries)
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b. What regimes apply to African countries?
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Part II: Comparing EPAs
ECOWAS and SADC EPA groups concluded a regional EPA in July.
Market access preserved, once agreements enter into force; For
the moment MAR applies for those that were under the regul;
TDCA continues for SA; and GSP for Nigeria
EAC: Regional agreement concluded on 14th Oct. (after deadline).
Kenya non-LDC, currently trading under GSP till agreement enters
into force. Others EBA. Estimated loss: $140 million per year; Key
sectors impacted fresh produce (40% destined to Europe), mainly
fresh roses and cut flowers (5 – 8.5% duties); coffee (2.6% tariff).
But regional unity preserved.
Cameroun: ratified goods-only EPA. No regional agreement in
Central Africa
implementing interim EPAs. No regional agreement.
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In a Nutshell: What’s in? What’s out?
What’s in?
1. On the EU side, save for South Africa, all countries have DFQF on all
products: Timeframe, since 1st January 2008 for those that were
covered under MAR; for others, once EPAs enter into force
2. On the African side: Trade in goods agreement + devt;
Coverage: at least 75% openness over up to 25 years
South Africa: 105 GI; EU: 251 GI
Subsdies on agric. Exports eliminated (except in ESA)
Development: PAPED Euros 6.5 billion
Flexible but different RoO (on cummulation & asymetry (EAC)
What’s out?
Excluded: Sensitive products, including both agricultural and industrial
products that are produced domestically
To be negotiated: Services; Investment; IPR; and other trade related
issues (RDV clause)
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Key provisions on market access
1. Tariff phase down
1. EAC EPA: to liberalize 82.6% over 25 years, as follows
Exclusion: agricultural products, wines and spirits, chemicals, plastics, wood
based paper, textiles and clothing, footwear, ceramic products, glassware,
articles of base metal and vehicles.
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2. SADC to liberalize 80% of its trade with the EU.
2 MA lists: SACU region, namely Botswana, Lesotho, Namibia,
Swaziland (BLNS) and South Africa; and Mozambique (agreed already
in 2007)
SACU Tariff phase down
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EU Tariff phase down for SA
Geographical indication: 105 SA GI and 251 EU GI protected
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3. ECOWAS Tariff Phase down: 75% of its tariff lines, based on CET,
over 20 years
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Key other provisions
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Key provisions on RoO
1. Value Tolerance
15% ex-works price (for EU and ESA)
Same as ESA
15% allowed on weight on Ch 1- 24
15% ex-works price for Ch. 24 – 97
ECOWAS: 10% ex-works price for EU
15% ex-works price for ECOWAS
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2. Cummulation
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3. EAC has asymmetric RoO for on specific products: Key ones
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Part III: FTAs with third countries
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State of play since ESA signed EPA (2009):
Being implemented
EU – Peru – Columbia: 2013
EU – Central America (Costa Rica, Panama, El Salvador, Guatemala, Honduras,
Nicaragua, 2013
EU – South Korea: 2011
EU – Singapore: Agreement initialed in Sep. 2013 but investment negotiations
concluded in November 2014
EU – Canada : 26 Sep. 2014 concluded. To be signed – 1st FTA with a G8
EU – Eastern Neighbourhood: Moldova, Armenia, Georgia: Initialled in Nov. 2013
EU – Ukraine (concluded in 2011, but signature suspended)
Yet, more than 60% of EU’s trade is currently not covered by FTA.
Currently been negotiated:
EU – India: launched in 2007
EU – ASEAN (with 4 countries – concluded with Singapore; ongoing with Thailand,
Vietnam and Malaysia)
EU – Mercosur: launched in 2000; suspended in 2004; resumed in 2010
EU – Japan: Negotiations launched in April 2013
EU – US: Negotiations started in July 2013
EU – China Investment Agreement: Launched in November 2013
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Mega-deals: a game changer?
WTO negotiations are in a deadlock; Key issues about agriculture and
industrial products were not addressed in Bali and will be increasingly difficult
to get concensus
Big players feel need to reshape global trading system as globalization
deepens and the world become more interconnected. About 60% of global
trade is made of of trade in intermediaries. Multilateral system does not seem
respond rapidly enough to changes to fit a 21st century trading system
Strategic interest. Geopolitical rise of China – soon to be the leader in global
trade. A way for EU and US to join forces to maintain access to key markets
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Main trading partners of large economies
Fig 1: EU’s Main trading partners, 2010
Fig 2: US’s Main trading partners, 2012
Fig 3: China’s Main trading partners, 2010
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If successful, mega trade deals are expected to have significant
impacts on:
Trade flows, investment direction and intensity;
The structure of regional and global value chains;
The regulatory dimension of trade (i.e redefining the rules of the
Current FTAs the EU have
This new generation type of agreement are expected to be about:
WTO ‘plus’ issues – i.e go deeper than what is provided for in
current WTO agreements
WTO ‘extra’ issues – i.e to cover issues that are not part of
WTO such as data protection, trade facilitation in supply chain
management, export restrictions, consumer protection etc
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More importantly, they will :
1. not only be about tariffs, but about:
a. Regulation, standards, norms
b. Licensing practices
c. Domestic taxes
d. Investment
And not only about trade, but about
Human rights;
Labour rights
Need to look at the future trade relationship between Europe
and Africa in that broader context – the inter-connectedness
between Europe and big players will have spill-over effects
on EPAs (cf RDV clauses – mandate, depth, coverage etc)
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In a nutshell, we are talking about:
1.Trans-pacific partnership (TTP) – 12 countries incl. US, Japan, Canada, Australia,
Singapore, Mexico, Chile, New Zealand, Brunei, Peru, Vietnam and Malaysia.
2. Transatlantic Trade and Investment Partnership (TTIP) between EU and US
1. Regional Comprehensive Economic Cooperation (RCEP), 16 countries of which 10
ASEAN countries (Brunei, Myanmar, Cambodia, Indonesia, Laos, Malaysia, Philippines,
Singapore, Thailand, Vietnam); Australia, China, India, Japan, S. Korea, New Zealand.
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Key elements of the TTIP and the TTP
Tariffs (more important for US-Pacific TTP than EU-US TTIP) and
potentially subsidies in agriculture
Trade in services, investment (possibly including state-investors
dispute), intellectual property
Trade-related issues such as government procurement, competition
policy, e-commerce, environment, state-owned enterprises (for TTP)
Regulatory and non-tariff measures such as norms, standards, testing
requirements, procedures, technical regulation, food safety
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In the case of the TTIP between EU and US
Regulatory compatibility and convergence about rules will be the
heart of the EU-US negotiations
It is estimated that av. tariff protection on imports in EU and US range
between 2.2 – 3.3% respectively, while ad valorem tariff equivalent
protection form NTMs range between 19% - 73%.
It is also estimated that up to 50% of those barriers could potentially be
eliminated (most optimistic scenario)
If standards are harmonized, this means that non-parties to the
agreement may be requested to meet those standard to remain
competitive on the market.
Third countries (incl. African countries) may face higher compliance and
trade costs if they want to maintain access to these markets (despite
their existing trade regimes with EU – EPA or not!!) unless they are
extented the mutual recognition agreements (under MFN??)
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Where does that leave us in ESA?
1. On the multilateral system:
• Might distract attention from WTO on key issues.
• As a reaction, other large developing economies might be tempted to do
same (RCEP, FTAAP) leading to competitive liberalization.
• Will erode margins of preferences specially for LDCs under Hong Kong
• These issues might find their way back into the WTO at some point
2. Preference erosion:
TTIP (EU-US): Not much impact on EPAs or AGOA. Trade structures are not
same. Issues more about regulatory convergence and non-tariff issues
TTP – (US – Pacific): Challenging for AGOA. Many Asian countries key
RCEP: China, India have DFQF for LDCs. Preference erosion as non-Asian
LDCs will get more access to Asian markets; For the rest, will be (even
more) difficult to compete in Asia
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3. Rules taking
As already mentioned, might have implications on the regulatory
frameworks through regulatory convergences (through mutual
recognition agreements) in particular on services and investment
Important for ESA, because those have not been negotiated yet.
Therefore key to ensure that ESA is regularly updated on what MRAs
are negotiated to ensure the best deal
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Conclusion: some suggestions
1. Forging strategic responses, through
a. Unilateral initiatives to calibrate domestic reforms to be prepared to meet
standards. Otherwise the risk is marginalization since you will de facto become
rules takers.
b. Regional/ continental trade negotiations should keep pace with these
evolutions and by expediting regional agenda
c. In EPA Committee, these need to be regularly discussed. Use MFN clause
here to the maximum extent in particular to seek the extension of MRAs on
norms and standards; With US, ESA could seek a TIFA type of framework
2. Forging strategic alliances:
At the WTO, through the Africa and other groups. Big players might attempt to
multilateralise some of these provisions (not only on rules but also WTO plus
and extra ones). Key therefore to play a leading role to ensure developing
countries’ interests are preserved, while being ensuring the trading system fits
the evolving global landscape.
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Thank you
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