South Africa Plays Role in Assisting Poorest Countries of the World Negotiate with the EU

Important negotiations are being held in Brussels, Belgium, between fifteen of the world's richest nations of the European Union and seventy- nine of the world's poorest nations of the Africa, Caribbean and Pacific (ACP) on the Economic Partnership Agreements (EPAs). Forty-seven of these countries are from Africa.

Given South Africa's commitment to global poverty eradication, the South African government had pledged to the ACP its assistance to the organisation and its member states in whatever way possible and to share its experience with the ACP in negotiating reciprocal trade arrangements with the European Union. Furthermore, these negotiations will fundamentally change the trade policy of Africa. South Africa has had experience in negotiating the Trade and Development Cooperation Agreement (TDCA) with the EU.

Eight months after the start of the negotiations between the ACP and the EU, progress has been slow mainly because the issue of geographic configurations of some of the regions including southern Africa have not yet been resolved. During the 3rd ACP Summit of Heads of State and government held on 16-17 July 2002 in Nadi Islands, Fiji, President Thabo Mbeki reiterated South Africa's commitment to share her experience with the ACP in negotiating with the EU and give whatever technical support necessary. Earlier in April 2001 in Sandton, Johannesburg, Deputy President Jacob Zuma indicated South Africa's commitment to assist the ACP and as late as April 2003, he reminded them, when visiting Brussels and addressing ACP Committee of Ambassadors, of South Africa's pledge and commitment.

During early September 2002, an expert from South Africa's Department of Trade and Industry was seconded to the ACP Secretariat for a week to assist the ACP to prepare documentation for the launch of the EPA negotiations on September 25, 2002. In February this year, South Africa sent two of its experts who were involved in the TDCA negotiation, Dr Bahle Sibisi and Ambassador Fazel Ismael, South Africa's Ambassador to the World Trade Organisation in Geneva, to Brussels to take part in the ACP organised seminar, familiarising ACP Ambassadors with negotiating strategy, processes etc.

Under the leadership of Ambassador Jerry Matjila, the South African Embassy to Belgium and Luxembourg and Mission to the European Communities, participates actively in the conception of policies, objectives, elaboration of outcomes and particularly in strategy development processes of the ACP negotiating teams, which is highly appreciated by the ACP Committee of Ambassadors.
Issued by the South African Embassy to Belgium and Luxembourg and Mission to the European Communities

For more information, please contact First Secretary Ms. Suhayfa Ebrahim Zia, Head of Media and Communication.

Brussels, 23 May 2003

BACKGROUND

The ACP and the European Communities signed a landmark agreement in Cotonou, capital of Benin, in June 2000 to end the Lomé Convention. The new agreement Cotonou Agreement (CA), has dramatically changed the ACP-EU relations and committed the two groups to kick-start a new reciprocal trading arrangements that will oblige both to open their markets to each other's goods and services. The trading arrangement will have to be WTO compatible. They both agreed that this Trade Chapter that they committed themselves to negotiate and conclude by December 31, 2007, would be attached to the global Cotonou Agreement.

EPAs constitute the Trade Chapter of the Cotonou Agreement. EPA negotiations were formally launched on September 25, 2002 in Brussels. The parties agreed to two phases of negotiations namely Phase I; September 2002 - September 2003 - An ACP-wide negotiation and Phase II; September 2003 - December 2007 - negotiations between the EU with the six ACP Regions. The parties agreed to conclude negotiations and sign agreements by December 31, 2007 and implement the agreements from, January 1, 2008.

The Economic Partnership Agreements' (EPAs) main objectives are: eradication of poverty in the ACP countries, to stimulate sustainable economic development and finally to integrate ACP countries into the global economy.

Each country or region is competent to negotiate according to its own interest, taking due account of its specifications and level of economic development. This fact is underpinned by Article 37.5 of the Cotonou Agreement, which states,

"Negotiations of the economic partnership agreements will be undertaken with the ACP countries which consider themselves in a position to do so at the level they consider appropriate and in accordance with the procedures agreed by the ACP Group, taking into account the regional integration process within the ACP".

TOOL FOR DEVELOPMENT

There was a common understanding that the Cotonou Agreement's principles for the EPAs would guide the negotiations. The specific objectives mentioned by the ACP were: to accelerate export-led growth, prepare ACP adaptation to global changes and promote ACP trade. The Commission's view is that there is a need to build ACP markets and then build on these through the EPAs.

On the scope and content of EPAs, including Special and Differential Treatment (SDT), the ACP sees the SDT as indispensable and would like to fast-track ACP-EU discussions before the forthcoming DOHA round concludes with the view to mobilise the EU to ensure a common front in Cancun and together call for effective operationalisation of the special and differential treatment in the content of the WTO negotiations as a core principle and specifically in all the concerned areas of trade negotiations and the work programme under the DOHA Ministerial Declaration.

The EU argues that the ACP objective should be to reach a level where they would no longer need SDT and that erosion of special preferences are inevitable in a new global trading system. Further, they argue that in the area of many trade-related rules in particular, SDT meant extra costs and risks for traders and investment.

Both ACP and EU agree that the EPAs should be an instrument for economic developments.

ACP NEGOTIATION GUIDELINES

According to the ACP Guidelines for the negotiation of Economic Partnership Agreements (EPA) adopted by the ACP Council of Ministers on 26 June 2002 and approved by the 3rd Summit of Heads of State and Government held on 16 and 17 July 2002, the ACP Group has decided to adopt a two-phase approach to the negotiations:

Phase I, which will be conducted at "All-ACP" level, possibly extending over the period: September 2002 to September 2003 and resulting in an All-ACP-EU agreement based, essentially, on the principles and objectives of the EPAs as well as issues of common interest to all ACP States, including dispute settlement, safeguard measures, competition, investment, anti-dumping duties, and compensatory duties, with a view to achieving a common platform to serve as a basis for the negotiations of the second phase. In that regard, the ACP Group must envisage a strategy, including options, for getting the EU to accept an agreement on the issues above.

Phase II, which will be devoted to issues specific to ACP countries and regions, could begin in September 2003 and end in December 2007 at the latest.
The Group has decided to conduct the Phase I negotiations at two levels: Ministerial and Ambassadorial.

GEOGRAPHIC CONFIGURATION

According to the agreed modalities for the EPA negotiations, and article 37.5 of the Cotonou Agreement quoted above, the ACP countries are supposed to configure themselves as they so decide to begin the intensive regional negotiations with the EU. For two years now, the majority of the ACP regions, especially in Africa and particularly in the Eastern and Southern African regions, have been dealing with geographic configurations. To date three sub-regions seem to have taken a definitive position on their geographic configuration; Pacific, Caribbean and West Africa. Eastern Africa (COMESA), Southern Africa (SADC) and Central Africa (CMEC) are yet to finalise their choice of how they wish to configure themselves.

In the meantime, the AU Ministers of the Executive Council Second Ordinary Session meeting in N'Djamena, Chad, 3-6 March 2003 at the end of their discussions on the State of the ACP-EU, EPA and the WTO International Negotiations declared, "… the conclusions of the Economic Partnership Agreement (EPAs) should not undermine the Unity and Solidarity of Africa and the objective, principles and processes of the African Union and NEPAD;
… the Regional Economic Communities (RECs) are the building blocks of the African Union and should therefore serve as much as possible as the base for Africa's geographic configuration for the negotiations …"
UPDATE OF THE NEGOTIATIONS

Negotiations at ambassadorial level started in October 2002. Five meetings have taken place since then. They have allowed the parties to exchange views on issues pertaining both to the conduct and to the substance of the negotiations, thus improving each party's understanding of the other side's negotiating positions. In addition, the parties have agreed to hold restricted, dedicated sessions on technical questions in order to deepen the discussion thereon, and to identify areas of convergence and points of divergence.

Two dedicated sessions on legal issues have allowed an exchange of views on issues such as: principles and objectives of EPAs; definition of the parties to EPAs; the compatibility of EPAs with WTO rules; modalities for the entry into force of EPAs; the non-execution clause; dispute settlement procedures; as well as an all-ACP mechanism for monitoring the negotiations of the second phase.
The dedicated sessions on the development dimension of EPAs have focussed on how to ensure that EPAs can contribute to development and on the link between EPAs and development co-operation. A dedicated session was also held on market access, during which the basic principles underlying the discussions as well as the specific objectives they must achieve were underscored. It also allowed clarifications to be obtained on certain fundamental elements of EPAs such as product coverage, special and differential treatment, compatibility with WTO rules, asymmetry and differentiation.