EPA Negotiations: Where do we stand? - All ACP level - State of Play - Recent developments - Additional resources	Click here for a complete summary of the state of play in all regions (in pdf format)

State of EPA negotiations as of 1 January 2008

The Caribbean is the only region that initialled a full EPA with the EU by 31 December 2007, the date of expiry of the waiver covering the Cotonou trade preferences. In order to establish a new WTO compatible trade regime from 1 January 2008, most African non-LDCs (except for Nigeria , Republic of the Congo , Gabon and South Africa ) and two Pacific non-LDCs have concluded interim agreements with the EU. In total, 35 ACP countries initialled either a full or an interim agreement by the end of 2007.

Countries that have neither initialled an agreement nor have access to the EBA regime are expected to export to the EU under the GSP regime. As of 20 December 2007, these are Nigeria, Republic of the Congo, Gabon, as well as the Pacific countries Cook Islands, Federated States of Micronesia, Nauru, Niue, Palau, Marshall Islands and Tonga. However, the EC may have to face political pressure if it applies the GSP regime to non-LDCs from 1 January 2008, which will imply raising tariffs.

South Africa will export under the TDCA.

The remaining ACP countries have either initialled an interim agreement or will export to the EU under the EBA regime available to LDCs.

[For an overview, see ACP Market Access outlook 1 January 2008 , European Commission, 20 December 2007 .]

Next steps

After the CARIFORUM-EU EPA and several interim agreements have been initialled in late 2007, the agreements will need to be signed and ratified to enter into force.

[ However, the agreements are expected to be applied provisionally by both parties before ratification, as the texts include provisions in this respect. In addition, before provisional application, parties can unilaterally take steps to apply the agreements. For instance, the EU has been granting duty and quota free market access (with exceptions for sugar and rice) to ACP countries that initialled agreements since 1 January 2008 . ]

On the EU side, Council decisions will be needed to authorise the signature of initialled agreements. Assent of the European Parliament will be required for full EPAs and possibly for interim agreements, depending on whether a further analysis of the content of the interim agreements concludes that parliamentary assent is needed for the areas covered.
Legal procedures to be followed on the ACP side depend on the political system in each country and region.

Negotiations towards full EPAs are planned to be continued in 2008 and are expected to comprise areas not covered by the interim agreements such as trade in services and trade related issues (e.g. investment, competition, government procurement, trade facilitation and intellectual property rights, environment and social aspects). Different views have been expressed as to whether it will be possible to renegotiate provisions agreed in interim agreements

Further, the agreements will have to be notified to the WTO to comply with multilateral trade rules.

Agreements concluded by region

A brief look at each of the six negotiation regions gives a more detailed picture of the current state of play - see also our regional web pages:

•  In the Pacific , Papua New Guinea and Fiji have concluded interim agreements on 29 November 2007 . Although other PACP countries' exports to the EU are very low in absolute value, this can be significant relative to their overall country exports and thus they may face serious disruption of trade.

•  In East and Southern Africa ( ESA ), the East African Community (EAC) members ( Burundi , Kenya , Rwanda , Tanzania and Uganda ) have decided in November 2007 to form a separate EPA region and initialled an interim agreement on 27 November 2007 . The remaining ESA countries have opted for a framework agreement with a common text but separate market access schedules. The ESA -EC interim agreement has so far been initialled by the Seychelles and Zimbabwe , on 28 November, Mauritius on 4 December, Comoros and Madagascar on 11 December 2007 . Zamiba initialled the agreement but has not submitted a market access schedule; hence it will export to the EU under EBA from 1 January 2008 .

•  In the SADC EPA region, an interim agreement has been initialled by Botswana , Lesotho , Swaziland and Mozambique on 23 November 2007 . Namibia initialled on 11 December 2007 . South Africa , despite forming the customs union SACU with Botswana , Namibia , Lesotho and Swaziland , is not taking part in the interim agreement so far. Without joining the agreement, South Africa exports to the EU under its TDCA agreement with the EU.

•  In Central Africa , no regional interim agreement exists. The non-LDC Cameroon initialled an interim agreement with the EC on 17 December 2007 . The other non-LDCs in the region, Gabon and the Republic of the Congo, have not concluded an interim agreement so far, but might do so in 2008.

•  Similarly the West African region has indicated that it is not interested in concluding an interim agreement but estimates that another 12 -18 months of negotiation time are needed to reach a full EPA. Côte d'Ivoire and Ghana initialled interim agreements with the EC on 7 December and 13 December 2007 respectively. Nigeria , being the third non-LDC in the region, is unlikely to conclude such an agreement and has asked to be included in the GSP+ scheme instead. Cape Verde , which graduated from LDC status on 1 January 2008 , will be able to export under the EBA regime for a transitional period of three years.

•  In the Caribbean, a full regional EPA was initialled on 16 December 2007 .

[For an overview by the European Commission, see Update: Interim Economic Partnership Agreements , EC, 19 December 2007]

Table 1 gives an impression of the liberalisation commitment contained in initialled agreements and table 2 provides an overview of sensitive products excluded from liberalisation.

Table 1a: Liberalisation schedules agreed in initialled interim agreements (cumulative value of imports from the EU, to be liberalised by the specified year )

Table 1b: Liberalisation schedules agreed in initialled interim agreements (cumulative percentage of tariff lines, to be liberalised by the specified year )

a cumulative percentage of tariff lines
b additional number of tariff lines to be liberalised by the specified year

Table 2: Goods excluded from liberalisation

(Table 2 quoted from: Update: Interim Economic Partnership Agreements, European Commission, 13 December 2007, http://trade.ec.europa.eu/doclib/docs/2007/november/tradoc_136959.12.07.pdf and EPA Flash News, European Commission, 19 and 20 December 2007)

Background

Interim solutions in light of the expiry of the WTO waiver

While all parties remain committed to concluding comprehensive EPAs, as confirmed in the joint review endorsed in May 2007, progress in the negotiations has been slower than expected. By October 2007, it became apparent that EPAs would not be concluded by the target date of 31 December 2007, set by the expiry of the WTO waiver covering the current preferential trade regime of Cotonou .

In reaction to this, the European Commission issued a communication on 23 October 2007 , which outlines a pragmatic approach to safeguard preferential market access for non-LDC countries from 1 January 2008. [After expiry of the WTO waiver covering the current preferential trade regime under the Cotonou Agreement, LDCs will have the possibility to export to the EC market duty and quota free under the Everything But Arms (EBA) initiative. For non-LDCs, the Generalised System of Preferences will apply, which implies significantly higher tariffs on a number of products compared to the Cotonou regime.]
The communication aims at concluding WTO-compatible goods market access arrangements to be in order to extend the negotiation time towards complete EPAs while avoiding a disruption in trade. In line with this approach, a number of interim agreements have been concluded over the last weeks of 2007 between the EU and ACP regions, subregions and individual countries. Trade in goods is the only key area that needs to be covered by an agreement to comply with WTO rules. Other areas, on which agreement has been found, are included in most interim agreements. The interim agreements contain rendezvous clauses to continue negotiations in 2008 towards full EPAs.
This solution circumvents a loss of trade preferences while fully respecting the letter of WTO rules. However, concluding EPAs with sub-regions or individual countries is likely to have serious implications on regional integration dynamics in the ACP.

From 1 January 2008 , those ACP countries that have neither concluded a full EPA nor an interim agreement export to the EU under the Everything But Arms (EBA) initiative (which applies to LDCs) or under the standard Generalised System of Preferences (GSP) (which applies to non-LDCs).
[For details on the Generalised System of Preferences of the EU, comprising the general GSP, GSP+ and EBA, see http://ec.europa.eu/trade/issues/global/gsp/index_en.htm ]

Development support for EPAs and Aid for Trade

As a consequence of EPAs, ACP countries are likely to face losses in public revenue through reduced tariff revenues. Further, while liberalising trade with the EC and regional partners, ACP countries will face adjustment costs due to restructuring of their economies and they will require support of their productive capacities in order to take full advantage of new export opportunities.

The EC will continue to provide development assistance under the European Development Fund (EDF) as well as under special assistance programs in the area of sensitive products such as bananas, sugar and rice funded from the EU budget. ACP countries stress the need to ensure additional funding for EPA support complementary to the EDF, in order to avoid diverting funds from other development areas to trade related projects.

On Trade Related Assistance (defined as support for trade policy and regulation and for trade development), the EU has made a firm commitment to increase its funding to €2 billion per year by 2010. Out of these, €1 billion is to be contributed by the EC and another €1 billion is to be delivered by EU member states. The EU General Affairs and External Relations Council (GAERC) meeting on 15-16 October 2007 endorsed the EU Strategy on Aid for Trade , which states that "in the range of 50% of the increase" in EU TRA will be available for ACP countries. This implied that about €300 to 400 million additional funds per year can be expected for Trade Related Assistance in ACP countries. Further, the EU will provide support in the framework of the wider Aid for Trade agenda, covering also building of productive capacities, trade-related infrastructure and trade-related adjustment. However, no precise quantitative commitments exist on this.

Click here for recent developments at the All ACP level.

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