EPA Update
By Melissa Julian, ECDPM
This is the longer, more detailed version of the TNI EPA Update in the July - August 2007 issue of Trade Negotiations Insights
Summary
*ACP-EU assess EPA negotiation process and vow to meet end-of-year deadline
*EU adopts EPA conclusions amid intense debate
*All- Africa EPA initiatives
*Central Africa (CEMAC)
*West Africa (ECOWAS)
*Southern Africa Development Community (SADC)
*Eastern and Southern Africa (ESA)
*Caribbean (CARIFORUM)
*Pacific
ACP-EU assess EPA negotiation process and vow to meet end-of-year deadline
The ACP-EU Council of Ministers meeting in Brussels on May 25 endorsed the formal and comprehensive review required under Article 37.4 of the Cotonou Agreement meant to ensure that no further time is needed for preparations or negotiations. ACP and EU ministers said that while the negotiations are behind schedule, they remained committed to completing the negotiations before the 31 December deadline, provided that mutually acceptable parallel progress is made in relation to market access, the text of the agreement and the accompanying measures, including development finance and EPA related adjustment costs.. The meeting was preceded by an ACP Council.
In the regional reviews – the basis for the overall joint review – the ACP voiced concern about capacity constraints to effectively negotiating and implementing the EPAs and areas of fundamental divergences with the EC in the negotiations and ability to conclude a development friendly EPA by the end of 2007 deadline. According to the conclusions of the ACP Council, irrespective of the outcome of the EPA negotiations, no ACP state should be left worse off and the EU should agree the necessary transitional measures to avoid any disruption of ACP exports to Europe beyond 2007.
In the press conference following the Council, current ACP President, Foreign Minister Mohlabi K. Tsekoa of Lesotho , said that ongoing negotiations were tough but that both sides had a strong interest in finding solutions.
"We have no doubt we will be enhancing the development of our people," Tsekoa said, rejecting suggestions that the tight timeframe risked forcing developing countries to agree unfavourable deals.
A series of ministerial stock-taking meetings are foreseen throughout July and September to ensure that EPA progress remains on track.
EU adopts EPA conclusions amid intense debate
Earlier, EU member states adopted a series of inter-related conclusions covering trade, development and aid issues during the General Affairs and External Relations Council (GAERC) in Brussels on 14-15 May which provide more details on what the EU will propose and accept in EPAs.
EPA conclusions were adopted after heated exchanges between member states which were unhappy that the EU Commission had offered ACP countries full duty-free and quota-free access without prior consultations.
The conclusions outline the EC's EPA market access offer, axing restrictions on all ACP products entering the EU from January 2007 except sugar, rice and possibly bananas - sensitive products which would only be included after certain transitional periods. Council also confirmed that this market access offer will not be extended to South Africa due to its higher level of competitiveness.
But many ACP officials were dismayed that controversy arose so early in the process and feared the backlash did not augur well for the EU's ability to deliver on its promises.
One suggestion during the Council that a 25 year transition period be incorporated into the text sparked intense debate and no mention of timeframes was included in the final text though there is a reference that in very exceptional cases, to allow even longer transition periods than the WTO norm for very sensitive products. It is generally believed that the ACP will request longer transitional periods for a wider range of products than the EU can accept.
The conclusions also state that the EU Member States support the EC position that EPAs should include trade in services, investment and other trade-related areas, through a flexible and phased approach.
The Council emphasised that the EU shall not pursue any particular market access interests. Many in the ACP say EU interests are, however, clear in the actual technical level negotiations.
During the Council, the EU reaffirmed its commitment to increase aid for the ACP regions as part of its future Aid for Trade strategy. They stressed that for funding to be effective it should be coordinated and go to strategies and needs prioritised by the ACP at country and regional levels. While they support regionally-owned initiatives as vehicles for delivering Aid for Trade, they do not support them being specifically tied to EPAs.
EU unveils Joint Africa Strategy Outline
On 15 May, the EU agreed an Outline for the Joint EU-Africa Strategy to be adopted at the Joint EU-Africa summit in December. The strategy should set out shared visions, objectives, approaches and specific strategies in key areas. In relation to Trade and Regional Integration, the aim is to improve economic governance and the investment climate; build technical infrastructure and productive capacities; support regional integration; support trade integration in Africa ; build technical and institutional capacity for negotiations in trade and related areas; promote market access of goods and services to the EU and in multilateral trade negotiations.
It is hoped that the Joint EU-Africa strategy, adopted by the Commission on June 27, will redefine relations between the two blocs to keep pace with globalization.
“The emergence of a genuine strategic partnership between our two continents is a priority for the EU. It will help us define joint answers to our common challenges and to Africa 's developments needs,” said EU Development Commissioner Louis Michel.
The Strategy is set to be adopted at the Joint EU-Africa summit in December. Portugal , which began its six-month EU Presidency on July 1, will host the summit in Lisbon . Portuguese Prime Minister Jose Socrates has put boosting relations between the two continents as one of his top priorities at the EU helm.
Meanwhile, African countries tackled the question of how to define sensitive and special products during a high-level meeting of ministers in Cotonou on May 3-4. Recommendations for sectors crucial to economic diversification, rural livelihoods and food security were drawn up and sent to individual governments.
The question of sensitive products was also raised during a retreat of African Ambassador s and trade negotiators in Brussels on June 2-3, where it was proposed that any list should include all products which benefit from subsidies or trade distorting support in the EU.
End of year deadline ‘possible'
Meanwhile, Michel told members of the African and European Parliament that sufficient political will exists to conclude the EPAs by the end of the year.
Speaking at the 13 th session of the ACP-EU Joint Parliamentary Assembly (JPA) in Wiesbaden, Germany, on June 26, Michel this added real value in terms of development.
“The effects of the EPAs are already being felt,” he said, claiming EU efforts were spread proportionally on both aid and trade.
Michel said the EU was ready to accept long, or very long transition periods for the opening of ACP markets while EU markets would be opened “in the most ambitious way and in a way that it has never formulated for any bilateral agreement.”
However, Nita Deerpalsing, a Member of Parliament from Mauritius raised concerns about the EU's approach to a zero-zero negotiating structure on abolishing export subsidies on farm products and said the Commission's plans to unilaterally denounce the provisions of the sugar protocol as “totally unacceptable”
Boyce Sebetela, Botswana, claimed the EU was sending mixed messages from the Council, the Commission and the Parliament which made reporting back to national governments difficult. Moreover, Sebetela called for ACP countries to be compensated for any financial loss resulting from the implementation of the EPAs.
The 28-29 June, the AU Executive Council adopted a decision expressing concern at the slow progress in the EPA Negotiations on the development aspects, such as additional resources for meeting adjustment costs and building and strengthening of the production and supply capacities. It calls on the EC to reflect in their negotiating positions the political commitment of the EU Member States to make EPAs instruments for development. It further urges the EU to consider putting in place transitional measures that will safeguard the continued entry of African exports to the EU market beyond December 2007, given the low likelihood of satisfactorily addressing all outstanding EPA issues as well as the impossibility of completing EPA ratification process by the end of 2007.
Following a series of technical expert and senior official meetings in May and June and after difficult negotiations in which CEMAC at one stage walked out due to their perception that the EU did not want to provide clarity on financing for reinforcing capacities, CEMAC and the Commission agreed the majority of a text on reinforcing capacities and upgrading economies, although failed to decide how this would be incorporated into the final EPA text.
Both sides agreed to establish a Regional EPA Fund, which CEMAC wants to channel existing and future EU EPA support funds – including money for basic infrastructure and human development and for new and specific financing to address new needs that will arise from implementation of EPAs. Moreover, CEMAC called for a compensation mechanism to be established which would redress the initial loss of customs revenue.
While the Commission agreed the Fund could be used to manage support from donors, it should be limited to financing plans to boost competition, diversify production, absorb the impact of fiscal reforms concerned by the EPA and implement EPA rules. Future discussion will focus on how to use contribution agreements as the basis for funding support to EPA implementation. The Commission will meet with the Central Africa Development Bank to analyse current procedures and identify means to encourage EU member states to provide additional funds. The issue of how to include these issues in the EPA text will have to be resolved at ministerial level.
Both sides held a first exchange of views on legal texts for agriculture, fisheries, consumer protection and labour standards, with most attention given to Sanitary and Phytosanitary (SPS) issues as well as harmonisation of national policies.
The Commission's draft offer on services and investment was presented. CEMAC is expected to present its own offer in September in the hope this chapter can be agreed by the end of October.
From 2010-2032, 75% of ACP products should be covered by the EU's market access offer and the remaining 25% excluded, according to Commission proposals on which products should be included and for how long. Tariff liberalisation would be put on ice for two years, with the process of dismantling tariffs lasting between 14 and 24 years for certain sensitive products.
But CEMAC indicated two years was not long enough and called for longer transitional periods. CEMAC said only around 60% of products needed to be covered given the number of LDCs and the need for the group to prepare for trade liberalisation.
National EPA committees continue to evaluate the EU's market access offer, with both sides keen to establish a Common External Tariff (CET). CEMAC wants to incorporate the Democratic Republic of Congo and Sao Tomé et Principe into the CET as soon as possible. A single starting line for trade liberalisation is not necessary on 1 January 2008 , but should be established fairly rapidly after that since tariff dismantlement schedules and transition periods begin on that date.
Negotiators continue to work on legal texts for customs and administration issues - including means to improve trade facilitation - with a view to agreeing the contents in September.
West Africa 's preparations for its market access proposal have been accelerated recently, in a bid to establish a Common External Tariff (CET) before the end of the year. Following technical level negotiations between ECOWAS, the EU Commission and the Regional Preparatory Task Force (RPTF) in June. West Africa 's consultations are continuing on their response to the EC's market access offer, but discussion provided greater clarity on the two sides' positions. West Africa reported on progress in preparations on its market access offer and gave a timetable for finalising a Common External Tariff this summer. This lays the basis for a full market access offer agreed with all ECOWAS members at the end of the summer. The next round of technical negotiations will take place at the end of July where the basic parameters of the market access offer can be discussed further in order to prepare for more detailed discussions when the Common External Tariff and West African proposals for sensitive products are finalised.
The EC outlined its revised “Cotonou Plus” proposals on rules of origin as the basis for negotiations on this issue. West Africa did not provide a response on this topic, which will also be discussed by the ACP at an all-ACP level meeting in July.
There were positive discussions on the draft EPA legal text presented previously by the EC and West Africa is working on its own EPA legal text proposal. The meeting also discussed services where both sides retain an interest in reaching agreement but West Africa remains concerned over how to manage their lack of negotiating capacity in this area. .
The market access offer to the EU was also the subject of the first meeting of the ECOWAS technical working group on upgrading production sectors and EPA accompanying programmes which met in May. Based on a draft report by the United Nations Industrial Development Organisation (UNIDO) on a programme for reinforcing productive capacities and increasing competitiveness and a study of member states' VAT liberalisation schemes, the group made progress on issues including product coverage and transitional periods as part of the overall EPA upgrading programme.
The results of these discussions will feed into work by the RPTF, which is currently working alongside UNIDO to boost the competitiveness of West African industries. Sources close to the meetings – which also addressed the fiscal impact of the EPAs and donor contributions for development - described the outcome as “positive.” However, many believe any real progress will be limited until ECOWAS and EU EPA commitments are clear.
ECOWAS agreed to launch a so-called Strategic Vision for the region, aimed at facilitating regional integration, during a Heads of Government meeting in June. It is hoped that the plan can be completed this year.
Southern Africa Development Community (SADC)
SADC and EC EPA technical experts and senior officials level negotiators met from 21-24 June and exchanged market access offers (on SADC side, for SACU only at this stage) and draft EPA texts (including a SADC Non-Paper on Rules of Origin and SADC EPA Draft Texts on SPS and TBT and an EC Draft Consolidated EPA Proposal). A joint session of the technical RPTF also took place.
The SACU market access offer includes South Africa and seeks to accommodate BLNS sensitivities arising from its SACU membership which because of the TDCA effectively means it has already started liberalizing its markets. SADC called for BLNS and MAT to receive DFQF on entry into force of the EPA, and that South Africa 's access be enhanced and move towards DFQF market access over a transitional period. Indications from the EC are that SACU offer is mostly a defensive one, that is there are very limited improvements in market access for EU products and a large number of withdrawals of TDCA preferential tariffs, which SACU would like to bring back to MFN level. While the EC is prepared to consider retrofitting the TDCA on a case by case basis to address specific and concrete BLNS needs, the SACU offer is too extensive and focussing too much on increasing border protection for the benefit of South Africa. The EC perception is that South Africa is hiding behind the BLNS to protect itself and win additional market access at no cost and this is causing a lack of trust and discomfort in the negotiations. Observes say that if the BLNS agree with the EC on a market access deal, that South Africa should not scupper a deal secure in the knowledge that its own market access will continue.
SADC called for a single SACU rules of origin regime to ensure that BLNS DFQF market access into the EU market. The EC said it could change the final market access offer in case the differentiated treatment vis-à-vis South Africa could not be implemented.
SADC will put forward a total of four market access offers: one from SACU, and one each from Angola , Mozambique and Tanzania . Although negotiations are tough – Angola is not a member of the SADC trade protocol and has indicated it might not sign an EPA, Mozambique shows little sign of joining SACU and Tanzania may defect to the ESA African EPA group - offers are expected to be tabled in September or October.
SADC reiterated that provisions on new generation trade issues should not include legally binding commitments subject to dispute settlement while recognizing the importance of establishing a favourable investment climate and calling for capacity building support for these issues. The EC noted the importance of the inclusion of investment, services, public procurement provisions, competition policy and intellectual property in the EPA. SADC indicated that due to the diverse interests amongst the group, further internal consultations were to be undertaken to develop a practical approach to services. South Africa and Namibia indicated that they were not prepared to enter into negotiations on services.
SADC shared aspects of work in progress on the structure of the EPA agreement.
The EC introduced proposals on development issues. SADC indicated that this area could only be agreed when all other chapters of the EPA are completed. Identification of EPA implementation assistance needs is ongoing. Inputs for the programming of the 10 th EDF (2008 – 2013) have to be provided by end of September 2007, an action plan to identify the assistance needs has been developed by the SADC RPTF. The EC confirmed that if the SADC EPA countries set up a development fund, financial resources can in principle be channelled via this instrument.
SADC and EC technical level negotiators met in May. The EC presented a draft detailed EPA text to serve as a baseline for negotiations. It has also presented the framework for its market access offers in services. According to draft paper put forward by the Commission in May, TRIs - which in the Cotonou context include services, competition, intellectual property, investment, environment and labour – are at the core of the regional integration and development dimension and should be included in the final deal.
This proposal was met with stiff opposition from some members of SADC, which had requested cooperation with the Commission on TRIs but shied away from binding commitments which could be subject to dispute settlements. They argued that SADC states have no common policy to guide negotiations on TRIs, nor the rules and regulations in place to implement the outcome.
Nevertheless, the majority of SADC member states – except Namibia and South Africa (who are in agreement with respect to services negotiations but not all TRIs)– signalled a willingness to negotiate binding commitments on TRIs in the EPAs to the Commission, mostly in a bid to advance talks in lieu of the looming deadline.
Much of the tension between these opposing views stems from the need to accommodate South Africa 's EPA wishes. Viewed as the economic and political driving force of the group, South Africa's desire for a deal by the end of the year is less sweeping, given that it already has a Free Trade Agreement with the EU and South Africa is the only SADC Member State with a developed domestic services market with important regional ramifications and where EU business have the most commercial interest and, therefore, the country with the highest stakes and need to be well prepared for negotiations in this area. The EC says South Africa is the best equipped to do so . South Africa is also negotiating services within the WTO framework and makes a direct link between this and the EPA negotiations.
Yet South Africa claims the Commission is hamming up these regional tensions in a bid to secure its own TRI demands. The EC maintains that the EPA must take account of the needs of all SADC members and indicates that the biggest challenge, influencing the whole of the negotiations, is agreeing on the principle and content of a specific offer for South Africa's exports to and imports from the EU within the EPA since presently a single harmonized regime is not possible. Differentiating South Africa 's treatment in the EPA will remain an enormous challenge. SADC must decide whether a single trade regime is more important than improving market access to the EU.
Eastern and Southern Africa (ESA)
ESA-EC technical and ambassadorial level negotiations were held in June which made some progress in bridging positions in key EPA areas though much work remains to be done. Discussions focussed on market access and development issues. ESA informed the EC that it maintains that development should be reflected in sector specific chapters (agriculture, fisheries and others) of an EPA and also in a separate chapter on development cooperation. The development matrix defining the accompanying development measures, mechanisms and modalities for implementation should be annexed as an integral part of the EPA with legal standing as a way to operationalise the development cooperation chapter. Both sides agreed that the joint development matrix listing accompanying measures which ESA wants to have financed and mechanisms for implementation, is a useful instrument for programming resources for supporting the implementation of EPA, but negotiations must continue to further prioritise areas of cooperation and specific actions for each sector and on reach agreement on whether and how to include legally binding reference or incorporate to the matrix in the EPA text and indeed also on the precise wording of development language in relation to commitments in development support and additional resources.
Both sides link the level of ambitions in the EPA with the development support that will be provide for implementing EPA and emphasise the need to jointly mobilise additional resources from EU Member States and other donors to address EPA requirements.
The modalities of a Regional EPA Fund will be elaborated to channel EPA related resources. ESA also maintained its call for the use of a regionally owned EPA development support instrument, i.e. support provided via the COMESA Fund through a contribution agreement.
In relation to market access, ESA presented a single offer based on the Common External Tariff (CET), with a 25 years transitional period as the starting point for the move from existing tariff to CET, then period of transition, and a common regional list of sensitive products with some exceptions. Initial sensitive products and exclusions lists, provided by each country, are long and increasing (up to 60%), but are still being revised. This is causing tensions within the region with LDCs (12 of the 16 ESA Member States), already with full market access to the EU, wanting clarity on what additional financial support they will receive in return for providing reciprocity to the EU when they are not obliged to do this under EBA terms. Complicating matters further are indications that Rwanda , Burundi , Uganda and Kenya may form an East African Community (EAC) EPA configuration within the ESA configuration. The EC questioned if this and the extensive list of sensitive products that ESA is proposing will be WTO compatible. They agreed to seek further clarity on what could be WTO compatible.
ESA generally welcomed the EC market access offer but sought clarity on its implications for LDCs market access and development support and Mauritius ' sugar protocol. This is also a very contentious issue within ESA.
Negotiators agreed to negotiate “Cotonou Plus” rules of origin which can be revised if necessary in future based on work being carried out on both sides on this issue.
There were discussions and negotiations will have to continue on how to incorporate safeguards, SPS and trade facilitation provisions and capacity building support for these in the final EPA agreement.
With regard to agriculture, ESA presented additional criteria such as food and livelihood security and rural development necessary to use when analysing the development dimension and market access commitments in particular the list of sensitive products.. The EC took note of ESA's views. Both sides agreed on the need to look into how to strengthen processing; marketing, distribution and transport within ESA.
ESA called for negotiations on how to address the negative effects of preference erosion ensuing from both the multilateral and EU's bilateral liberalisation processes and called for appropriate measures to redress the effects of preference to be explored.
On export subsidies, ESA rejected the EC proposal for the elimination of export subsidies on condition that ESA eliminates its tariffs on the concerned products.
ESA informed that its domestic agriculture products competitiveness and access to foreign markets is negatively effected by domestic support to EU agriculture producers and that, therefore, countervailing duties may be necessary to address this effect. The EC maintains this is not an issue for EPAs, but rather the WTO.
Further progress was made on the joint chapter on fisheries . The EC is prepared to provide support to improve the competitiveness of this sector.
With regard to Services and Trade related issues, ESA informed the EC that it is preparing its text on services and the two sides agreed to discuss trade related issues further at a technical level.
Difficult discussions within the region continued in April and May with a view to reaching a political agreement on the region's approach to tariff liberalisation issues in the EPA negotiations. An informal meeting of Chief negotiators in May, however, allowed for discussions on the key areas of continuing divergence of views in the negotiations including the approach to tariff liberalisation and also the nature of parties to the agreement (individual Member States or as a region), binding commitments on EC development cooperation and good governance on taxation issues.
Full negotiations resumed in June with the full slate of Technical Negotiating Groups (TNGs), ,i.e. on trade related issues, market access, services and investment and legal issues met to continue negotiations in these areas. There was also a meeting of the Regional Preparatory Task Force (RPTF).
In the market access TNG, the Caribbean indicated its readiness to accept applied rates as the base rates for tariff liberalisation and re-confirmed its intention to propose a single CARIFORUM sensitive products exclusion list and individual national tariff liberalisation offers to commence upon entry into force of the EPA. The EC maintains its call for a Single Tariff Schedule as a way to strengthen regional integration and ensure EPA negotiations can be completed within the year end deadline so that market access can be maintained and improved. There was also discussion on Caribbean concerns in relation to the EC market access offer, particularly in relation to sugar, rice and bananas.
The EC proposed to negotiate ‘Cotonou-plus' rules of origin based on improvements and relaxation of the existing Cotonou rules. A detailed proposal will be tabled to the next meeting. The EC also proposed that the EPA include a revision clause so that the rules can be revised when the full EU internal revision of its rules of origin is completed. The Caribbean is unlikely to accept such a clause if it pre-judges what the outcome of an EPA rules of origin review could be. The Caribbean has tabled a draft ROO Protocol that in the absence of any EC counterproposal should serve as the basis on which negotiations should proceed.
There were also discussions in the market access TNG on the Caribbean proposal to make market access and trade facilitation commitments conditional on the provision of additional development finance support to fund EPA related adjustment or restructuring and that legal provisions to that effect to ensure a binding commitment on the EU to provide assistance should be included in the EPA. The Caribbean also maintains its call for inclusion of a non-execution clause which would allow suspension of Caribbean commitments if EU support was not forthcoming and, therefore, ensure proper sequencing of capacity building, regional integration and trade liberalisation. The Caribbean also calls for a rendez vous clause for continued EU support beyond 2020. The EC continues to maintain the EPA support should remain within the Cotonou Agreement's framework.
The market access TNG also reached some agreement on anti-dumping and countervailing measures, but some divergence remains on texts in relation to Caribbean calls for no simultaneous imposition or application in the European Community of multiple anti-dumping or countervailing measures covering the same products from the same signatory CARIFORUM State .
The TNG on legal issues continued consideration of the legal and institutional aspects of the EPA. Divergence continues on the scope of development cooperation and the Caribbean 's call for the EPA to include commitments by the individual EU Member States with respect to the provision of development financial assistance. The EC indicated it may propose additional language to try to address this issue.
There were also discussions aimed at finding appropriate wording as to the signatories of the EPA and implications for them of any eventual sanctions that may be applied. There was also discussion on institutional mechanisms with the EC questioning the need for a development committee and the Caribbean maintaining this is essential to ensuring EPAs deliver on their development objectives.
The RPTF discussed progress in its work in conducting needs assessments, designing programmes to address these and drafting financing proposals to quantify the costs of interventions in each subject specific discipline (trade, SPS, TBT, etc, a total of 15 areas). A trade-related technical assistance package will emerge from this work to provide for development assistance for the implementation of EPAs. The intention is to present a package of support to the October EU General Affairs Council. The Caribbean maintains that only when funding for visible package of development support is signed will they sign an EPA.
While difficult issues remain, CARIFORUM and EC negotiators are determined to complete negotiations later this year. Significant progress continues to be made as can be evinced from near completed text is a host of disciplines. Issues of tariff liberalisation, nature of the parties and binding commitments on EU development cooperation remain outstanding.
Pacific ACP Trade Ministers, National Authorising Officers and the Regional Authorising Officer met in May and adopted a “Red Lines” paper which sets out the minimum requirements for an EPA with the EU. The paper covers offensive and defensive interest in EPA negotiations in trade in goods, trade in services, fisheries and in investment and related financial instruments.
The Pacific calls for Duty Free and Quota Free (DFQF) market access to be provided to all Pacific exports from the entry into force of the EPA. just as important, and for that market access to be beneficial, it must be accompanied by improved Rules of Origin that recognise the smallness and isolation of the Pacific Member States in setting the criteria for originating status of manufactured or processed goods, and provide Pacific producers with effective options for sourcing inputs from least-cost suppliers.
The paper also calls for a sufficient transition period to be built into the EPA to enable the Pacific to prepare and implement the new trade arrangements under the EPA.
On trade in services, the Pacific calls for the EPAs to provide meaningful market access in the area of temporary movement of natural persons.
Any EPA agreed with the EU must ensure that no Pacific country is made worse off under the EPA than under existing bilateral fisheries access agreements and must address the region's primary interests in the sector, including significantly improved rules of origin for pacific fish exports to the EU.
They further call for an investment chapter that contains binding provisions that would guarantee post-establishment treatment to approved investors as well as EU commitments against corruption and derogation from environmental and labour standards.
Finally, the Pacific calls for the EC to provide legally-binding, additional financial resources to cover the cost of EPA adjustment and capacity building to implement the EPA and to reform the methods of implementation of financial instruments to ensure that the assistance these institutions deliver is efficient, effective and responsive to the unique needs and circumstances of small and medium scale enterprises. It says it is also essential for the region to establish a regionally-owned adjustment facility to channel resources for financing EPA-related costs in an efficient, transparent and timely manner.
Ministers also requested a Way Forward to be identified to fast-track the EPA process so as to meet the looming deadline to conclude the negotiations, but expressed concerned by the amount of work still to do agreed.
Ministers agreed to submit a formal request to the EC in order to clarify how the EU intends to fulfil its commitment under Article 37(6) of the Cotonou Agreement in the light of the EC's acknowledgement that several Pacific countries will not at this point, participate in the trade in goods component of the EPA with the EU. They also agreed to request the EC clarify how it intends to preserve the Cotonou acquis under Article 37(7) for those LDCs not becoming a party to an FTA with the EU.
The joint meeting also considered an issues paper on the EPA adjustment facility and stressed the need to ensure that both national and regional requirements are addressed and the importance of adequate funding and an effective joint monitoring mechanism to support the operation of the Facility.
Pacific and EC technical negotiators met in June. The EC presented its Cotonou Plus Rules of Origin idea (see other sections above) and indicated their understanding of Pacific concerns and indicating that compromises could be likely reached to accommodate these. The EC also informed that they intend to amend the Everything But Arms (EBA) and Generalised System of Preferences (GSP) rules of origin next year. The Pacific negotiators expressed grave reservations that what the EC side was proposing at this late stage would not address fundamental regional concerns regarding rules of origin and result in the region's manufactured products being unable to qualify for DFQF access under the EPA and compete in the EU market.
There were long and detailed discussions on services. The EC expressed the view that what the Pacific was proposing went beyond Mode IV. The EC is discussing with its Members States to try to accommodate Pacific concerns. The EC noted the proposal it has made on migration in third countries (see section above).
A discussion was held with the EC's DG fisheries which put a text on the table which includes some of the Pacific's proposal on this issue and indicated their willingness to discuss this issue further.
The meeting agreed to establish a Regional Preparatory Task Force (RPTF) to connect trade and development financing.
Isikeli Mataitoga resigned from the position of lead spokesperson for Pacific EPAs. He has taken up a position as a Judge in the Fiji judiciary.
Australia has indicated that it will seek the same trade rights as the EU obtain in EPAs in the Pacific.