September 19, 2006, Business Post
Economic Partnership agreements (EPAs) will be good for developing countries in the long run, the European Commission in Zambia assured, but civil society organizations says this may not be the case unless poor countries increase their negotiating capacity.
With fears surrounding EPAs abound, the local civil society movement has called for strengthening of Zambia’s negotiating capacity to adequately deal with he fears.
Zambia is currently negotiating an EPA with the EU as port of the Eastern and Southern Africa (ESA) configuration, with the COMESA Secretariat having been mandated by ESA states to coordinate the regions negotiations. The ESA group agreed to break down the EPA negotiations into six clusters of development issues; market access; agriculture; fisheries trade in services; and trade related areas.
At a recent consultative workshop on EPAs organised by Civil Society Trade Network of Zambia (CSTNZ) and the Consumer Unity and Trust Society- Africa Resource Centre (CUTS-ARC) it was agreed that despite several fears. EPAs are anticipated to serve as a key element for increased trade between Europe and Africa.
CUTS-ARC researcher Vladmir Chilinya said Zambia, being party to the EPA negotiation is expected to benefit from increased exports and welfare due to lower imported prices.
He, however, said the proposed trade liberalization under EPAs has been criticized as not being suitable for reducing poverty in Zambia.
“In addition to revenue loss nost industries in Zambia are still in the infant stage, therefore not able to complete with European products. This will result into unbalanced gains; however government was urged to adequately consult with various stakeholders in different parts of the country,” Chiliniya.
Chiliniya said concerns were raised over the continued the lack of negotiating capacity to effectively which negatively affects Zambia’s negotiating ability.
“It was therefore recommended that government negotiating tam be strengthened and widened to include multi-representation from various stakeholders,” said Chiliniya.
But Francesca Di Mauro, head of Economic and Trade-related Cooperation at the Delegation of European Commission in Zambia, allayed fears regarding EPAs.
She said the flooding of EU products that was being feared would only take place in African countries had to open up the borders to the EU as of January 1, 2008.
“This is not the case, only the EU will have to offer zero rates on most products on that date, while the ACPs will benefit from long transition periods. This means that ACPs will and can keep their protection for many years in a number of sectors, including for the ‘infants’ sectors, sensitive products, and they can also use safeguards provision as needed”.
She said trade liberlisation would be a gradual approach with ACPs first opening among themselves, and then eventually with the EU.
“In the long-term, we should not forget that lower prices for imported goods be they from neighbouring countries or from the EU, are beneficial for consumers, but also for producers who need to import equipment and machinery to develop their domestic industries,” she said.
Di Mauro stressed that liberalisation is a process that highlights which sectors are competitive in the world markets, with a growing potential.
She said, in the process, other sectors would find themselves less competitive and would have to restructure.
“In this process of reallocation of resources it will be important that governments foresee social safety nets to minimise the impact on the most affected sectors, until the labour force slowly moves into the growing exporting sectors,” she advised.
New fears have emerged regarding EPAs that they may be negotiated outside the WTO domain as multilateral negotiations are protracted.
Lillian Bwalya, an external trade economist in the Ministry of Commerce, Trade and Industry, said the continuous shifting of WTO deadlines could cause serious implications with regard to assimilating WTO agreements into EPAs.
“The danger is that we will end up negotiating issues that we will not have agreed upon at the multilateral level,” Bwalya said at a recent post Honk-Kong national workshop on WTO.
Bwalya said the outcomes of EPAs would only be best if they resonated with what is agreed on the multilateral level, which currently seems unlikely.
African countries and the EU have up to December 2007 to conclude EPAs but it seems unlikely that speedy movement will made on the part of the WTO to conclude the current Doha Round to douse these fears.
The Doha Round of WTO talks was suspended in July after some five years of negotiations , as major countries left the negotiating table after failing to reach a common agreement. It is not clear when they will resume.
If WTO talks had been completed on their initial deadline of end-2004, African countries would have had three years on hand to assimilate some of the multilateral trade agreements into EPAs negotiations.
“The WTO timeline keeps shifting but the EPA deadline still stands and wwe are found grappling with how we can synchronise the two,” Bwalya said.
But Di Mauro said these fears were “unfounded”.She said EPAs would be within globally acceptable rules.
Di Mauro said previous special preferential treatments granted by the EU to African, Caribbean, Pacific (ACP) states was done on a waiver basis from WTO members. As normally preferences should be the same for all developing countries and not just the ACPs.
Di Mauro said the waiver was granted at a high cost in terms of concessions within the WTO and that during the negotiations of the Cotonou Agreement in 2000, both the ACPs and the EC had agreed together to go rather for a fully WTO-compatible EPA agreement..
“The compatibility derives from the fact that EPAs will, in the long-term, be a reciprocal agreement. That is, a Free Trade Area between the EU and the ACPs. However since the WTO requires that ‘substantially all’ trade between the EU and the ACPs is liberalised, this leaves some room for the ACPs to protect certain priority sensitive sectors, or invoking safeguard measures if necessary, hence allowing some asymmetry in the Agreements,” Di Mauro said.
Di Mauro saif there are many Regional Trade Agreements in the world that are negotiated bilaterally and outside the multilateral arena.