Economic Partnerships Brussels, 14 May 2012
EU’s first Economic Partnership Agreement with an African region goes live
The trade and development agreement concluded by the EU and four Eastern and Southern African states Mauritius, Madagascar, Seychelles and Zimbabwe will take effect today.
EU Trade Commissioner Karel De Gucht said: "Today, our first interim Economic Partnership Agreement with an African region is applied. This is excellent news and I salute the hard work of negotiators and colleagues on all sides. With this trade deal we hope to accompany the development of our partners in Eastern and Southern Africa and open up better and lasting business opportunities."
The interim Economic Partnership Agreement provides duty and quota free access to the EU market for exports from Mauritius, Madagascar, Seychelles and Zimbabwe. These countries will gradually open their markets to European exports over the course of 15 years, with exceptions for certain products the countries consider sensitive. Furthermore, the Agreement covers provisions on rules of origin, development cooperation, fisheries, trade defence instruments and dispute settlement. It is therefore an improvement for Mauritius, Madagascar, Seychelles and Zimbabwe on the unilateral duty and quota free regime they enjoyed so far because it encourages regional integration and strengthens a partnership approach with the EU. Regional integration brings economic and political benefits that individual countries cannot achieve alone.
At the end of 2007, Comoros, Madagascar, Mauritius, Seychelles, Zambia and Zimbabwe concluded an interim Economic Partnership Agreement (EPA) with the EU. Four countries (Madagascar, Mauritius, Seychelles and Zimbabwe) went ahead and signed it in August 2009 in Mauritius. These four countries have now taken and completed steps towards ratification or notified application, so that the agreement can be applied as of today. Once all parties ratify, including all EU Member States, the Agreement will officially enter into force.
In 2000, under the Cotonou Agreement, African, Caribbean and Pacific (ACP) countries and the EU opted for a more ambitious trade and development relationship covering not just trade in goods, but also services, trade-related rules and development co-operation. Strengthening regional integration and creating more efficient regional markets with predictable and stable rules are cornerstones of this approach. These new agreements would be underpinned by EU development co-operation to reinforce ACP institutional and productive capacities and support necessary adjustment processes.
Negotiations for such comprehensive trade and development agreements as set out in the Cotonou Agreement started in 2002; however, it became clear towards the end of 2007 that it would not be possible in all ACP regions to finalise negotiations before the end of Cotonou trade regime on 31 December 2007.
A series of Interim Agreements were therefore concluded to minimise any possible trade disruption for ACP partners arising from the expiry of the Cotonou trade regime while maintaining progress towards comprehensive regional EPAs. While the interim Agreement went through the domestic approval process, the countries retained duty and quota free access to the EU.
Hence, the interim Economic Partnership Agreement Madagascar, Mauritius, Seychelles and Zimbabwe has to be seen as a stepping stone to a wider and more comprehensive deal currently under negotiation between the EU and the whole Eastern and Southern African region. Negotiations for a comprehensive EPA resumed at the beginning of 2008 with all countries of Eastern and Southern Africa, including those which did not join the interim EPA (Comoros, Djibouti, Ethiopia, Eritrea, Malawi, Sudan and Zambia). The shared objective in these negotiations is to conclude an agreement at regional level, which supports sustainable development and fosters regional integration. The areas potentially covered by the full EPA go beyond trade in goods to include services and investment, and trade-related areas such as sustainable development, competition and trade facilitation.
In 2011, total EU imports from the four Eastern and Southern African (ESA) countries amounted to about €2 billion. The main imports were processed tuna, coffee, cane sugar, textiles, tobacco, cut flowers and metals. In the same year, EU exports to the four ESA countries amounted to €1.7 billion and comprised mainly machinery, vehicles, pharmaceutical products and chemicals.
EPA negotiations with other ACP regions
EPA negotiations with other African regions have intensified over the last year. Recently, progress has been made at technical level with the East African Community and West Africa. If sufficient political will and commitment can be mustered, there are real prospects for concluding the deals during 2012 in many African regions. In the Caribbean and the Pacific regions, the EU and its partners in the Cariforum and Papua New Guinea are focusing on the implementation of their existing agreements that are provisionally applied since 29 December 2008 and 20 December 2009 respectively.