A number of papers were also presented i.e. on Regional integration (the EC tool box), on Rules of Origin, Adjustment facility, Infrastructure Fund, Intellectual Property as a development tool, funding arrangements, on WTO compatibility; and a presentation by Egypt on how they negotiated their FTA with the EU.

This paper gives an overview and insights into the discussions that took place. The official report of the meeting will be forwarded as soon as I get it. I will give some suggestions on how CSOs can best influence this process.

Level of preparedness:

Although substantive negotiations began in September 2004, the 3rd RNF meeting indicated that the ESA region is far from ready to negotiate with the EU. It was agreed by the ESA members that Impact Assessment Studies (IAS) would be done before negotiations began to guide the negotiations. So far only 5 IAS have been completed but the findings of these studies have not been synthesized to guide the negotiations. There is no indication so far of what the studies came up with and how this will/ has altered the way the ESA countries will negotiate. It is only Mauritius, which pointed out that their studies indicated that Mauritius will lose revenue up to 1.1 billion Rupees, if it partially opens up to the EU; and 1.6 billion Rupees if it is a full EPA. The Mauritius delegation urged other members that the first step in the negotiations should be to ensure that the EU makes a firm commitment to address issues of building the competitiveness of the ESA economies. They further pointed out that unless this is done, then the EPA will not lead to development as anticipated but to increased poverty. A representative from the UNECA also emphasized this point that it will be the poor to carry this additional burden.

A number of ESA countries are still awaiting funds from the EU to undertake the studies. As regards the NDTPF, which are supposed to come up with national positions, a number of member countries are still looking for funding to undertake activities.

Despite this lack of readiness, at the 1st meeting of the ESA- EC Regional Preparatory Task force held in Brussels on the 27th July 2004, the ESA Group “presented their proposal to discuss the following negotiating issues from July 2004 –March 2005: Fisheries, development issues and market access. Yet the minutes of the meeting of the ESA ambassadors and EC senior officials which sat on the 30th July 2004 in Brussels agreed that the ESA-EU EPA negotiating process would address issues of: fisheries, market access, development and agriculture. This lack of coherence raises a number of issues:

1. The overlapping structures and lack of coordination: In the 2nd RNF meeting in Entebbe, it was proposed that the ESA Group could begin to formulate negotiating positions in ‘those clusters, such as fisheries, where the Group has made some progress. Other clusters may include Development, Rules of Origin, and Sanitary and pytosanitary (SPS) measures. This was a proposal, no agreement was reached. Yet in the 1st meetings of the RPTF and ESA-EC officials, other areas were being proposed. The RPTF has been controversial in the negotiating structure. It is supposed to be composed of the Chief Technical Advisor (who has not yet been appointed) supported by officials from the embassies whose ambassadors have been nominated as lead Spokespersons, a representative of the ACP secretariat and technical experts who are to be selected by the RNF on the side of the ESA Group; On the side of the EC the members are composed of representatives from the Directorate of Trade. The main objectives (among others) of this body is to “ prepare for the meetings of the Lead ambassadors and the EC senior officials, including preparations of a schedule of meetings, agreeing on locations and preparing agendas” It should be noted that negotiations at a technical level are supposed to be carried out by the Lead ambassadors and the EC senior officials, yet their agenda is determined by an informal body (RPTF). The other very interesting objective of the RPTF is to “exchange information on issues pertaining to the negotiations with an informal exchange of views on negotiating positions so that areas of divergence and convergence are known to both sides enabling each side to be able to prepare for meaningful negotiations at the Ambassadorial/Senior officials and Ministerial/Commissioner levels.” A number of ESA delegates in both the 1st RNF (Mombasa) and 2nd RNF (Entebbe) meetings questioned the efficacy of this body. But since it was the decision of the ESA ministers of Trade taken in Mauritius in Feb. 2004, the RNF has no powers to remove it from the negotiating structure. In an attempt to bring order in the negotiations, in Madagascar, the RNF directed the secretariat that in future, it will be the RNF to decide what should be discussed in the RPTF.

2. The RNF had proposed to start substantive negotiations with the EC in a number of areas between July 2004-march 2005. The question which arises is: “What is to be negotiated under the proposed areas since NDPTFs have not come up as yet with national position as they are still grappling with undertaking studies?” The time factor is also important since there is only 5 months remaining to the proposed date of March 2005.

3. The lack of coordination in the negotiations was also exhibited by the insistence of the ESA members interested in the Ocean fisheries that they were ready to negotiate a Fisheries Framework Agreement with the EU while the members interested in the Inland fisheries insisted that they were not. The representative from the ACP secretariat advised that there was no hurry to sign a fisheries agreement; and the Deputy Secretary General of COMESA also cautioned against signing a fisheries agreement in a hurry as it was a delicate issue given the way the Northern countries have over fished their waters. These words of caution did not deter the ESA countries interested in the Ocean fisheries.

Technical backup: Most ESA members lack both the technical and financial capacities to undertake the EPA negotiations. The Brussels ambassadors, who will be negotiating with the EC on the technical level, have little experience in trade negotiations. It was proposed and agreed that a Chief Technical Advisor (CTA) be appointed to assist with the negotiations; but so far he/she has not yet been appointed. The major challenge today facing the ESA Group is how to put the wonderful sentiments expressed in the meetings; and the issues arising from the studies into clear negotiating positions. The technical capacity in the COMESA secretariat is inadequate given the complexity of the negotiations. In fact there is a need to recruit not only a CTA but also a number of technical people. The challenge is the funding since at the moment it is the EU, which is footing most (if not all) the costs of the negotiations.

Prioritization of issues:

A number of delegates emphasized the need to prioritise issues in the negotiation process. That the starting point should be the building up of the South –South integration process and the creation of a regional market, a necessary stage in promoting the smooth and gradual integration of African economies into the global economy. That this will necessitate ensuring that the EU honors what was decided in Article 37.3 of the Cotonou Agreement. The Article states that:

“ The preparatory period shall also be used for capacity –building in the public and private sectors of ACP countries, including measures to enhance competitiveness, for strengthening of regional organizations and for support to regional trade integration initiatives, where appropriate with assistance to budgetary adjustment and fiscal reform as well as for infrastructure upgrading and development, and for investment promotion”

The delegates pointed out that this should be the litmus test of EU’s commitment to make EPAs really developmental. Some delegates observed that if this Article is not fulfilled, then the EPAs will not add any value to the region, other than increasing the competitiveness of EU products in the region, leading to unemployment and increased poverty. The Deputy Secretary General of COMESA urged members not to rush into signing agreements; and that the RNF has the sovereign right to decide whether the ESA region is ready or not to negotiate. That if the ESA region is not careful, they might find themselves in a situation of a horse and a rider in this economic partnership. That the EU knows what they want yet the ESA Group is not sure.

Lessons learnt from the EU-Egypt FTA: A representative from Egypt shared their experience of how they negotiated an FTA with the EU. He explained that there were more than 40 rounds of negotiations between the Egyptian negotiating team and the European Commission for about four and a half years and there were 10 drafts of the agreement. He advised ESA members that there is a need to negotiate safeguards to limit the adverse effects of opening up to the EU and that they must be convinced that EPAs are a tool for development. There are 3 years remaining to the conclusion of the EPAs (up to December 2007), what chances does the ESA group, which is comprised of 16 countries, has to come up with a balanced agreement with the EU? The Egyptian representative also emphasized the importance of building production and trade capacity in areas of comparative advantage, and that this should precede trade liberalization, and that the EU support in this area is crucial. The ESA countries have as yet not built up their production and trade capacities; and on the issue of additional funding (with simpler and swifter deployment procedures) to finance the many programmes required to meet the challenges of reciprocal trade arrangements with the EU; the EU has been insisting that there’s no need for additional funding as long as there are EDF funds. On the issue of the procedures, the EC has reiterated that EDF procedures fall outside the scope of the EPA negotiations

WTO Compatibility: A paper on this issue clarified that the ACP Group in Geneva had submitted a position paper to the Negotiating Group on Rules seeking for amendments to Article XXIV of GATT 1994 to take into account the needs of developing countries. Since Article XXIV is under debate, the question arises as to what kind of EPAs are to be negotiated. There was no indication in the meeting whether this development in Geneva would substantively alter the nature of the EPA negotiations.

Recommendations for CSOs:

1. We need to engage at 2 different but interconnected levels; the “NO to EPA Campaign” must be built on concretely realized negative effects of the EPAs on the ACP economies and peoples livelihoods. This information can be obtained by analyzing the studies already carried out i.e. by the ACP countries and other organizations. At another level, we need to feed directly into the negotiations by giving technical backup to the negotiators at both national and regional levels through the submission of technical papers and active participation in the NDTPF and the RNF. There is space at these two levels for CSOs engagement; and it is important that we effectively utilize it.

2. SEATINI has been organizing technical workshops for the trade officials in the Eastern and Southern African region, CSOs, private sector and the Geneva missions in preparation for WTO Ministerial Conferences. These meetings have been contributing a lot in the strengthening of the regions’ negotiating capacity in the WTO through effective dialogue and coordination among the stakeholders. There is an urgent need to do the same for the EPA negotiations.

3. Information sharing and startegising at regional, Africa and ACP levels, and also between Africa and its partners in the North, is important and should be intensified.