Commissioner Hübner's Speech on 'The Launch of Trade negotiations between the EU and the SADC

Honourable Prime Minister, Excellencies, Dear Friends,

Let me first join the previous speakers in thanking the Government of Namibia and the SADC for hosting and organising this event. I am particularly pleased to be here in Windhoek today, not only because it is my first time in this young country, but also because as far as I am concerned it is the first leg of a week-long tour of Southern Africa. As many of you may thus see me again in the coming days you should therefore not be too relieved when I will be done with this speech.

At the outset I would like to underline how pleased I am that the whole of Southern Africa is now actively engaging in EPA negotiations. The SADC is the fifth region to launch this process, and I do believe that thanks to the extended preparatory period we benefited from we will be able to move into the substance rapidly. We should do so for two main reasons. The first one relates very simply to the question of time. We all know that January 2008 is the final deadline for the entry into force of the EPA. Taking account of the few months needed to allow for the implementation of any agreement, this means we only have a little more than three years to conclude our negotiations. What is true for any negotiation will therefore be particularly relevant in our case: time will be of the essence.

The second reason why we should do all we can to rapidly move into the substance of this negotiation is by far more important. It has to do with the fact that EPA negotiations constitute a unique opportunity for all the countries concerned. Let me elaborate a bit on this.

The EPA process

EPA negotiations are a unique undertaking because the agreement we will reach will combine the advantages of South-South regional integration and of North-South trading arrangements. I said "EPA negotiations" but in fact I should have said "EPA process", as the path on which we are engaging ourselves today will take us through various phases over time. When I say process I also mean that this is something that will not end in 2008, quite on the contrary. The implementation phase will very much be part of the EPA process and will require as much attention and care as the negotiating phase.

The EPA process: the negotiation phase

In embarking on the negotiating process itself, our first priority should be to get to know each other better. Improving our mutual understanding will be extremely important if the outcome of our negotiations are to be real "partnership agreements". Good partners must know each other well, and EPA negotiations must therefore constitute a learning process.

I for one would be very interested in learning about the details of existing regional integration schemes in Southern Africa. By that I do not mean exchanging general information about the differing ambitions and proposed timetables of the various regional initiatives. I mean getting the picture crystal clear on what these initiatives mean in concrete terms. Our negotiations must convince the businessmen, not merely reflect the ambitions of politicians. And business is very pragmatic and will only benefit if the result of our negotiations has some practical value. For that, of course, we should know precisely what the situation is on the ground. Once we will have got to know each other better we will then be able to define together what our joint priorities should be. It is only if the priorities we set are firmly rooted in the regional reality that EPA negotiations will bring practical results.

Mr. Chairman, let me emphasize once again that it is crucial that EPAs focus on strengthening regional integration. My colleague Pascal Lamy has very often stated that EPA negotiations should be more about building markets than about opening markets. We should therefore start the EPA process by working on the consolidation of your own regional market. Regional integration already has a long history in your countries, and as the EU and your example show, it is an ongoing process which will not be limited to the negotiations themselves. This is why we have to make EPA negotiations and then the implementation phase an accompanying process which will support your own decisions and objectives for regional integration.

In a second step, on the basis of the progress made with respect to your regional integration priorities, we should then look at the issues at stake in a way that promotes our bi-regional trade relations and fosters your integration into the world economy. Here there should be no taboo and I can tell you that the EC will be willing to discuss any issue that is relevant for expanding trade. However, apart from enhancing the market access preferences which your exports already enjoy when entering the EU, I would personally wish to see our negotiations focus on the trade-related supply-side constraints that currently hinder the development and diversification of your exports. This would of course mean touching upon rules-related areas such as SPS and TBT but would also cover other issues, where negotiations are in fact provided for by the Cotonou Agreement. Apart from trade in services, where I believe your countries stand to gain a lot, I am notably thinking of a number of trade-related areas such as competition policy or the protection of intellectual property rights.

The EPA process: the implementation phase

On the notion of the EPA process, there is an important aspect related to the implementation period on which I would like to insist. During the implementation phase, there will be two possible scenarios for the EPA process. In some areas, your countries will already have been able put in place regional policies on which our bi-regional commitments will then be based. In such cases the EPA will have an immediate effect, allowing us to benefit from enhanced cooperation between our respective regions - the economic partnership will be in place. In other areas, where you will have agreed on shared objectives for your regional policies but not yet fully implemented them my hope is that we will also be able to agree on bi-regional commitments, knowing that these will have to include a stronger element of capacity building to support the implementation of your own regional integration agenda. In this case, it will be economic partnership in progress.

Trade and Development

EPA negotiations will also be a unique opportunity because they will allow to make trade and aid work together. Until now, and my colleague Poul Nielson is here to testify, these two crucial pillars of the Cotonou Agreement were too often perceived as being separate tools. There were a few bridges here and there but at the end of the day these two areas were run independently. Well let me tell you that if EPAs are to become effective instruments for your development, as it is our declared intention, then this perception will have to change.

Within the process of the 9th EDF mid-term review, I can tell you that my services have been insisting towards Poul Nielson's services to improve the mainstreaming of trade into development policy. While it is important for all of us to do this right now that our negotiations start, it will be even more so when we will reach the implementation phase of the EPA process.

Now this is only one side of the coin. The other side - which is just as crucial - is that the development dimension must be fully integrated into EPA negotiations themselves. Let me assure you that I personally do not need to be convinced of this. In any case, as institutions are generally more reliable than individuals, we have proposed to create a joint body that would be precisely in charge of ensuring that the link between our trade negotiations and development support is sufficiently tight. The Regional Preparatory Task Force will be this institution, which will reinforce the mutual supportiveness of the development and trade pillars of our overall partnership and prevent that the negotiations deviate from the overarching development objectives which we have set ourselves in the Cotonou Agreement.

Regional integration

With their emphasis on regional integration, EPA negotiations will also constitute an opportunity for the SADC to strengthen its institutions. I understand that the geographical configuration has made it difficult for your side to come with a detailed final negotiating structure, but once overcome these difficulties will in fact result in a reinforcement of regional negotiating capacities. I would here wish to pay tribute to the excellent work done by both the SADC Secretariat and the authorities of Botswana in the overall coordinating role they have accepted provisionally. I cannot overemphasize the importance of clarifying the institutional set up from the very beginning of our negotiations. Examples in other regions show that unless this is done in the early stage of the process the whole negotiation can be affected later on.

By insisting on the notion of EPA as a process I also wanted to mean that the negotiations should be kept flexible enough to allow them to evolve over time and adapt to a changing environment. While being important across the whole ACP Group, this is especially the case for Southern Africa as - let's face it - a number of question marks do remain as regards the geographical configuration within which you have chosen to negotiate. Just as the European Union developed both in size and in complexity over the course of time - as recently demonstrated by both the EU enlargement and the adoption of a European Constitution - EPA negotiations should provide scope for possible changes in their geographical coverage, which could happen in parallel with their progress on the substance of the issues at stake.

It is mainly the overlap of a number of regional arrangements that makes this particularly important for Southern Africa. Take the case of South Africa, which is in a customs union with 4 of the 7 SADC EPA Member States... But on this point I trust that the involvement of South Africa in our negotiations in an observer and support capacity will ensure the best possible outcome. However, other sub-regional initiatives have gained momentum recently, notably the East African Cooperation (EAC) with the signing of its customs union. This will certainly affect our own EPA negotiations as our Tanzanian friends are part of that initiative.

Therefore, and in order to cut a long story short, I would plead for our EPA process to avoid disrupting existing trade links and on the contrary to support regional integration across the whole of Southern Africa.

This would be in line with the continental integration objectives on which the African Union was founded. The recent AU report on EPA negotiations, which was adopted in Kigali at the end of May, indeed calls for EPAs to be used to build upon and accelerate Africa's continental integration. The notion of EPA as a flexible process should thus help pursuing the integration objectives of the AU.

WTO negotiations

Let me now just say a few words about WTO negotiations, which I see as being complementary to our EPA process. We have come to a critical stage of the Doha Development Agenda and in three weeks the General Council will meet in Geneva to take stock of the negotiations and hopefully agree on broad modalities on which we could then base the completion of the Round.

We do have a common objective in advancing the Doha Development Agenda with a view to harvest results as soon as possible which should be pro-development and aimed at facilitating the integration of poor and vulnerable countries in the world trading system. The EC therefore wishes to work with ACP and G90 partners in the weeks and months ahead.

I have had close contacts with representatives from the ACP and G90 Groups and, on their invitation, I will be attending the Ministerial meetings organised in Mauritius in the next few days. I must say that the texts we have seen coming out of the Dakar, Kigali, and Guyana preparatory meetings demonstrate the hard efforts which developing countries are making to advance the WTO agenda.

My main message and advice at this point is to call for the adoption of ACP / G90 positions that do not constrain your negotiators in Geneva so severely that they are unable to do their job effectively when finalizing the July package. In my view the G90 position should be above all an assessment of and a reaction to the negotiating texts that are currently being drafted Geneva. I hope this is the kind of approach that will be followed next week in Mauritius.

To conclude, let me just say that I look forward to working with you on all these issues in the coming weeks and months. Thank you very much for your attention.

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• Commissioner Nielson's Speech at the Opening of SADC-EU negotiations for the Economic Partnership Agreement (8/7/2004)