Summary: July 8, 2004: Speech by Poul Nielson, Commissioner for Development and Humanitarian Aid. Opening of the negotiations for the Economic Partnership Agreement (EPA) between the Southern African Development Community (SADC) and the European Community. Opening of SADC / EU negotiations for the Economic Partnership Agreement, Windhoek, Namibia (Brussels)
Honourable Ministers,
Ambassadors,
Secretary General of the ACP State,
Executive Secretary of the Southern Africa Development Community and
Representatives of other Regional Organisations,
Ladies and Gentlemen
It is a distinct pleasure and a privilege for me to take part in this official opening of the negotiations for the Economic Partnership Agreement, or EPA, between the European Community and the countries of the Southern African region that have come together as a SADC[1] grouping. I wish to thank the regional authorities and the Government of Namibia for the kind hospitality extended to the Commission's delegation to this meeting.
This opening completes the launching of EPA regional negotiations in Africa, after those with Western and Central Africa last year and with Eastern and Southern Africa in February. I would like to express my satisfaction for this important step. By September, when negotiations start in the Pacific, all ACP regions will be engaged in the EPA process.
The starting point for our Partnership Agreements is the objective of the Cotonou Agreement to reduce poverty by supporting the sustainable development and the gradual integration of the ACP countries into the world economy. Therefore there is continuity in our action, but there is also a strong determination to improve and innovate where necessary.
The presence today of two Commissioners illustrates that for the EC trade and development go hand in hand in these negotiations. Our current collaboration with the SADC already takes full advantage of all three pillars of the Cotonou Agreement:
development aid is provided by the 9th EDF Regional Indicative Programme,
the political dialogue under the "Berlin Initiative", and a meeting of our Joint Steering Committee is taking place this very day in Brussels,
and trade.
Trade has always been a key component of our cooperation within the Lome Conventions and now the Cotonou Agreement. We certainly want EPA to achieve the traditional benefits of trade agreements, first of all within your own region and also between the region and the European Union.
In addition, we intend to apply a development methodology in all phases of the negotiations and to incorporate a comprehensive development dimension in the future agreement.
Negotiating at the regional level, rather than with all ACP, is an essential feature of this approach. This will allow us to better take into account the interests, specificities and constraints of each region, be it from an economic, social or environmental point of view.
For the first time ever, support mechanisms have been put into place to assist the ACP countries in the crucial task of preparing their negotiating position, for two reasons. First, negotiating capacity varies between ACP States from very strong to very weak. It would be regrettable if those who most need it could not fully influence the negotiations or benefit from their outcome.
Second, exchanges with Africa represent a limited share of global European trade, but Europe is for most African countries the most important trade partner. Consequently, maximising the positive effects of EPA is much more critical for Africa and the economic implications must be carefully anticipated and analysed with the best available instruments.
EPA must be fully integrated into your own development strategies, and in our development cooperation. For this reason, we have agreed to make trade and regional integration the main focal sectors of the Regional Indicative Programmes financed by the European Development Fund. Where necessary, the national indicative programmes are being updated within the mid-term review process of the 9th EDF. This not only ensures consistency and synergies within our programming but also secures
substantial funds for preparing and accompanying the negotiations.
Financial support is indeed very important, because in all integration processes, adjustments and transitional costs are inevitable. Although the growth made possible by EPAs is expected to outweigh them, in the short term it may be necessary to put in place adequate accompanying support measures.
Those costs and adjustments may in any case be unavoidable to face the challenges of world economy and complete the regional integration process that you have started. Therefore, the launch of EPA should not introduce new costs, on the contrary, they provide dedicated support complementing the budgets and human resources of each country and region.
In order to facilitate the link between our negotiations and the financing instruments of the Cotonou Agreement, Regional Preparatory Task Forces are being set up.
In practical terms, two all-ACP programmes are presently providing 70 million euro specifically for trade and EPA support, while the SADC regional indicative programme has made available up to a further 70 million euro for the trade and regional integration focal sector.
The Cotonou Investment Facility is still another source for addressing supply capacity constraints, including for the private sector.
Let me stress that in future our support to regional integration will not be limited to trade but will certainly continue also in other sectors. In fact, EPAs are an instrument of the Cotonou Agreement, but they are not replacing it.
My colleague Commissioner Lamy will present in greater detail how we intend to achieve a trade liberalisation which will not only be compatible with sustainable development, but truly supportive of it. This is a crucial aspect of the whole process, but issues other than liberalisation are equally important for drawing all the possible benefits.
Supply capacity constraints, needs of the private sector, ability to comply with sanitary, technical or quality standards, marketing aspects etcetera definitely need more than liberalisation. They need positive support from the regional organisations, the national and local governments and the international donors community.
If we think in terms of sustainable development, our partnership cannot just be economic. It must have a social dimension. The Southern African region has a long established and strong tradition of social dialogue. The EPA negotiations offer an excellent opportunity for deepening the dialogue with the civil society and even provide a model for other parts of the developing world.
One example is the implementation of the International Labour Organisation conventions, which most ACP countries have ratified. Their positive effects both on the productive sector and on a large share of the population should not be underestimated. Core standards are indeed reflected in the Cotonou agreement, but there may be a need to go beyond this. If the region would take the initiative of fully integrating such aspects in the negotiations, I can assure you the Commission would
wholeheartedly support it.
As to the environment, I think we are all fully convinced of the importance of preserving it from the risk of undesirable side effects. This issue will need to be carefully monitored not only in the course of the negotiations, but also when the Partnership Agreement will be actually implemented.
I would like to conclude by mentioning two more aspects that require critical attention, both relating to coherence and synergy. The first is the relationship between national and regional level. Let us not forget that regional organisations are only as strong as their Member States make them. Giving a mandate to the regional negotiator is necessary, but certainly not sufficient. For negotiations to be truly successful, it is essential that an intensive political and technical dialogue
is maintained between the ACP States and their regional organisations throughout the negotiations.
In this respect, I see a potential problem in that the configurations chosen for the EPA negotiations in the broader eastern and southern African region do not fully match an existing organisation, but rather cut across different regional bodies. This certainly does not prevent us from engaging into substantial negotiations now. However, as an individual state can only be a member of a single trading arrangement with the EC, it is imperative that the problems raised by overlapping
membership must be resolved by those concerned.
External consistency is also essential. Compatibility with the WTO rules is a well-known issue, but I refer here more particularly to coherence with the objectives of the African Union, which the European Commission fully supports. I certainly do not think that EPA and African Union are incompatible, on the contrary. In my view, successful regional agreements can and should act as building blocs for facilitating further integration.
Finally, I would underline the important political benefits that may accrue from economic integration and growth.
Many regions in Africa still suffer terribly from conflicts and instability which every day continue to destroy lives, damage property, aggravate poverty and disrupt economic activity.
Peace is both a prerequisite and a consequence of the deepening of economic relations. Working for the welfare of all people is indeed also working for peace.
Thank you for your attention.
[1] Angola, Botswana, Lesotho, Mozambique, Namibia, Swaziland and Tanzania only (with South Africa providing technical support). Other SADC members : DR Congo, Malawi, Mauritius, Zambia and Zimbabwe are not part of this negotiation : they and others are negotiating EPA within the Eastern and Southern Africa group - ESA.
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