adminextended the negotiating deadline to January 1, 2016.
“Obviously it will give many African economies including Zimbabwe to align their economies with the new order,” trade expert Mr Gift Mugano said in an interview.
“The previous deadline (of January 1 2013) was disastrous as most of our economies are very fragile. Zimbabwe, for example, cannot compete with regional players.
“It was going to be even more difficult for the local industry to compete with the superpowers of the EU where Government has limited safety nets to deal with the impact of trade liberalisation and preference erosion. So the decision by the EU will certainly give Zimbabwe a lifeline to address its structural challenges,” he said.
Zimbabwe has been trading with the EU under ACP with trade relations dating back to 1975 under the Lome Convention, which was the first trade agreement signed between ACP countries and the European Union.
Following its expiration in 2000, the Cotonou Agreement was signed with the aim of integrating the ACP countries into the global economy.
So far, it has successfully created reciprocal trade relations in the World Trade Organisation trade rules.
More recently, the ACP and the EU have undertaken negotiations for Economic Partnership Agreements, as part of key element of the Cotonou Agreement.
Most African countries are refusing to embrace the EPAs proposed by the EU. The principal reasons provided by African states are that they need more policy space and flexibility on matters relating to the implementation time frame.
African countries are also saying they will need more than 15 years to implement the full EPA, while the EU is insisting that African countries can only have a maximum of 15 years.
The ACP countries are also opposed to the provisions that would limit the use of export taxes both as a matter of principle, and for the sake of preserving their policy space.
Traditionally, export taxes have been used as a means of revenue support. Export taxes can also assist in the transparent management of minerals, forestry and other resources.
A more controversial use for export taxes has been to apply them as either an industry or an export diversification policy, for instance encouraging producers to add value to unprocessed goods.
In this regard, ACP countries imposed a punitive tax on the export of raw materials. For example, in Zimbabwe, the Government increased the export tax on unprocessed chrome from 15 percent to 20 percent with effect from August 2010.
Another contentious issue is the standstill clause which stipulates that after the entry into force of the EPAs, the parties may not introduce new tariffs, or may not raise existing tariffs and, once eliminated, tariffs may not be re-imposed. African states feel that the standstill clause should be removed from the EPA texts in order to allow for maximum use of policy space for development purposes. African countries need to remain flexible to make trade policy changes if necessary.
The Most Favoured Nation clause dictates that following the conclusion of an EPA, should any ACP country or grouping conclude a Free Trade Agreement with any developed country or any other major trading economy, including the newly emerging economies such as China, India, Russia and Brazil, then any more favourable treatment provided to that developed country or grouping must also be extended to the EU and vice versa.
Some ACP negotiators consider that the inclusion of the MFN provision inhibits South-South co-operation, specifically under the “Enabling Clause” at the WTO.
The Enabling Clause was established to legitimise the principles under which unilateral preference schemes were granted by developed to developing countries, and to allow lower thresholds for liberalisation in agreements between developing countries. Hence its application should exclude the above newly emerging countries.
Mr Mugano, a PhD student at Nelson Mandela University in South Africa, said the reasons listed above showed that many disagreements still remain between the ACP group and the EU, prolonging the negotiations of an agreement that had been planned to be concluded in 2008.
Secretary-general of the African Caribbean Pacific bloc Dr Mohamed Ibn Chambas said last week the European Parliament’s vote to extend the proposed deadline for concluding EPAs with ACP countries was “prudent”.
“The European Parliament has shown wise political judgment in extending the period for negotiation of EPAs to 1 January 2016,” he said from Brussels. “Negotiating the EPAs is a complicated process, involving a number of very complex and diverse issues which can impact heavily on our developing economies.
“It requires careful and thorough discussions, without the pressure of unreasonable deadlines. We should also recall that earlier, the European Parliament had called on the European Commission to show flexibility in the negotiation process. It is hoped that the Commission will demonstrate such flexibility in order to resolve the outstanding contentious issues between now and 2016.”
He said the two-year extension could help to facilitate a more serene environment to make balanced decisions beneficial to all parties.
Online Reporter