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Experts urge review of offer to EU on EPA negotiations with W/Africa

Feb 28, 2013, 8:50 AM

West African experts have recommended a comprehensive review of the market access offer to the European Union (EU) in order to break the deadlock between the two parties in the negotiation of an Economic Partnership Agreement (EPA) for the creation of a free trade area between them.

A statement by the ECOWAS Commission on Wednesday in Abuja noted that the negotiations had been stalled mainly due to disagreements over the size of the West African market to be open to the EU and the timetable for dismantling the existing tariff, the EPA Development Programme (EPADP) funding to enable the region cope with the cost of adjustment to the EPA, the non-execution clause and the most-favoured nation status.

It said that while West Africa was requesting for the injection of US$9 billion in fresh funds into the EPADP, the EU was offering US$6 billion in funds already committed under the European Development Fund (EDF) as well as existing bilateral and other sources.

According to the statement, the draft offer, one of the outcomes of a three-day meeting of the experts called to consider proposals to reinstate the negotiations, would be forwarded to member states for their comments as part of the process of generating a consensus behind a desired offer.

West Africa, which includes ECOWAS member states and Mauritania, initially made a 60-percent market offer over 25 years for the dismantling of the existing tax regimes against EU’s 80 percent over 15 years.

West Africa has since adjusted its position to 70-percent market offer, but over the same transition period as a gesture of flexibility in the negotiations.

In preparation for the resumption of negotiations, the region has also undertaken a series of analyses of the impact of an increased market offer on the economies of its member states based on three scenarios, particularly on customs revenue, external trade, real GDP growth, investments inflows and consumption of households.

In order to mitigate the potential loss of revenue from the EPA based on these simulations, the experts called for the involvement of the private sector and the implementation of a tax reform programme.

The negotiations are being held to establish a World Trade Organization (WTO) compliant trade regime that will guide trade relations between the EU and the 79 African, Caribbean and Pacific (ACP) countries for the next 25 years as a successor arrangement to the previous partnership conventions.

On the EPADP, the experts urged West African negotiators to obtain a clear indication of the amount of the contribution of the EU to the financing of the first five-year period of the fund prior to the conclusion of EPA negotiations.

The meeting was called by the ECOWAS and UEMOA Commissions to make proposals for resolving the areas of divergence with the EU on the negotiations, which were suspended about a year ago.