THE OUTCOME OF PHASE 1 ACP-EU NEGOTIATIONS

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1 INTRODUCTION THE OUTCOME OF PHASE 1 ACP-EU NEGOTIATIONS In their approach to the EPA negotiations the ACP identifid six areas within which the negotiations should be conducted: market access issues; agriculture and fisheries issues; development issues; trade in services ;trade related areas; legal issues. While the European Commission favoured a different approach this paper seeks to review the progress made in each of these six areas from an ACP perspective. MARKET ACCESS - Areas Addressed Under Market Access Under phase 1 five areas have been discussed: principles and objectives for access for non-agricultural products; the product coverage of any EPAs; the transition period for the phasing in of tariff reduction commitments; the nature of safeguard measures; rules of origin issues - Areas of Convergence It has been agreed that the market access arrangements to be concluded should not leave any ACP state worse off than is currently the case and that indeed market access arrangements should build on and improve the current acquis. It has also been agreed that the details of product coverage of individual EPAs and the specific structure of the transition period for the implementation of individual EPAs should be agreed at the nationl or regional. It is also agreed that all EPAs should incorporate appropriate safeguard provisions. 1

2 It is unclear what the commitment to ensuring no ACP country is worse off will mean in the area of agricultural market access where the process of CAP reform is eroding the value of ACP preferences by systematically reducing the prices paid on the EU market for a range of basic commodities which the ACP export to the EU (including, for example, products as diverse as beef and rice). This is compounded by the process of preference erosion resulting from multilateral trade liberalisation through the WTO. Equally the agreement that the details of the product coverage and specific timetables for the phasing in of the provisions of any agreement should be subject to agreement at the regional or national level would not prohibit the conclusion of guidelines for such arrangements as an integral part of the conclusion of phase 1 of the ACP-EU EPA negotiations (although effectively this issue has now been superceded by events). This issue could have been addressed as an integral part of any formal and legally binding ACP-EU framework agreement concluding phase 1 of the negotiations. However no such legally binding agreement has been concluded merely a set of common conclusions which will provide a point of reference to provide guidance to the phase 2 negotiations. While there is agreement on the need for safeguards, there is as yet no agreement on the nature and scope of such safeguards (for example, can they be pre-emptive, involving the monitoringa nd surveillance of trade in sensitive products and allow for swift and effectoive measures should a potential threat of market disruption emerge?) - Area of Divergence While there is agreement that future market access arrangements should not leave any ACP state worse off, the ACP position includes the specification that this objective be respected whether or not ACP countries participate in EPAs. This ACP position implies a need for an EU initiative on alternative trade arrangements for ACP countries (particularly non-least developed ACP countries) who feel unable to sign up to any economic partnership agreement arrangements. The European Commission however to date shows no indication of a willingness to explore how a non-punitive alternative to EPAs for non-least developed ACP countries could be established in ways which ensure that no ACP state is worse off. The European Commission appears to beleive that WTO rules do not allow for any other alternative but EPAs. The EU, while recognising the need to back load certain products under any EPA does not agree with the ACP proposal that there should be a five year moratorium on the commencement of tariff dismantling by ACP countries. 2

3 Equally the EU does not agree to ACP proposals that the implementation of taritf dismantlement should be linked to the attainment of certain development indicators by ACP countries, in order to ensure that ACP countries are adequately equipped to meet the challenge of free trade with an economic giant like the EU. AREAS OF DIVERGENCE MARKET ACCESS ACP EU Outcome on market Access No ACP state should be left worse off in terms of market access whether of not participating in an EPA. Tariff Dismantlement Favours a five year moratorium on the introduction of any tariff reductions by ACP countries under any EPA agreement. Link to Attainment of Development Indicators No proposals have been forthcoming on the establishment of non-punitive alternative trade arrangements for non-least developed ACP countries Believes there is no need for a moratorium on tariff dimantlement and that sensitive sector s can be addressed through back loading tariff reductions where this is necessary. The ACP believe that the phasing in of tariff reductions should be linked to the successful attainment of pre-defined development indicators. EU believes tariff reductions should be linked to clearly defeined timetables and not the attainment of development indicators. Believes the latter is incompatible with WTO rules. Rules of Origin The ACP want rules of origin which recognise the increasingly global nature of input procurement decisions and wants rules of origin which open up substantive new export opportunties for ACP manufacturers whilst still allowing subsstantive value addition to place in ACP countries. The EU wants rules of origin harmonised across different agremeents and does not favour particular asymetrical rules for ACP countries. It is however nominally open to tailoring rules of origin to the needs of different regions. Equally there is no agreement on any modification of the current rules of origin for ACP products to recognise the increasingly global nature of input procurement and the need for ACP countries to base their industrial development initially on final stage processing of inputs procured elsewhere. 3

4 The EU has agreed however that this issue should be subject to more detailed discussions by relevant groups of experts. There is a need however for such discussions by groups of experts to be guided by a clear political commitment to opening up new market opportunities for ACP exports, based on substantive processing in ACP countries of non-originating raw materials. AGRICULTURE AND FISHERIES ISSUES - Areas Addessed Under Agriculture and Fisheries Issues Under phase 1 six areas have been discussed: objectives and principles to guide negotiations on agricultural and fisheries issues; processing, marketing, distribution and transportation (PMDT) issues in the field of commodities; rules of origin; export subsidies sanitary and phytosanitary measures; fisheries. - Areas of Convergence There is agreement on the importance of agriculture and fisheries issues to poverty eradication and sustainable development in ACP countries; the importance of PMDT issues; the need to address SPS issues the need for disciplines on export refunds the importance of building on the existing acquis the importance of considering the impact of CAP reform on the EPA negotiations; the importance of safeguard provisions; the need for regional fisheries agreement. - Areas of Divergence However, the areas of agreement mask significant divergences on the specific measures which can and should be taken as an integral part of preparing the ground for the negotiation and implementation of EPAs. 4

5 On PMDT issues the ACP believe that effective programmes of support in this area are essential for the transformation of ACP economies. The EU for its part believes that PMDT can only have any real impact if there is a dynamic private sector in the ACP countries concerned operating within an enabling environment. An enabling environment, which in the EU s view, can best be created by the conclusion of the European Commision s proposed Economic Partnerhsip Agreements. On SPS issues the ACP want to see a standstill on EU SPS measures for five to ten years and the establishment of a detailed dialogue on how genuine EU health concerns can be addressed without imposing excessive burdens on ACP suppliers, which make the exploitation of market opportunities impossible or uneconomic. The EU is of the believe that equivalency agreements are not possible with ACP countries given the weaknesses which exists in ACP testing and verification arrangements. This means ACP countries will face high costs in certifying and verifying compliance to EU standards, costs which can make exporting uneconomic. While the EU recognises the need to address export refund issues on a case by case basis it is not willing to recognise the importance of addressing the trade consequences of new forms of CAP distortions linked to the new systems of farm support the EU is creating. This is because the EU maintains such systems of support are non trade distorting despite the fact that such systems of support have production and trade outcomes which simply would not occur in the absence of such public aid programmes. While paying lip service to building on the existing aquis and taking into account the impact of CAP reform, the EU is not recognising the extent to which CAP reform is undermining the economic value of the acquis and hence the need for new arrangements in order to maintain the value of the acquis. Until such time as the EU recognises these realities, the broad agreement on the need to maintain the acquis and address the impact of CAP reform, will have little impact on ensuring that ACP countries continue to gain real benefits from the system of trade preferences the EU establishes for agricultural and value added food product exports from ACP countries. In the area of fisheries the EU is opposed to the conclusion of framework ACP- EU fisheries agreements setting out the need to address the sustainable management of ACP fisheries resources, obligatory landings and other issues linked to ensuring that the ACP maximise the long term benefits from their increasingly valuable yet vulnerable fisheries resources. 5

6 AREAS OF DIVERGENCE AGRICULTURE AND FISHERIES ISSUES ACP EU Processing, Marketing, Distribution and Transport PMDT programmes are essential to the transformation of ACP economies and should be in place before the phasing in of free trade.. SPS Issues 5-10 year standstill on new SPS measures and initiation of detailed dialogue on how to meet genuine EU health concerns without placing undue burdens on ACP exporters. Export Refunds Exports refunds should be comprehensively addressed as should the production and trade distorting outcomes of the new CAP policy instruments. Maintaining the Acquis Maintaining the acquis should relate to the maintaining and value of prefeernces (including under the commodity protocols), not just specific measures the value of which is being eroded by the process of CAP reform Taking Account of CAP Reform There is a need to address as an integral part of EPA negotiations, the distorted production and trade outcomes arising from the new forms of CAP support the EU is moving towards. Fisheries Relations Wants the establishment of a framework, ACP-EU fisheries agreement incorporating fundamental principles on responsible and sustainable fisheries management and obligatory landings and other measures to promote local fisheries sector development. PMDT programmes will only work if the right policy framework is in place and so should only be established once the implementation of EPAs is underway. EU has sovereign rights to establish its health rules through SPS meaures. SPS measures are an integral part of EU food safety policy. Equivalency agreements with ACP governments not possible because of institutional weaknesses in the ACP. Willing to address export refund issues on a case by case basis. New forms of agricultural support are less trade distorting or non trade distorting, so no problems arise. Commitment to ensuring under EPA arrangements that no ACP country is worse off in terms of current market access. Willingness to discuss the implications of CAP reform for EPA negotiations, within the framework of recognition of the EU s shift from more trade distorting to less trade distorting forms of assistance. See s no need for a such a framework fisheries agreement, preferring to adopt a case by case approach to fisheries arrangements with ACP states (given the on going evolution of EU policy in this area). 6

7 DEVELOPMENT ISSUES - Areas Addessed Under Development Issues To date only general principles relating to the development issues to be addressed as part of the EPA negotiations have been discussed. This is reflected in agreement on generalities but fundamental disagreement on substantive practical issues. - Areas of Convergence To date there is agreement that: EPAs should not be seen as an end in themselves but as a means to the achievement of wider objectives; EPAs should take account of the capacity of ACP economies to adjust to the introduction of free tarde with the EU; EPAs should contribute directly to the development of ACP countries and be accompanied by appropriate development support measures so as to enable ACP countries to maximise the benefits they gain from EPAs; EPAs should be mainstreamed into ACP policies and into EU development co-operation programmes; EPAs should be acommpanied by general capacity building measures; EPAs should support the industrial development or ACP countris; EPAs shuld be consistent with and supportive of regional integration processes. However, beyond these general statements there is little agreement about what this should mean in practice when it comes to concrete programmes and policy initiatives and the sequencing of the various policy changes and support programmes envisaged or under discussion. - Areas of Divergence The major area of disagreement is on the need for additional resources to finance the many and varied programmes which will be needed to equip ACP economies to meet the challange of free trade with the EU. The ACP does not want to see funds to meet the costs of adjustment associated with the introduction of EPAs divert financial resources away from existing development co-operation priorities. Equally the ACP would like to see a dramatic improvement in the deployment and effectiveness of EU aid instruments. 7

8 The European Commission for its part see s no need for additional funding to be made available so long as so much of the existing committed EDF funding remains unspent. Equally the Commission believes that it is important to get the policy context right (i.e. through signing EPAs) before designing and implementing restructuiring programmes. There is therefore a fundamental disagreement between the ACP and the EU on the issue of the sequencing of restructuring assistance and the phasing in of tariff reduction commitments The issue of EU assistance to fiscal and economic restructuring and social programmes associated with the implementation of EPAs has yet to be substantively discussed. The ACP side would like to see these issues comprehensively addressed as part of the negotiations. The EU believes these issues still need to be thoroughly discussed before the approach to dealing with them can be determined. ACP Funding AREAS OF DIVERGENCE DEVELOPMENT ISSUES EU Belives additional funding will be required using simpler and swifter aid deployment procedures, so as not to divert funds from existing priorities. Sequencing Restructuring assistance should be made available and programmes implemented before free trade is introduced, so that ACP economies are equipped to meet the challenges posed by moves towards free trade with the EU. Support to Fiscal and Economic Restructuring The ACP wants to see a comprehensive approach adopted to addressing the issues of both fiscal and economic restructuring as an integral part of any moves towards free trade with the EU, with the negotiations giving rise to specific instruments and programmes designed to address these challenges. EU believes no case can be made for additional funding until existing EDF funds have been fully utilised. The policy context should be right with moves towards free trade being implemented before restructuring programmes are designed and implemented, since only if a dynamic private sector operating in the right policy context exists will such assistance be effective. The EU believes more detailed discussions are needed on this issue before any commitments are made on the policy and programme response required. 8

9 TRADE IN SERVICES - Areas Addessed Under Trade in Services The ACP have put forward proposals for the development of the service sector in ACP countries, which is seen as a priority to be promoted prior to any liberalisation of the service sectors. They have proposed specific objectives and the principles and modalities for any moves towards liberalisation of services, with the sequencing being the key consideration. The EU has not responded to these ACP proposals in part prefering to see the outcome of the Cancun Ministerial negotiations before determining its specific EPA proposals. - Areas of Convergence The EU agrees with the ACP that support for the development of service sectors should be provided to ACP countries within the context of EPAs. The EU agrees that the ACP should be placed under no fixed obligation to liberalise services, but believe that it is in their best interests to do so. The EU agrees that the regional dimension of service development should be taken into account, with liberalisation of services being deferred where this could support the development of service provision at the regional level. Both parties agree on the importance of establishing supportive regulatory frameworks for service sector development. - Areas of Divergence There is disagreement whether additional funds should be made available to support service sector development in ACP countries. Additional funds with rapid and flexible deployment procedures are felt to be essential by the ACP. The EU see s no need for additional resources above and beyond existing EDF funds to address the issues of support for service sector development. The EU does not favour the opening up of service supply through the opening up of movement of natural persons. For ACP countries this is seen as an essnetial element of any liberalisation of services. For the EU this touches on the sensitive issue of migration. An additional area of divergence is the scope of trade in services negotiations. The EU favours a WTO-Plus approach, whereas the ACP do not want to go further than anything negotiated in a multilateral context. 9

10 ACP Additional Funds AREAS OF DIVERGENCE TRADE IN SERVICES EU Additional funds with rapid and flexible disbursement procedures are needed to support ACP service sector development. No additional resources are needed, any programmes required can be funded from unspent EDF funds. Free Movement of Natural Persons ACP wants to include discussion on free movement of natural persons as an integral part of any reciprocal liberalisation of trade in services. Scope of Negotiations The ACP do not want to go beyond the commitments their governments are willing to make in a WTO context. The EU wants a more restricted approach to this issue since it touches on the sensitive issue of migration. The EU favours a WTO+ approach to trade in services negotiations. TRADE RELATED AREAS - Areas Addessed Under Trade Related Areas Only an initial exchange of views has taken place on trade related issues, with three areas of convergence and two areas of divergence having been identified. - Areas of Convergence There is agreement on the importance of trade related areas to ensuring smooth trade flows and the minimisation of transaction costs. There is a shared recognition of the importance of having clearly defined and transparent regulatory frameworks and efficient and well functioning institutions for the design and implementation of measures in trade related areas. - Areas of Divergence There is considerable divergence over the scope and coverage of the issues to be addressed under EPAs in the sphere of trade related areas. The EU wants to go beyond the trade related areas listed in the Cotonou Agreement to include 10

11 issues such as government procurement and data collection. For the ACP there is felt to be an urgent need to acquire the necessary expertise before entering into negotiations on these complex areas. The ACP believes only some of the issues listed in the Cotonou Agreement dealing with trade related areas should be addressed within EPA negotiations. TRADE RELATED AREAS LISTED IN THE COTONOU AGREMEENT The Cotonou Agreement contains provisions on a range of trade related areas, with the EU committing itself to assisting ACP countries in strengthening their regulatory frameworks with regard to: * competition policy; * intellectual property rights; * standardisation and certification; * sanitary and phytosanitary standards; * trade and environmental issues; * labour standards; * consumer policy. There is further more disagreement on how far commitments on trade related areas should go. The EU favours a WTO-Plus approach, whereas the ACP are reluctant to go beyond anything which there governments would agree to in a multilateral context. There is also considerable disagreement over the sequencing of the provision of capacity building support and the negotiation of rules on trade related areas under EPAs. 11

12 AREAS OF DIVERGENCE TRADE RELATED AREAS ACP EU Coverage of Trade Related Issues The ACP believe only some of the trade related issues mentioned in the Cotonou Agreement should be covered in EPA negotiations and only where the ACP have the necessary expertise. Scope of Trade Related Issues The ACP do not want to go beyond anything which their governments have agreed to at a multilateral level. Sequencing of Assistance and Negotiations The ACP would like to see capacity building support programmes for the development of specific service sectors under implementation before entering to negotiations. The EU wants to go beyond the trade related areas listed in the Cotonou Agreement to include procurement and data protection. The EU wants negotiations on trade related areas to go beyond comitments made in the WTO, the so called WTO+ approach. The EU would like to see agreement on trade related areas first with specific programmes being designed and implemented in the light of these agreements. LEGAL ISSUES - Areas Addressed Under Legal Issues Under phase 1 seven areas have been discussed: principles and objectives; the structure and content of EPAs; the parties to EPAs; the outcome of Phase 1; compatability with WTO rules; modlaities for the entry into force of EPAs; dispute settlement and non-execution clause. - Getting Agreement on Basic Principles and Objectives While there is a broad agreement on the principles and objectives, since these are largely enshrined in the Cotonou Agreement which provides the basis for the 12

13 EPA negotiations, there are significant differences in emphasis between the EU and the ACP on which objectives take precedence. For the ACP top priority has to be given to the promotion f poverty eradication and sustainable development, with the basis for the integration of ACP economies into the world economy being structured with the promotion of these objectives in mind. For the European Commisison further integration of ACP economies into the world economy through the pursuit of progressive liberalisation of trade in goods and services is seen as the best vehicle for the promotion of poverty eradication and sustainable forms of development. This difference of emphasis is commonly blurred over but is in fact fundamental to many of the unresolved issues in the ACP-EU negotiations, for its relates to the sequencing of liberalisation with other broader support measures. For the EU the primary concern is for ACP countries to get the policy framework right by committing to liberalistaion, within this context the necessary support measures can then be put in place. For the ACP the issue is to put in place the necessary support measures so that ACP countries can fully benefit from any further trade liberalisation to the benefit of the poor and the the objective of the promotion of sustainable forms of development. - Areas of Convergence During Phase 1 it has been agreed that: there should continue to be some kind of all-acp-eu mechanism for the coordination and monitoring of phase 2 negotiations (which in certain regions ahve now been launched); ACP members will be the parties to the EPAs, with the role of regional organisations depending on the mandate given to these bodies by their constituent ACP members - Area of Divergence Until the end of phase 1 there was continued divergence on the need for a formal framework agreement to conclude the first phase of ACP EU EPA negotiations. The ACP favoured the conclusion of a formal agreement which would be legally binding and which would guide phase 2 while the EU saw no such need for a formal agreement. The European Commission s preferred to leave flexibility for taloiring regional agreement to the needs of the parties 13

14 concerned. The ACP were deeply concerned that the EU would seek agreements with the weakest regional groupings first and then seek to use these as the template for similar agreements with other ACP regional groupings. In order to avoid this the ACP preferred to see the establishment of a formal agreement on the scope and content of any regional EPAs as an integral part of the conclusion of phase 1 negotiations. As it turned out the agreement concluded on October 2 nd 2003 is not legally binding and will only be a point of reference for phase 2 negotiations. This outcome is closer to the EU position than the ACP position on the outcome of phase 1. The only the commitment the AC have secured is a continuation of phase 1 talks in parallel to the commencement of phase 2 in an effort to hammer out remaining points of divergence, of which there are many. There is continued divergence on the need for additional resources with the EU claiming that there is no need for additional resources while EDF funds remain unspent and the ACP maintaining that additional funds are needed which can be spent swiftly and effectively under procedures which are not subject to the delays which currently plague EDF aid deployment. There is continued divergence over the need for any modification of WTO rules. The ACP believe that WTO rules need to be adjusted in order to accomodate the needs of ACP countries under moves towards reciprocity between a group of developed economies and a group of least developed and developing economies in order to fully accomodate the development needs of the less developed partners (specifically with regard to the extent of product coverage, the length of the transition, the link to progress with the attainment of development objectives, and safeguard provisions). The EU believes there is no need to modify WTO rules on free trade areas, since existing WTO rules provide the necessary flexibility to address ACP concerns. However this EU position is inconsistent since the European Commission acknowledges that WTO rules do not allow the linking of the phasing in of tariff reductions with the attainment of specific agreed development objectives, a linkage which the ACP have called for. With regard to dispute settlemant and the non-execution clause the ACP favour using existing national and regional mechanisms in line with international norms and the establishment of a role for the ACP Group as a third party arbitrator. The EU favours establishing through mutual agreement specific procedures for dispute settlement based on similar provisions under other EU free trade area agremeents. This would involve consultations prior to the invocation of a mutually agreed arbitration procedure (modelled on existing dispute settlement arrangements to which the EU is already a party). The ACP is deeply concerned that any non-execution clause could provide a basis for the 14

15 EU to invoke trade sanctions should ACP states find the costs of introducing free trade with the EU too economically, politically and socially onerous. 15

16 ACP Outcome of Phase 1 AREAS OF DIVERGENCE LEGAL ISSUES EU The ACP Favoured the conclusion of a formal agreement, which would be legally binding to guide phase 2. The document agreed on October 2 nd 2003 is not legally binding and only serves as a point of reference to provide guidance for phase 2 Financing Belives additional funding subject to swift and effective deployment unencumbered by the current delays which plague the EDF is required to meet the challanges which EPAs will pose for ACP countries WTO Rules WTO rules need to be adjusted in order to accomodate the needs of ACP countries under moves towards reciprocity between a group of developed economies and a group of least developed and developing economies. Agreement on Scope and Structure The ACP favoured an agreement on the scope and structure of EPAs as a specific outcome of the phase 1 negotiations. Dispute Settlement Favours using existing mechanisms in line with international norms and a role for the ACP Group as a third party arbitrator. Non-Execution Clause ACP are concerned that no non-execution clause should provide a basis for the imposition of trade sanctions. See s phase 1 as a clarifictaion phase with no need for a formal agreement, although its is open to further discussion on this issue. The outcome of phase 1 is closer to the EU s preferred outcome than the ACP s preferred outcome. Believes that there can be no ccase for additional funds being made available until such time as existsing EDF funds have been fully utilised. No need for modification of WTO rules, since existing WTO rules provide the necessary flexibility to address ACP concerns. The EU believed there is no need to formally agree on the scope and structure of EPA under phase 1 since this is covered by the minutes of the joint meetings. Favours mutually agreed procedures involving consultations prior to the invocation of arbitration procedures Favours provisions based on articles 96 and 97 of the Cotonou Agreement 16

17 OVERVIEW OF THE OUTCOME OF PHASE 1 Following its July-August meeting ACP Ministers reiterated: their commitment to ending the phase 1 negotiations with a binding agreement; the need for issues of common concern to be addressed under phase 1; the need for additional resources and to improve EDF disbursement procedures; the need for a modification of WTO rules to allow for flexibility in the negotiation of EPAs; the need for ACP indebtedness to be addressed within the EPA negotiations However, ACP Ministers also acknowledged that ACP regions and states which felt they were in a position to do so, could commence phase 2 negotiations in September This would mean that issues of common concern would have to be addressed in parallel with the conduct of phase 2 negotiations. The endorsement which ACP Ministers gave to the commencement of phase 2 negotiations where regions felt in a position to begin such negotiations, in parallel with on-going phase 1 negotiations (which it was clear would not be satisfactorily concluded by September 30 th 2003) is likely to give the European Commission little incentive to address the substantive issues raised under phase 1. This is particularly the case since the Commission was always sceptical about the value of phase 1 negotiations and preferred to move immediately to phase 2 negotiations. A situation is likely to emerge where phase 1 is not so much concluded as overtaken by events. This would suit the European Commisison s underlying agenda. THE CONDUCT OF PHASE 2 NEGOTIATIONS The European Commisison is proposing a four part approach to the phase 2 EPA negotiations. The first initial phase would run until the end of 2003 and would involve: - identifying the main objectives, policies and tools for regional integration; - reviewing priority issues for in-depth discussion; - discussing and agreeing on the negotiating structure and exact timetable for the conduct of negotiations for the next 15 months; 17

18 - establishing immediate research and capacity building priorities; - establishing regional task forces for the coordination of the regional dimension of the negotiations; - a rolling programme of seminars with regional negotiators; - reaching out to regional networks of non-state actors. The second phase Convergence on Strategic Approach would run from 2004 to Mid 2005 and would involve: - analysing regional trade and production data; - reviewing tariffs and revenue implications; - reviewing regulatory frameworks and regional policies; - identifying priority issues for regional integration around 6 issue groups (presumably these six issue groups would be agriculture, non-agricultural market access issues, SPS and TBTs, trade in services, trade and investment facilitation and trade related areas) - reviewing current tariff structures as the starting point for liberalisation; - puting in place assistance for research and capacity building - developing regionally based trade related support programmes through the 9 th EDF mid term review process - the organisation of sector/issues based consultative meetings. The third phase Structuring and Consolidation would run from mid 2005 to mid 2006 and would involve: - agreeing on the structure of EPAs; - consolidation of the outcome of discussions on EPAs and the channeling of the agreements reached into draft texts; - a close focus on sensitive issues in order to find solutions; - continued capacity building and outreach work; The fourth phase of Finalisation would run from mid 2006 to the end of 2007 and would as the name suggests involve the finalisation of the whole process. While to date there has been little public debate on these proposals for the conduct of phase 2 negotiations an important issue for the ACP would be to ensure that priority is given to identifying and addressing sensitive issues at an much earlier stage in the negotiations. In this way priority ACP concerns will need to be addressed at an early stage in the negotiations before the details can be agreed on the areas where the EU perceives its greatest interest to lie. However it remains to be seen whether this approach would be adopted. 18

19 In terms of the structuring of the conduct of negotiations Commision proposals would appear to follow a similar structure to that used under phase 1. There would be technical, senior official and Ministerial level negotiations. Technical groups would be set up on specific issues and the deliberations of these technical groups would then feed into the high level EPA negotiating groups. These technical groups would consist of small groups of people (4 to 6 people). These technical groups would look at - trade in goods - core sectors - statistics - trade in services - investment - competition etc. The High Level EPA Steering Group ( trade co-ordinating meeting ), would work on the overall structure of the proposed EPAs and would guide the deliberations of the technical working groups. It would also provide the link to the all ACP level and the progress of negotiations in other ACP regions. The supreme decision making body within the process would be the Ministerial Level meeting whose mandate would be to guide negotiations and agree on the final results. Ministerial meetings should include representatives of all regional member governments. Meetings would be held alternately in Brussels and the regions concerned In parallel with these structures, support would be extended to Regional Preparatory Task Forces. This would seek to coordinate national preparations at the regional level and would be responsible for harmonising and coordinating assistance to both national and regional processes of preparing for the EPA negotiations. Importance is attached to the convening of consultative meetings with groups of stakeholders to work on social dimensions of EPAs, impact on specific sectors, the environmental and gender dimensions. 19