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EPA Review Annex Documents - DFID

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Despite an agreed joint roadmap at the launch of negotiation on 8 July 2004, the initial<br />

composition of SADC <strong>EPA</strong> configuration like the one in ESA was not without challenge and<br />

was unsustainable in terms of existing regional integration initiatives and unspecified role of<br />

South Africa. The complication of SADC <strong>EPA</strong> configuration lies in many aspects, including<br />

Angola, a post conflict situation; SDCU common external tariffs and tariff revenue sharing<br />

and the existing revenue sharing arrangement complicates the negotiation. This<br />

configuration itself undermines SACU.<br />

In the end, SADC <strong>EPA</strong> group was left with Mozambique which signed an interim <strong>EPA</strong> with<br />

the EU, SACU members BLNS singed an interim <strong>EPA</strong> with the EU and Angola opted out for<br />

an interim <strong>EPA</strong>. It is interesting to note that the SADC <strong>EPA</strong> signatories have a shorter<br />

liberalisation period than the signatories in other <strong>EPA</strong> groups because its four SACU<br />

members needed to align their liberalisation schedules with the de facto one for SACU CET.<br />

South Africa, a fifth member of SACU, had previously established this liberalisation schedule<br />

when negotiating its TDCA. The BLNS each had its own list of imports schedules from the<br />

EU further increasing the tension around the SACU CET; which is already a great obstacle<br />

to regional trade integration (Bilal and Steven, 2009).<br />

Central Africa <strong>EPA</strong> Group<br />

Central African <strong>EPA</strong> group consist of eight countries, six of them, Cameroon, Central African<br />

Republic, Chad, Democratic Republic of Congo, Gabon and Equatorial Guinea, are<br />

members of Economic and Monetary Community of Central Africa (CEMAC) as well as Sao<br />

Tome Principe and Democratic Republic of Congo. Sao Tome and Principle and DRC joined<br />

the CEMAC for <strong>EPA</strong> negotiations, but were not involved in any membership of CEMAC. Five<br />

countries in this <strong>EPA</strong> configuration, three members of CEMAC and Sao Tome Principe and<br />

Democratic Republic of Congo are LDCs with EBA market access to the EU. CEMAC was<br />

created in 1994 as a customs union. Weak or non-implementation by the member countries<br />

of the agreed custom union regime highlights a need for renewed political commitments to<br />

regional integration. The CET in CEMAC ranges from 5% to 30%, with un-weighted average<br />

tariff rate of 19%. The CEMAC Secretariat overseeing compliance with the agreed trade<br />

regime lacks the means and authority for carrying out its role. Some key measures such as<br />

limiting tariff exemptions, phasing out remaining surcharges and tariff reduction with or<br />

without <strong>EPA</strong>s are needed to improve compliance with requirements for a custom union<br />

should be adopted at regional at national level.<br />

The export performance in this region has been primarily dominated by the oil sector which<br />

is reflected in the increase in the volume and share of oil export in total exports. Since 1997,<br />

there has been decline of non-oil exports to GDP, though it began to pick up again in 2005<br />

(table or graph here to show the region trade?). FDI inflows to oil and related sectors in<br />

CEMAC have been steadily increasing. There are substantial similarities in nature resources<br />

(natural comparative advantages); their production and trade patterns among CEMAC<br />

members, like the other regional RTA in Africa, results in limited scope for intra-CEMAC<br />

trade. Oil is the main export for many central African countries; other exports are related to<br />

wood products and cotton. There is little diversification especially in manufacturing, of six<br />

members of CEMAC, only Cameroon has some kind of industrial base. Given its natural<br />

resource, production and trade structure, the greatest boost to this region trade in the short<br />

to medium term may come from strengthening their domestic supply response and<br />

promoting trade with the rest of the world.<br />

CEMAC started its <strong>EPA</strong> discussions with the EU in 2003, Sao Tome, Principle and<br />

Democratic Republic of Congo joined CEMAC in the preparation of an <strong>EPA</strong>, but was not<br />

involved in the membership of CEMAC. CEMAC <strong>EPA</strong> negotiations with the EU made little<br />

progress due to divergences in their trade structures, policies and interests. Also given the<br />

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