Ethiopia and EPA Negotiation 2008 - FES Ethiopia

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in negotiating. However, Ethiopia should keep the EAC EPA as option and accede to it once it is finalized if it feels that its interest is well-reflected. 6.3.2 Membership in ESA EPA After December 2007, the ESA region has been splintered into countries that sign EPA and those that don’t. Comoros, Madagascar, Mauritius, Seychelles and Zimbabwe intialled the Interim EPA as ESA while five others (Kenya, Uganda, Rwanda, Burundi along with Tanzania from SADC) signed the interim EPA as EAC EPA grouping. The remaining LDCs (Ethiopia, Eritrea, Djibouti, Malawi, Sudan and Zambia) refused to sign EPA and continue to export under EBA regime. Congo has also joined CEMAC and the IOC might form their own configuration. In considering Ethiopia’s possible membership in the ESA configuration, we should make a distinction between two scenarios. The first scenario is the ESA configuration that is composed of only the current signatories of the ESA agreement i.e., Comoros, Madagascar, Mauritius, Seychelles and Zimbabwe. The second is the ESA configuration that includes not only ESA signatories, nonsignatories but also EAC partner states. In the first case, Ethiopia doesn’t clearly have much trade with the most of the Indian Ocean Countries (Comoros, Madagascar, Mauritius, and Seychelles) and the only other signatory, i.e., Zimbabwe. If the ESA configuration continues as fractured as it is now and countries continue to retreat toward their natural configuration, then the only benefit of the ESA configuration for Ethiopia would be logistical. In other words, ESA will be beneficial in facilitating the negotiation process with EU and in providing the forum to share notes and experiences with other countries. Indeed, in the absence of the EAC countries, ESA will be left with mainly least developed countries and island state that would be reluctant to champion the regional integration agenda. Given the bargaining power of a collective group over the individual it would be perhaps wiser for Ethiopia to remain in the ESA grouping during the negotiation process. The final decision of how to sign can be made after the negotiation is finalized. In the second scenario, it is assumed that the ESA region would be the successful conclusion of a comprehensive ESA-EC EPA, to which all countries in the configuration, including the EAC Member States, would adhere. It also assumes the existence strong political will among EAC countries and all ESA countries. At the moment, it is very difficult to imagine how this ‘spaghetti bowl’ of different national and regional liberalization commitments and exclusion list could be knitted into two regional integration groupings comprising all southern 40 | P a g e
and eastern African countries. Harmonization of liberalization schedules between ESA and EAC will certainly challenging. Added to this, it is not clear if non-signatories ESA countries would endorse either the ESA or EAC liberalization schedules. If these challenges can be addressed in a manner that take into account Ethiopia’s specific interests in particular with development assistance, this option would be a realistically beneficial and acceptable position for Ethiopia. This approach will strengthen regional markets that play an important role in supporting economic diversification, given especially domestic markets are small and fragmented in most ESA countries. 6.3.3 Membership in the Horn Initiative Grouping Another alternative that is open to Ethiopia is signing in a Horn Initiative grouping. If Ethiopia manages to complete a well negotiated, well balanced, comprehensive development oriented EPA that addresses development concerns, focus on enhancing supply-side capacities, aid fiscal reforms, and resolve important issues such as the EU’s restrictive Rules of Origin in adequate manner, then the text can be signed together with other countries in the Horn of Africa. This is contingent on the other countries being politically open to such a suggestion; given the tensions in the region this may be difficult if not impossible. The benefit in negotiating EPAs with Djibouti and Sudan and Eritrea is the similarity of the economic status of these countries. All of these countries are least developed countries and are beneficiaries of the Everything But Arms Scheme. Moreover, negotiating Free Trade Agreement and ultimately Customs Union with these countries will practically be easier as Ethiopia has a de facto Free Trade Agreement with Djibouti and Sudan. Moreover Ethiopia’s bilateral trade in Africa is largely with these two countries. This option has a better chance of creating a bigger market and helping regional integration than the unwieldy ESA as the latter is far from integrated regional market and given the slow progress towards effective integration. Also if ESA’s integration effort doesn’t succeed, then the final EPA will be a single country EPA which undermines the standard economic gains from regional integration. On other hand a FTA with Djibouti and Sudan has a better chance of being transformed into a customs union in light of a close trade cooperation agreements existing among the three countries and their geographic proximity. If EAC and ESA countries fail to harmonize their integration agenda, Ethiopia will 41 | P a g e
Page 1 and 2: 2008 Ethiopia and EPA Negotiation R
Page 3 and 4: References ........................
Page 5 and 6: Unilateral preference programs not
Page 7 and 8: Cotonou Agreement. The Cotonou Agre
Page 9 and 10: egional trade arrangements envisage
Page 11 and 12: 4. Content of the Interim EPAs As o
Page 13 and 14: country inputs in such key areas as
Page 15 and 16: African LDCs signed the Interim EPA
Page 17 and 18: the policy space of developing coun
Page 19 and 20: have the audacity to claim otherwis
Page 21 and 22: sale for export between the parties
Page 23 and 24: goods involved in the fraud and imp
Page 25 and 26: instruments remain to be negotiated
Page 27 and 28: 6.1 Initialling/ acceding to Develo
Page 29 and 30: The EBA regime provides duty free a
Page 31 and 32: etween the EU and Ethiopia as these
Page 33 and 34: cost. It should also be noted that
Page 35 and 36: different documentation requirement
Page 37 and 38: negotiation on the Full EPA with EC
Page 39: The final outcome of the EAC-EC EPA
Page 43 and 44: 7. Conclusion: Key Issues Ahead The
Page 45 and 46: importance of technical cooperation
Page 47 and 48: the framework rules on procurement
Page 49 and 50: addressed since most of the CARIFOR
Page 51 and 52: References 1. Agritrade, EPA Negoti
Page 53 and 54: 19. Roberta Piermartini, The Role o
Page 55 and 56: Scope of Application Article 6 Clas
Page 57 and 58: Relations between this Agreement an

Ethiopia and EPA Negotiation 2008 - FES Ethiopia

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