NEGOTIATION OF THE ECONOMIC PARTENERSHIP AGREEMENT BETWEEN WEST AFRICA REGION AND THE EUROPEAN UNION

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1 NEGOTIATION OF THE ECONOMIC PARTENERSHIP AGREEMENT BETWEEN WEST AFRICA REGION AND THE EUROPEAN UNION Background and justification TECHNICAL WORKING GROUP ON SERVICES Terms of reference The Cotonou Agreement, in its articles 36 and 37, planned the negotiations of new trade agreements known as the Economic Partnership Agreements (EPA).compatible with the WTO rules. These agreements will allow the progressive removal of trade barriers between the West African countries and the European Union, with the reinforcement of the cooperation in all areas related to trade. West Africa and the EU have started the West Africa-EU EPA negotiations since the 6 th October 2003 in Cotonou. The main objectives of the EPA are the reinforcement of regional integration and the progressive insertion of ACP countries into world trade. ACP countries of the West African region, which include ECOWAS countries and Mauritania, have chosen the option of signing the EPA as a single region, which is translated by the important involvements in trade policy and customs regime. In the framework of the preparatory activities for the negotiations of the Economic Partnership Agreements between West Africa countries and the European Union, different thematic working groups, of which one on Trade in services,, were set up. This group is made up of representatives of ECOWAS and UEMOA and resource persons from the West Africa region. The mandate of the TWG on services is to initiate the analysis and any other relevant document necessary to providing documentation, strategies and positions about some proposals of negotiations and also some offers and requests proposals on services in the framework of the EPA negotiations. During the previous phase of the EPA negotiations, the working sessions and discussions with the European Commission about the services sector have allowed to reach the following results: - The conception of a documentary study on services in West Africa; - The elaboration of a matrix on the different services sectors in West Africa, focusing on the constraints related to the development of these services; - The formulation of recommendations to the negotiators for the first phase of negotiations. Following the Chief Negotiators decision of 17 June 2009, negotiations on services have been delayed to a later phase. The consideration of services in this new phase of EPA negotiations requires from West Africa to start deeper reflections on the content of the text agreement on services and on the possible commitments that the region has to take in a transversal way, and the ones that each country could take individually. The current activities of the TWG on services should allow to obtaining these results. 1

2 Main objective The general objective pursued by the working group is to prepare at best the participation of West Africa in the negotiations on services. Specific objectives The main objectives to be achieved by the Technical Working Group for this phase of negotiations are: - The definition of the methodology of services liberalization in EPA (phase of liberalization and sectorial negotiations modalities); - The proposal of positions of negotiations on the different issues related to trade in services; - The drafting of the parts of the agreement related to the services; - The elaboration of the list of offers and requests of the region; - The elaboration with each country of its list of specific commitments; - The proposal of the region reaction on the possible requests from the EU to the region; - The proposals on the reforms to be initiated in the sectors of services or the supporting activities to be set up for the improvement of the competitiveness of the sectors. In order to achieve these objectives, some issues have to be taken into consideration. The TWG work will be based on the analysis of these ones mentioned above according to the result to be achieved. Different results have to be achieved by the TWG on services Result 1: To have a better knowledge of the situation of services in the different EU markets in order to draw the sketch of a regional common request. Issues to be taken into consideration 1. To propose the global strategy of negotiations of the regional request to be negotiated with the EU; 2. What kind of services does the region export? 3. What are the main difficulties to access to the international market in general for the West African services providers? How can they be removed in the framework of EPA negotiations? Result 2: To have a better knowledge of the implications of the different rules in trade in services in order to draw the sketch of the legal text to be negotiated Issues to be taken into consideration 1. To make a proposal of the global strategy of negotiations of the WA draft text to be negotiated; 2

3 2. What is the best way to including the development aspect in the EPA negotiations according to the legal text? Result 3: To have a better knowledge of the situation of services within the countries of the West Africa region in order to draw the sketch of the offers of the region (competitiveness evaluation, determination of the most relevant centers of interest and regulatory audit). Competitiveness evaluation 1. General importance of the different types of services in the economies of the region Evolution of these sectors within the countries What kind of policies or reforms have contributed to these evolutions, especially for the sectors that have been expanded? (Liberalization according to the Structural Adjustment Programme; the national internal reforms or the community reforms?) 2. Who are the main actors in the sectors of services: national operators, sub regional operators or foreigners? 3. What are the sectors where European operators are the most active or constitute the dominating ones? 4. How to appreciate the level of services liberalization in West Africa? 5. Is this liberalization creating a higher dependence vis-a vis the external world? Is it a source of growth? What is the current situation at each sector level? 6. Does the opening of the services markets to the private foreign operators have a positive impact on the expansion of these sectors? On the increase of services exports? On jobs creation? On the efficiency of the support of services to the production and to trade? 7. What are the constraints to trade in services in the West Africa region? Centers of interest 1. What are the main sectors of services for West Africa? Which criteria do we use to determinate these main services? 2. What are the centers of interest of the EU in the negotiations on services with the developing countries, mainly with ACP countries? 3. What are or can be the centers of interest of EU for West Africa? 4. Are the sectors interested by the EU already liberalized in West Africa? 5. Is the West Africa region discussing with the EU about the twelve sectors of services? Are there some areas to be excluded from the discussions? If yes, what are these areas? What kind of reasons is given to explain the exclusion of some sectors from the EPA negotiations? 6. What are the centers of interest of West Africa in the EPA negotiations according to the four modes of services supply and to the sectors of services? Regulatory audit 1. To make a proposal on the global strategy of negotiations and the specific commitments proposals to be prepared with each Member State; 3

4 2. What is the current situation of Trade in services in West Africa and in Europe (imports, dominating sectors)? 3. What is the state-of-play of negotiations/commitments in WTO? 4. What is the state-of-play of negotiations/commitments at the regional level? 5. What is the current situation of the regulatory status quo in the sectors of interest (market access, national treatment, and other regulations)? Beyond the regulatory regime, is there any policy statement in the sector in question? 6. How to introduce the development aspect in the EPA negotiations in terms of specific commitments? Result 4: To draw the sketch of the needs in Aid for Trade in services in the framework of the EPA, including the technical assistance. 1. What kind of support is needed for the expansion of Trade in services? (preparing an evaluation of the activities subscribed in the EPA DP and proposing others if needed) 2. What are the reforms needed to be set up at the community level to better develop services? 3. What kind of assistance is required to negotiate for the benefit of the services providers? 4. Which coordination to be undertaken by ECOWAS for the participation of Member States to the negotiations on services at the multilateral level? 5. How to improve access to the European market of services and the West African providers? What kind of programmes and reforms are initiated or are to be initiated? 4

5 Work programme The methodology proposed by the West African TWG on services for the finalization of the negotiations on services in EPA, includes two activities, namely: 1. To elaborate the draft text on services in West Africa, to do the follow-up of the negotiation with the EU. To elaborate some commitment proposals of the region and to do the follow-up of the negotiations. To prepare answers and counter-proposals to requests submitted by the EU region. 2. To provide support for the organization of workshops and other meetings with Member States in the framework of the preparation of these negotiations. Concerning the preparation of the list of specific commitments with Member States, some work sessions will be also organized with them. A calendar will be elaborated in this optic, after the regional workshop in June. In addition, the Validation Regional Workshop of specific commitments proposals could be organized during October or November Referring to this methodology, the TWG proposes the organization of the next meetings as follows: a. Three retreats for the TWG to be held in: - Cotonou, April Praia, 3-4 June Abuja, September 2011 b. Two meetings with Member States to be held in: - Praia, 6-8 June Ouagadougou, October or November