Review of the ESA EPA Negotiations with EU (Final Report)

REVIEW OF THE ESA EPA NEGOTIATIONS WITH THE
EUROPEAN UNION CONSITENT WITH THE COTONOU
AGREEMENT, ARTICLE 37.4
FINAL REPORT
Submitted to:
COMESA Secretariat
Ben Bella Road
Lusaka, Zambia
www.comesa.int
Prepared by:
Dr. Evarist Mugisa
Premium Consulting Limited
4th
Floor, Impala House
13/15 Kimathi Avenue
P. O. Box 3068 Kampala, Uganda
Tel: 256 (041) 253 783
Fax: 256 (041) 253 783
E-mail: premium@spacenet.co.ug
_________________________________________________________________________
FEBRUARY 2007

TABLE OF CONTENTS
EXECUTIVE SUMMARY ................................................................................................................................v
I INTRODUCTION..................................................................................................1
1.1 THE CONTEXT OF THE EPA NEGOTIATIONS............................................1
1.2 THE SIGNIFICANCE AND SCOPE OF THE REVIEW....................................2
1.3 THE REPORT STRUCTURE ............................................................................2
II THE STATE OF PLAY IN THE EPA NEGOTIATIONS IN ESA REGION.......3
2.1 OBJECTIVES AND PRINCIPLES.....................................................................3
2.1.1 Objectives of the EPA ...............................................................................................3
2.1.2 The Principles of EPA ...............................................................................................3
2.2 THE CONFIGURATION OF THE NEGOTIATIONS ......................................3
2.3 THE STRUCTURE AND PROCESS OF THE NEGOTIATIONS.......................4
2.4 THE SUBSTANCE OF THE NEGOTIATIONS ................................................6
2.4.1 Development ...............................................................................................................6
2.4.2 Agriculture....................................................................................................................7
2.4.3 Market Access..............................................................................................................8
2.4.4 Fisheries........................................................................................................................8
2.4.5 Services .........................................................................................................................9
2.4.6 Trade-related issues.....................................................................................................9
2.5 NEGOTIATION WORK PLANS / ROADMAPS.............................................10
2.5.1 Phase I: Setting of priorities ....................................................................................10
2.5.2 Phase II: The Substantive negotiations .................................................................11
2.5.3 Phase II: Continuation and Finalization................................................................11
2.6 CONCLUSIONS.............................................................................................11
III THE MAIN CHALLENGES IN THE NEGOTIATIONS...................................20
3.1 FUNDING .....................................................................................................20
3.2 THE NEGOTIATION STRUCTURES.............................................................20
3.3 THE NEGOTIATING STRATEGY AND CAPACITY.....................................21
3.4 STAKEHOLDER BUY-IN ..............................................................................21
3.5 COHERENCE, CONTINUITY AND CONSISTENCY ....................................22
3.6 THE ESA CONFIGURATION AND LEGAL MANDATE...............................23
3.7 OVERLAPPING MEMBERSHIP OF REGIONAL INTEGRATION SCHEMES24
3.8 RELATING EPA TO WTO NEGOTIATIONS................................................25
3.9 CONCLUSION...............................................................................................26
IV AN ASSESSMENT OF THE DEVELOPMENT ASPECTS OF TRADE AND
TRADE-RELATED PROVISIONS.......................................................................27
4.1 THE DEVELOPMENT DIMENSION OF THE ESA EPA...............................27
4.2 TRADE IN GOODS .......................................................................................33

Review of the ESA EPA Negotiations Final Report
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December 2006 By Premium Consulting Limited
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4.4 TRADE-RELATED AREAS............................................................................38
4.5 CONCLUSIONS.............................................................................................42
V AN ASSESSMENT OF THE ROLE OF ESA REGIONAL PREPARATORY
TASK FORCE AND THE SUPPORT OF THE EU AND OTHER DONORS.43
5.1 THE ESA REGIONAL PREPARATORY TASK FORCE..................................43
5.1.1 The main objectives of the RPTF ..........................................................................43
5.1.2 Outputs of the RPTF ...............................................................................................44
5.2 DEVELOPMENT SUPPORT FROM THE EU AND OTHER DONORS..........44
VI ASSESSMENT OF COHERENCE BETWEEN COMESA INTEGRATION
PROCESSES AND EPA COMMITMENTS.........................................................46
6.1 COMESA INTEGRATION OBJECTIVES AND PROCESSES .........................46
6.1.1 COMESA Integration Objectives ..........................................................................46
6.1.2 COMESA Integration Processes............................................................................47
6.2 COMESA COMMITMENTS TO EPA..............................................................48
6.2.1 COMESA Common External Tariff .....................................................................49
6.2.2 Regional Infrastructure Programmes.....................................................................50
6.2.3 Regional Energy Programmes.................................................................................51
6.2.4 Regional Institutions.................................................................................................51
6.3 CONCLUSION...............................................................................................52
VII THE MAIN CONCLUSIONS AND WAY FORWARD.....................................53
7.1 THE MAIN CONCLUSIONS..........................................................................53
7.2 THE WAY FORWARD...................................................................................55
7.2.1 Measures necessary to support the completion of the negotiations.................55
7.2.2 Time needed to effectively conduct negotiations ................................................57
REFERENCES .....................................................................................................................A
APPENDICES..................................................................................................................... D
APPENDIX 1: TERMS OF REFERENCE FOR THE REVIEW ..................................D
APPENDIX 2: SUMMARY OF ESA AND EC POSITIONS........................................H
APPENDIX 3: THE SIX NEGOTIATING GROUPS .................................................. I
APPENDIX 4: SUBJECT OF NEGOTIATION...........................................................J
APPENDIX 5: ESTIMATED ADJUSTMENT ............................................................N
APPENDIX 6: PEOPLE INTERVIEWED .................................................................O

ACRONYMS AND ABBREVIATIONS
ACBF Africa Capacity Building Facility
ACP Africa, Caribbean and Pacific
AU African Union
CAP Common Agricultural Policy
CARIFORUM Caribbean Forum of ACP States
CET Common External Tariff
COMESA Common Market of Eastern and Southern Africa
CPA Cotonou Partnership Agreement
CTA Chief Technical Advisor
CTN Common Tariff Nomenclature
EAC East African Community
EBA Everything-But-Arms
EC European Commission
EDF European Development Fund
EPA Economic Partnership Agreement
ESA Eastern and Southern Africa
EU European Union
FAO Food and Agriculture Organisation
FTA Free Trade Area
GATS General Agreement on Trade in Services
GATT General Agreement on Tariffs and Trade
ICT Information and Communications Technology
IGAD Intergovernmental Authority on Development
IOC Indian Ocean Commission
KEPLOTRADE Kenya-European Union Post Lomé Trade Negotiations
LDCs Least Developing Countries
MDG Millennium Development Goals
NDTPF National Development and Trade Policy Forum
PMDT Production, Marketing, Distribution and Transportation
PMU Project Management Unit
RNF Regional Negotiating Forum
ROO Rules of Origin
RPTF Regional Preparatory Task Force
RTA Regional Trade Agreements
SADC Southern Africa Development Community
SDT Special and Differential Treatment
SEMAC Communauté Economique et Monétaire de l’Afrique Centrale
SPS Sanitary and Phytosanitary
TBT Technical Barriers to Trade
UPTOP Uganda Programme of Trade Opportunities and Policy
WTO World Trade Organization

EXECUTIVE SUMMARY
1. For the last 25 years trade between the ACP countries and the EU was based on non-
reciprocal preferences (the Lomé Conventions), which granted nearly all products originating
from the ACP countries duty-free access to the European market. These preferences have not
helped the ACP countries to achieve their development objectives, to diversify their
production and increase trade with the EU. The preferences have also been incompatible with
the WTO principles of MFN and non-discrimination that forbid preferential treatment of
selected countries. In light of the above, the Cotonou Partnership Agreement (2000)
establishes a new trade cooperation framework - Economic Partnership Agreements (EPA) -
to replace the existing regime effective from 2008. The new framework is based on the
principle of reciprocity between the EU and the ACP countries.
2. The negotiations for EPAs with the EU are taking place in six groups in the ACP regions.
Article 37 of the CPA spells out the procedures for such negotiations and provides that EPAs
shall be negotiated during the five-year period, starting from September 2002 to be concluded
by December 2007, after which the EPAs are supposed to enter into force effective January
31st, 2008. Also, the CPA (Article 37.4) mandates the parties to undertake a comprehensive
review of EPA negotiation during 2006. It states that; “…the parties will regularly review the
progress of preparations and negotiations and will in 2006 carry out a formal and
comprehensive review of the arrangements planned for all countries to ensure that no further
time is needed for preparations or negotiations”. This report reviews the ESA EPA
negotiations with the EU in accordance with the above-mentioned Article 37.4.
3. The ESA configuration is composed of 16 countries. It is a heterogeneous and diverse
grouping and the countries that constitute it are at unequal stages of development. 12 of them
are classified as LDCs. The LDCs enjoy duty and quota-free access to the EU through the
Everything-But-Arms (EBA) initiative, whereas the more developed economies of the non-
LDCs still face significant tariff barriers to the EU in certain sectors. Within the ESA group,
there are separate regional groups in operation creating problems of overlapping membership.
There are at least three overlapping economic integration blocks (COMESA, the EAC and
SADC), all of which have different political and economic priorities. The EU is ESA’s
largest trading partner. Total value of trade flows between ESA and the EU is about 10

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billion per year (EC, 2005).
4. In December 2003, the ESA established its negotiation structures. At the national level, each
country has a National Development and Trade Policy Forum, which is multi-sectoral and has
representatives of both the public sector and non-state actors. At the regional level, there is a
Regional Negotiating Forum, which is the technical preparatory organ of the ESA group
responsible for preparing negotiating positions. The negotiating level is made up of two sub-
levels. The first one consists of ambassadors and senior officials from the EC; the second is
made up of ESA Ministers and EC Trade Commissioner. The regional integration
organisations (COMESA, EAC, IOC and IGAD) provide secretariat services to the
negotiating structures above the national level, with COMESA taking the lead. The
negotiating structure is largely participatory and representative, involving various
stakeholders at national and regional level.
5. Formal negotiations between the ESA region and the EU were launched on February 07th
,
2004. Since that time, as many as 9 meetings have taken place at RNF level. Detailed work
has been undertaken in areas such as the regional fisheries agreement, development issues,
market access issues, trade-related issues, etc. A draft EPA text was drawn up as a basis for
detailed discussions. The first text-based negotiations were held in September 2006. There
have been concerns in the preparatory process over the effectiveness of the consultations and
preparations in terms of equipping the negotiators to deal effectively with the EC on the
multiplicity of complex issues. As a result, there have been suggestions and conclusions that
the EC side is “calling the tune” and “forcing the pace”, which might lead to an agreement
that is poorly suited to the region’s development needs.
6. In terms of substance, the ESA-EU negotiations have evolved around the six clusters, namely
development, agriculture, fisheries, market access, services, and trade-related issues. In the
development cluster the negotiations cover issues such as policy and regulatory framework;
production, distribution, marketing and transport; financial resources; financial cooperation;
investment; mining and mineral resource management; natural resource management; as well
as technology transfer and knowledge-based systems.
7. In agriculture, ESA is negotiating improved SDT, preservation of the benefits obtained under
EBA; improvement of existing market access, specific safeguards, a programme to build
capacity and commodity agreements. In fisheries, the negotiations cover ensuring improved
market access of fishery products, improving competitiveness to meet EU standards and SPS

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requirements; commitment by EC member states having access to ESA surplus fish resources
to transparency and full disclosure of catches and supply of all data, allocations of financial
resources for the sustainable development of marine and inland fisheries, a programme of
support for national and regional efforts to combat IUU fishing in general. In market access,
the negotiations cover simplified ROO with in-built asymmetries in favour of the private
sector in ESA, capacity building and development of the region in the area of SPS, full
market access to the EU, a transitional period of 25 years, with an initial 10-year moratorium,
and maintenance of a list of sensitive products and a safeguard clause.
8. In the area of services, ESA is negotiating (a) establishment of a special safeguard
mechanism, (b) establishment of a sound regulatory framework, (c) time and support
(financial and technical) to carry out baseline surveys upon which potential initial offers
could be made to the EU, (d) a specific package for the progressive opening of the EU market
for services under mode IV and for the development of a coherent policy regarding mode IV;
(e) support to strengthen ESA countries’ capacity in the supply of services, and (f) measures
that will allow the region’s citizens’ easy access to ICT as outlined in Article 43 of the CPA.
9. Finally, in the area of trade-related issues, ESA negotiators have been mandated to emphasize
the need to build adequate legal and institutional capacities in the ESA region before any
disciplines in these areas can be envisaged for negotiations. In addition, the ESA region is
mandated through its RPTF to study how to build capacities in this area and subsequently
decide on whether or not to incorporate trade-related issues into the ESA EPA negotiations.
With regard to the “Singapore Issues” (competition, procurement, trade facilitation and
investment), the ESA negotiating mandate stresses the need to continue with the educative
process at the all-ACP level.
10. In assessing the subject of negotiations, it would appear that while there may be justification,
some of the demands by ESA may be difficult to defend, because they may be perceived as
unrealistic. The issues of limiting the loss of benefits arising from the erosion of preferences,
preservation of the benefits obtained under EBA, and commodity agreements are cases in
point. There are indications that their maintenance will be difficult on account of the global
trends and some may be subject to legal challenge as the EC has indicated.
11. The ESA-EU negotiations have been conducted in three phases. Phase I (March – August
2004) was for setting of priorities, Phase II (September 2004 – December 2005) was for
substantive negotiations, and Phase III (January 2006 – December 2007) was planned for

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continuation and finalization. In spite of putting in place an elaborate work plan, the
negotiations are generally behind schedule.
12. As negotiations have proceeded, particularly as they entered into the most crucial and last
phase, major challenges have emerged. There have been challenges specific to the clusters as
well as those which have been cross-cutting. The development cluster remains one of the
most controversial because the EC does not accept the ESA position on development and has
refused to negotiate the development cluster. It has argued that (a) EPAs deal with trade and
hence development is already covered under the CPA, (b) it has no mandate to negotiate
development and has therefore proposed limiting the EPA text to two very general
paragraphs, and (c) the development chapter contains EC commitments to the ESA and little
or nothing in form of commitments for ESA, especially on regional integration. The ESA
remains firm on its demand for a development dimension in the EPA and argues that there
will be no EPA without development.
13. In the agriculture cluster, while the ESA group has made its negotiating position clear, the EC
has hitherto not presented a written and coherent response to the ESA position. It has rejected
discussion of the Common Agricultural Policy (CAP) reforms, saying the CAP reforms
constitute a domestic policy and hence are not subject to negotiations under EPAs. This, of
course, is diversionary and is unacceptable to ESA. The EC has also rejected the issue of
commodity protocols arguing that their maintenance is contrary to the spirit of an FTA
14. In the market access cluster the EC has not been quite responsive to ESA demands. In
particular, in the area of ROO, the EC has insisted on the use of the value-addition criterion
instead of ESA’s proposed cumulation-and-wholly-obtaining criteria. In the area of SPS, the
EC has insisted on compliance with the SPS standards. The EC has not committed itself to
providing full market access as demanded by the ESA; it has also rejected the ESA demand
that the LDCs within the group should be exempted from any tariff liberalization under EPA.
15. In the area of services the review notes that there had been a planned assessment to cover
sub-sectors, such as financial services, telecommunications, transport, construction and
related engineering, professional tourism, health, education, business, computer and energy
services. Unfortunately, the assessments were not carried out in all the member countries
and, even in the countries where they were done, there was no clarity about how these will
input into the regional positions on the issue of trade in services. There have also been

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concerns regarding the ad-hoc nature in which the assessments were conducted. In the on-
going negotiations, some countries in the ESA region are already pushing for opening up of
the services sector without due consideration for full assessment at the national and regional
level and the needed capacity building in terms of regulation and provision of services.
16. With regard to trade-related issues, the EU negotiating mandate appears to be more ambitious
in terms of its demands on the ESA region than the Doha negotiations and the provisions of
the CPA. Thus, while it had been agreed to exclude negotiations on such issues as trade and
investment, competition policy and government procurement from the Doha Work
Programme, the EU mandate for the EPA negotiations contains explicit liberalization on
these trade-related issues, along with facilitation.
17. Other challenges include problems with the funding of the EPA negotiations and
implementation (the debate on “additionality” of funding); the stringent EDF procedures, the
limited information flow about the EPA negotiations; limited negotiating capacity; flaws in
the negotiating strategy; problems of the geographical configuration and legal mandate;
problems associated with the overlapping membership to regional integration blocks; WTO
compatibility, etc. All these and the above challenges clearly show that the ESA region is not
prepared for the conclusion of the EPA negotiations as envisaged under the Cotonou
Agreement. Moreover, ESA’s success in the six clusters of interest seems to be firmly pegged
to the EC’s goodwill.
18. An assessment of the coherence between the COMESA integration processes and EPA
commitments shows that the ESA EPA and the COMESA regional integration agenda have
potential to co-exist and support each other consistent with one of the key principles of EPA.
To that extent it is notable that even before EPAs, the regional integration initiatives in
COMESA were pursuing the very objectives being pursued by EPA such integrating the
regional economy into the global economic system. COMESA’s integration agenda therefore
has a direct link to the proposed EPA through its various programmes. However, there are
difficulties being experienced in the COMESA integration agenda. For example, not all the
COMESA members have joined the FTA, the establishment of a COMESA customs union is
expected only in 2008 yet the EPA negotiations are expected to be concluded in 2007; etc.
19. EPA is providing some stimulus for further integration by pushing the ESA region to deal
with the various problems relating to integration within COMESA. However, it is also clear

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that much of the pressure for taking forward the regional integration agenda through EPAs is
being exerted externally by the EC by imposing arbitrary timetables and progress targets.
This is a matter of serious concern given that region-specific internal factors, such as the ones
faced by the ESA region, should be the driving force of this process. There are concerns that
the external pressure being exerted on the regional integration process by the EC through
EPAs is leaving little space to focus on these internal factors and provide time for suitable
solutions to be found.
20. This review concludes, based on the above analysis, that: (a) there has been some limited
progress, which has been characterized by some measure of consensus on a number of issues
as well divergence of opinions in a number of areas. (b) In spite of putting in place an
elaborate work plan, the negotiations are generally behind schedule. (c) The ESA countries
are generally not prepared for the conclusion of the EPA negotiations. (d) One of the key
challenges for the ESA region relates to capacity constraints, which is compounded by the
region’s involvement in various trade negotiations – at regional and multilateral levels. (e)
There are differences in the level of ambition among the ESA members, as a result of which,
there are differences in expectations from the EPA among the various members. (f) In terms
of substance of the negotiations, the key priority for the ESA region is the development
component of an EPA, without which there will be no EPA. (g) The financing of EPAs is one
of the most contentious issue in the negotiations. (h) The EC is keen to promote its own
interests at the cost of the weaker partner - the ESA region.
21. As a way forward, the review recommends the following measures to help in the completion
of the negotiations to ensure the interests of the negotiating parties, particularly the ESA
region are secured. They include: (i) Integration of EPA activities into the national trade
policy; (ii) strengthening the technical capacity of the ESA group, (iii) coordination with
other regions, (iv) improvement of information flow, (v) improvement of the negotiating
strategy, (vi) improvement of the funding of EPA-related activities, (vii) extension of the time
– by three years – for conclusion of the EPA negotiations.

I INTRODUCTION
1.1 THE CONTEXT OF THE EPA NEGOTIATIONS
For the last 25 years, trade between the African, Caribbean and Pacific (ACP) countries and the
European Union (EU) has been based on non-reciprocal preferences (Lomé Conventions I –IV,
1975-2000), which granted nearly all products originating from the ACP countries duty-free
access to the European market. In spite of these preferences the share of the ACP countries in
total EU imports continued to decline, the ACP exports remained largely undiversified, and the
ACP countries have become increasingly marginalized in global trade. In addition, the Lomé
Conventions were not compatible to the WTO principles of Most Favoured Nation (MFN) and
non-discrimination that forbid preferential treatment of selected countries and apply favourable
conditions to all trading partners.
Against this background, the EU and ACP countries and agreed to establish a new trade
arrangement based on reciprocal trading relations in conformity with the WTO rules, starting in
year 2008. The new arrangement is based on the Cotonou Partnership Agreement (CPA), which
was signed on December 31st, 2000. The CPA seeks to achieve sustainable economic
development, smooth and gradual integration of the ACP countries and alleviation of poverty
(Article 1). The main instrument for achieving these objectives is an Economic Partnership
Agreement (EPA) that comprises of a reciprocal, WTO compatible FTA between the EU and the
regional groupings of the ACP countries (Article 36). By definition, an EPA is a free trade
agreement (FTA) based on reciprocal opening of markets by the parties.
Article 37 of the CPA spells out the procedures for such negotiations and states that EPAs shall
be negotiated during the five-year period, starting from September 2002 to be concluded by
December 2007, following which the EPAs are supposed to enter into force effective January
31st, 2008. The negotiations were structured in three main phases. The first (Phase I) was an
overall ACP Group discussion with the EU on general issues of common interest to all ACP
countries as well as the framework of the EPA. This was followed by Phase II on substantive
negotiations at the regional level, and Phase III for finalization of the negotiations.
The EPA negotiations are taking place in six groups (geographical configurations) in the ACP
regions (Annex 2). Although the regions are negotiating independent of each other, they are
following an overall similar framework of negotiating principles and indicative schedules. For
each region, the two parties have agreed on a Joint Road Map for the conduct of the negotiations.
Against this background, the CPA (Article 37.4) mandates the parties to undertake a
comprehensive review of EPA negotiation during 2006. It states that; “…the parties will regularly
review the progress of preparations and negotiations and will in 2006 carry out a formal and
comprehensive review of the arrangements planned for all countries to ensure that no further time
is needed for preparations or negotiations”. Although this mandate sounds controversial, it was
endorsed by the ACP Council of Ministers held in Papua New Guinea in June 2006. The review
will seek to assess the progress made so far, the outstanding issues and challenges encountered
and will make suggestions on the way forward. It is also important to note that even though the
review mandate points to “regular reviews” in addition to the comprehensive reviews, not much
has been done by both parties in this respect.

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Given that the EPA review process is mandated under CPA and that it is contractual, it is useful
to note that ESA and EC have different approaches and expectations regarding this process. From
the onset, the EC seemed unconvinced about the need for an independent and comprehensive
review, expressing an increasing desire to reduce the “comprehensive review” to a bilateral
discussion with ESA. On the other hand, the ESA region has insisted (and rightly so) that the
review process should be independent, consultative and comprehensive.
This report has been prepared taking into account the provision of Article 37 (4) of the CPA and
the decision of the Council of Ministers of June 2006. It also takes the view of the ESA group of
the need for consultation and comprehensiveness.
1.2 THE SIGNIFICANCE AND SCOPE OF THE REVIEW
The Significance of the Review
A lot of time and resources have been invested in the negotiations of the EPA by the two parties.
However, there remains a lot of uncertainty as to whether the parties will manage to resolve the
various issues surrounding the negotiations before the deadline of December 31st, 2007. There is
also concern about what the EPAs will bring in terms of benefits for the ESA countries. Some
countries are concerned whether their interests will be adequately taken into account in the
negotiations. The Review therefore provides an assessment of the progress of the negotiations,
the challenges that have to overcome and how best to move forward to ensure that the interests of
both parties are secured.
The Scope of the Review
The Review covers:
 state of play of the negotiations;
 the development aspects, including the trade and trade related provisions;
 the negotiation work plans/road-maps;
 the contribution of Regional Preparatory Task Force and the support from the European
Development Fund, EU Member States or other donors on a national or regional level;
 the measures necessary to support the timely completion of the negotiations;
 the coherence between COMESA integration processes and EPA commitments.
1.3 THE REPORT STRUCTURE
This report is organized in seven parts. It starts with an acknowledgement and Executive
Summary. The first part gives the background and justification for the review. Part 2 deals with
the state of play of the EPA negotiations. Part 3 examines the challenges and concerns in the
negotiations. Part 4 assesses the development aspects of trade and trade-related provisions. Part
5 assesses the role of ESA regional preparatory task forces and the support given by the donors.
Part 6 assesses the coherence between COMESA integration processes and EPA commitments.
Part 7 makes conclusions and recommendations on the way forward.

II THE STATE OF PLAY IN THE EPA NEGOTIATIONS IN ESA
REGION
2.1 OBJECTIVES AND PRINCIPLES
Based on the CPA and the outcome of the first phase of the negotiations, both parties agreed on
the objectives and principles of the EPA. These objectives and principles are contained in the
ESA-EC Joint Roadmap (January 7th, 2004) and the Negotiating Mandate (February 6th, 2004).
2.1.1 Objectives of the EPA
The overall objectives of the EPAs, as stated in these documents, are to: (i) ensure the sustainable
development of ACP countries (including the ESA countries), (ii) their smooth and gradual
integration into the global economy, and (iii) the eradication of poverty.
The specific objectives of the EPA for ESA countries are:
(a) promotion of sustained growth;
(b) increasing the production and supply capacity of the ESA countries
(c) fostering of the structural transformation and diversification of the ESA economies and
their diversification to allow them to be more competitive globally; and
(d) promotion of regional integration.
2.1.2 The Principles of EPA
The main principles of the EPAs as laid down in the CPA include:
 serving as an instrument of sustainable development,
 support for regional integration,
 preservation of the Lomé acquis
 compatibility with the WTO rules, and
 special and differential treatment (SDT).
2.2 THE CONFIGURATION OF THE NEGOTIATIONS
The ESA group is composed of 16 countries shown in Box
2.1. All these countries are members of the COMESA.
The Group excludes some members of COMESA, namely
Angola, Egypt, Libya and Swaziland1. The ESA
configuration is a heterogeneous and diverse grouping and
the countries that constitute it are at unequal stages of
development. 12 of the 16 members are classified as
LDCs. The majority consists of highly-indebted poor
1
Angola and Swaziland are negotiating in SADC, while Egypt has already negotiated an Association
Agreement with the EU.
Box 2.1: The ESA Group
Burundi
Comoros
D R Congo
Djibouti
Ethiopia
Eritrea
Kenya
Madagascar
Malawi
Mauritius
Rwanda
Seychelles
Sudan
Uganda
Zambia
Zimbabwe

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4
countries and 3 of them are small island vulnerable economies. This distinction is important
because, the LDCs do enjoy duty and quota-free access to the EU through the Everything-But-
Arms (EBA) initiative, whereas the dominant economies are non-LDCs (Kenya, Mauritius,
Zimbabwe and Seychelles) and therefore still face significant tariff barriers to the EU in certain
sectors. These two groups of countries therefore have differing concerns when it comes to gaining
access to the EU market, which may not be easy to bridge. Secondly, within the ESA group,
members have more or less similar production structures, which make reduction of intra-regional
tariffs a very sensitive issue, especially for the economically weaker members.
Within the ESA group, there are separate regional groups in operation creating problems of
overlapping membership. There are at least three overlapping economic integration blocks, all of
which have different political and economic priorities. The main regional integration blocks with
a trade policy agenda are: the Common Market for Eastern and Southern Africa (COMESA), the
East African Community (EAC), and the Southern African Development Community (SADC).
COMESA has a Free Trade Area with 13 members and is working towards a customs union in
2008. The EAC launched its customs union in January 2005. SADC plans to have an FTA in
2008 and a customs union in 2010. The Indian Ocean Commission (IOC) and the
Intergovernmental Authority on Development (IGAD) are other, but smaller regional
organizations which are sub-groups of the larger COMESA integration scheme and follow its
overall regional integration agenda.
It is important to note that the EU is ESA’s largest trading partner. Total value of trade flows
between this group and the EU is about 10 billion per year (EC, 2005). Exports to the EC are
dominated by a few products such as fish (both marine and freshwater), textiles, diamonds,
vegetables, sugar, cut-flowers and tobacco. In 2004 ESA exports represented 5.1 billion, while
ESA imports were 4.8 billion (EC, 2005). Agriculture still represents more than half of ESA’s
exports. Overall, ESA exports remain largely confined to agricultural and primary commodities.
2.3 THE STRUCTURE AND PROCESS OF THE NEGOTIATIONS
In December 2003, the ESA ministers established the relevant negotiation structures and
organisations as shown below. The ESA negotiating structure has three main levels, namely (i)
national, (ii) regional, and (iii) the negotiation.
 The national level: Each country has a National Development and Trade Policy Forum
(NDTPF), which is multi-sectoral and has representatives of both the public sector and non-
state actors. Chaired by the Permanent Secretary of the Ministry responsible (usually for
trade), the NDTPF is responsible for formulating a national position in each country which is
then presented at the regional level.
 The regional level: At the regional level negotiations are held in the Regional Negotiating
Forum (RNF). The RNF is the technical preparatory organ of the ESA group responsible for
preparing negotiating briefs that are used by the region’s negotiators in negotiations with the
EC. The RNF meets four times a year to consolidate and harmonize national views and
interests which seek to advance development and regional integration agenda.
Between the national and regional levels are the dedicated sessions, which are technical in
nature and serve as a useful tool for refining positions on different issues. Several dedicated
sessions have been convened on different clusters – on services, investment, SPS, fisheries etc.

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5
 The negotiating level: The negotiating level is made up of two sub-levels. The first one is
made up of ambassadors (from the ESA region) and senior officials (from the EC).
Negotiations at this sub-level take place in six clusters with one ESA ambassador accredited to
Brussels (supported by two alternates) as lead spokesperson in each cluster. The second sub-
level of negotiations (where first level negotiations will be ratified and first level impasses
resolved, (where possible) is made up of Ministers (from the ESA region) and Trade
Commissioner (from the EC). Negotiations at this sub-level take place in six clusters with one
Minister from the ESA region (supported by two alternates) taking the lead as spokesperson in
each cluster. The Ministers and the EC Trade Commissioner meet twice a year.
The regional integration organisations (COMESA, EAC, IOC and IGAD) provide secretariat
services to the negotiating structures above the national level, with COMESA taking the lead.
However, it is notable that the involvement of the EAC Secretariat in the EPA process has been
conspicuously absent. This Review was informed that this is in part attributed to capacity
problems at the Secretariat as well as other factors. The non-state actors are represented at the
national level through participation in the NDTPF and through one or more organisations of non-
state actors at the regional level. Liaison with other negotiating regions is done both bilaterally
and through the ACP follow-up mechanism.
A Regional Preparatory Task Force (RPTF) was set up to examine the strategic link between EPA
negotiations and development cooperation, with terms of reference being agreed in May 2004.
Formal negotiations between the ESA region and the EU were launched on February 07th
, 2004.
Since that time, developments have taken place in three key areas, namely (i) internal ESA
preparations, (ii) EU support for regional preparations for EPA negotiations and wider
preparations for adjustment, and (iii) ESA-EC negotiations. Of these three, the most intensive
have been the ESA preparations for negotiations. As many as 10 meetings have taken place at
RNF level, dealing with: the state of preparations for negotiations at the national level and
support for this process, establishment of the TORs for the RPTF. In addition, detailed work has
been undertaken on the so-called regional fisheries agreement, development issues, market access
issues, trade-related issues, etc.
In order to focus the negotiations, a draft EPA text was drawn up as a basis for detailed
discussions. The draft recognizes the vulnerability of the ESA regional economies in the context
of trade relations and gives priority to building and consolidating the young and fragile regional
markets. In this context, it proposes a radically different level of product coverage and time frame
for implementation of tariff reductions to that currently under consideration by the EC. It suggests
a total of 60% product coverage subject to tariff elimination, implemented after a 10-year
moratorium, designed to allow the consolidation of the regional markets over a 25-year period.
Though not yet complete, the text also will explore the establishment of pre-emptive safeguard
provisions to avert any threat of market disruption during the period of transition as well as the
establishment of distinct financial instruments to address the profound supply-side constraints
faced in the region. The first text-based negotiations were held in September 2006 in Mombasa.
The text has been criticized because (a) some important issues (e.g. concepts, terminologies,
interpretations, etc) were not agreed before the drafting; (b) the drafting itself did not involve
trade lawyers, (c) there are too many repetitions and irrelevancies, (c) its mixing of form with
substance, etc. In our view, while these are legitimate criticisms, this is the first attempt at
producing a working document. It is interesting to note that when Egypt was negotiating its
association agreement with the EU it produced not less than 10 texts (SEATINI, 2004)! Indeed,
for ESA this may not be the only one, but more improved versions will be prepared. It is

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6
important that the ESA negotiators take note of the comments and criticisms made on the various
versions of the text.
There have been concerns in the preparatory process over the effectiveness of the consultations
and preparations in terms of equipping the negotiators to deal effectively with the EC on the
multiplicity of complex issues that have to be addressed. As a result, there have been suggestions
and conclusions that the EC side is “calling the tune” and “forcing the pace”, which might lead to
an agreement that is poorly suited to the region’s development needs.
2.4 THE SUBSTANCE OF THE NEGOTIATIONS
The substance of negotiation is contained in the ESA negotiating mandate to which the EC
agreed. Accordingly, the negotiations have centred on six main areas also known as clusters.
These are: development cooperation, market access, services, agriculture, fisheries, and trade-
related issues.
2.4.1 Development
The ESA group has strongly argued that development is at the core of the EPA. Cooperation in
this area should aim at structural transformation of the region by establishing a strong,
competitive and diversified economic base in the ESA countries, by promoting production,
distribution, transport, marketing, trade capacity and the region’s investment policies and
regulations. Against this background, ESA has put the following issues for negotiation:
 Policy and regulatory framework: This includes (a) development of a comprehensive
programme to address domestic regulatory and administrative factors of the poor competitive
position of the region’s producers; and (b) modernization and decentralization of ESA
countries’ public administrations, including the overall organizational efficiency of the
legislative and institutional framework, revenue collection, customs administration, etc.
 Production, distribution, marketing and transport: This includes (a) the establishment of a
special programme to promote the development of activities in production, processing,
marketing, distribution and transportation of commodities, and (b) establishment of a
mechanism to restructure, modernize, upgrade and rehabilitate the region’s main transport and
communication links both internally and with the outside world.
 Financial resources: This includes: (a) a more transparent process of approval and
disbursement of EDF financial resources, which takes into account the needs and concerns of
the NAOs and RAOs to facilitate access to the EDF resources, whilst maintaining the principle
of sound management of the same resources, and (b) commitment from the EC to allocate
additional resources to those committed under the EDF 9 to the EPA process to take account
of: (i) the expected loss of revenue as a result of liberalization, (ii) the costs of adjustment and
(iii) the removal of supply constraints.
 Financial cooperation: This includes: (a) the development and implementation of an
“Adjustment Facility” to act as a mechanism through which budgetary support is provided to
ESA countries to allow them to continue with the economic liberalisation programme
necessary to the implementation of an EPA; and (b) the cancellation of all debts owed by ESA
states to the EU and its member states.

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7
 Investment: This includes (a) provision of sufficient financial resources for the rehabilitation
of existing, and construction of new, infrastructure particularly in the transport and energy
sectors, resulting in the establishment of an Infrastructure Investment Fund in addition to what
is provided for under the EDF, which can finance regional and national infrastructure
programmes; (b) utilization of the EIB Investment Facility to benefit the region, (c) setting up
an appropriate investment instrument which will encourage European investment in the ESA
markets by supporting EU private sector in managing risks (including risk-sharing) associated
with foreign direct investment; (d) setting up financial instruments, which would reduce the
cost of finance for the EU private investors in the ESA markets; (e) development of a
programme to improve the overall financial environment of the ESA countries in terms of (i)
diversification of financial instruments, (ii) strategic alliances between ESA and EU investors.
 Technology transfer and knowledge-based systems: This includes a programme of activities
aimed at improving the utilisation of technological information and knowledge required to
enhance the trade and development capacities of ESA countries; and (b) a programme to
support the further development and strengthening of the use of information and
communications technology (ICT) in the ESA region.
 Natural resource management: This includes a programme of activities aimed at improving
the utilization of the region’s natural resources, including water harvesting and preservation
methods to meet the development needs of the region.
 Mining and mineral resource management: This includes (a) development of a special
programme to support mining and mineral resource development in the ESA region, including
cooperation in research and technology transfer as well as making mineral resources and geo-
science information accessible for exploration and mining investment (b) creating, through
cooperation with EU firms, a mutually beneficial climate for attracting investment in the
sector, including the SME sector; and (c) development and implementation of a mechanism
for addressing vulnerability to mineral export dependency.
2.4.2 Agriculture
Agriculture is very important for the ESA region as the mainstay for the region’s population.
Agriculture contributes significantly to the region’s efforts to reduce poverty and attain the UN’s
Millennium Development Goal (MDG) number 1 (which seeks to reduce hunger and poverty by a
half by 2015). Against that background, ESA has chosen to negotiate:
 Improved special and differential treatment (SDT) to ensure increased flexibility for
implementation of an EPA;
 Preservation of the benefits obtained under EBA to ESA LDCs;
 Preservation and improvement of existing market access for ESA countries, while taking into
account existing commodity arrangements, timeframes, tariff reduction percentages, and the
need to limit loss of benefits arising from the erosion of preferences;
 Specific agricultural safeguards, given the sensitivity of agriculture;
 A programme to build capacity in the agriculture sector;
 Commodity agreements for the importation into the EU of part of the ESA production of
commodities in order to ensure a fair remuneration to ESA producers and a mechanism to
provide insurance to absorb the volatility in prices of commodities.

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8
ESA countries are keen to use the EPA as a source of funds for public investment in key areas
such as agricultural research, extension services, training, infrastructure development, as well as
targeted investment in some key growth sub-sectors of the agricultural sector. In addition, ESA is
interested in ensuring food security and sustainable agricultural development, elimination by the
EU of domestic support for its farmers under the CAP, particularly those subsidies that affect
goods of export interest for the ESA region. ESA is also keen to ensure support and assistance to
net-food import countries the region, reducing commodity risks and vulnerability for ESA
producers and maintenance of commodity protocols of the Cotonou Agreement. ESA has also
proposed preparation and implementation of an ESA regional agricultural policy and regional
market for agricultural products to be underpinned by regional preference. It also wants a
programme to be implemented on PMDT in order to add value to the supply chain, which is
critical for the structural transformation of the economies of the ESA region, thus reducing their
dependence on exports of a limited number of agricultural commodities.
2.4.3 Market Access
ESA contends that market access need not be viewed as an end in itself, but rather, it should be
linked strongly to the development concerns of the region. The ESA countries already enjoy 98%
duty-free and quota-free market access to the EU, while the 12 LDCs within the group has full
access under the Everything-but-Arms (EBA) arrangement. Nonetheless, the ESA region has
interests in a number of areas, particularly in agriculture. One of these relates to the rules of
origin (ROO) where there has been agreement to have an all-ACP approach. The key demand is
to have simplified ROO with in-built asymmetries in favour of the private sector in ESA.
Furthermore, under this cluster, ESA is pushing for capacity building and development of the
region in the area of SPS. The emergence of the EU’s stricter food safety policy since 2000 has
brought about new challenges for the ESA exporters (in ensuring compliance of their production
with EU safety standards) and national authorities (ensuring compliance with EU standards of
local exporters). There are very real financing costs associated with meeting these challenges both
at the level of the private sector and ESA governments. Indeed, the level of the financial burden
should not be underestimated. At the level of the private sector operators alone it has been
estimated that SPS measures can represent between 1% and 10% of company’s export turnover2
.
The ESA has also demanded full market access to the EU and has offered in turn to gradually
open its market over a transitional period of 25 years, with an initial 10-year moratorium, while
maintaining a list of sensitive products and a safeguard clause.
2.4.4 Fisheries
In the fisheries cluster, ESA is negotiating inland as well as ocean fisheries. As far as inland
fisheries are concerned, ESA is interested mainly in (a) ensuring improved market access of
fishery products into the EU market; (b) improving competitiveness to meet EU standards and
SPS requirements, while at the same time ensuring that the industry is sustainable. (c) It is also
interested in a programme to encourage development and sustainability of inland fisheries,
including small-scale fish farming to ensure food security. With regard to ocean fisheries, ESA is
keen to enhance what has been agreed in the framework of already existing fisheries agreements
2
It is interesting to note that the issue of financial burden of new food safety standards was a source of
concern to the EU Agricultural Ministers when the new food safety policy was introduced in 2000.

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9
and establishment of a framework within which future bilateral agreements between the EU and
ESA will be negotiated. ESA is also mandated to negotiate, among others:
 Commitment by EC member states having access to ESA surplus fish resources to
transparency and full disclosure of catches and supply of all data to enable ESA coastal states
to effectively manage their resources, as well as financial and technical support from the EC to
ensure sustainable and responsible management of EEZ as per the FAO Code of Conduct;
 Allocations of financial resources for the sustainable development of marine and inland
fisheries, particularly for research, infrastructural development, processing and marketing;
 A programme of support for national and regional efforts to combat IUU fishing in general;
 A programme for promotion and strengthening of regional partnerships, strengthening of
systems and capacities for collecting, processing and sharing of data on fish stocks,
ecosystems and the economic and social contribution of the fishery sector;
 Obligatory measures for surveillance and control in all agreements.
2.4.5 Services
The CPA (Article 41.5) recognizes the need for ACP countries to first build their capacity in the
area of trade in services while Article XIX of the GATS agreement provides for the progressive
liberalization in services. The ESA negotiating mandate recognizes that there is no firm
obligation under the CPA to liberalize trade in services in the context of EPAs, but is cognizant of
the existence of agreement on the objective of extending the partnership to encompass
liberalization as provided for in Article 41.4. In this regard, liberalization of trade in services
within the ESA EPA should be progressive, in principle based on the positive list approach and
adapted to the level of development of the ESA countries concerned, both in overall terms of their
services and sub-sectors and to their specific constraints, and should be underpinned by the
principles of SDT, asymmetry and positive regional discrimination.
Against this background, ESA negotiators were mandated to negotiate: (a) establishment of a
special safeguard mechanism, (b) establishment of a sound regulatory framework, (c) time and
support (financial and technical) to carry out baseline surveys upon which potential initial offers
could be made to the EU, (d) a specific package for the progressive opening of the EU market for
services under mode IV and for the development of a coherent policy regarding mode IV; (e)
support to strengthen ESA countries’ capacity in the supply of services, with special reference to
labour, business, distribution, finance, tourism, culture, health and construction and related
engineering service with a view to enhancing competitiveness; and (f) measures that will allow
the region’s citizens’ easy access to ICT as outlined in Article 43 of the CPA.
2.4.6 Trade-related issues
Negotiations in this area are based on the provisions of the CPA, particularly Articles 44 to 52
and on the need to ensure increased cooperation in this area, enhanced capacity building and
technical assistance. ESA negotiators have been mandated to emphasize the fact that there is need
to build adequate legal and institutional capacities in the ESA region before any disciplines in
these areas can be envisaged for negotiations.
With regard to the “Singapore Issues” (competition, procurement, trade facilitation and
investment), the ESA negotiating mandate stresses the need to continue with the educative
process at the all-ACP level. Given the importance of trade-related issues, as reflected in the

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CPA and the progress made in their development at the regional level as part of the integration
process, the ESA region is mandated through its RPTF to study how to build capacities in this
area and subsequently decide on whether or not to incorporate trade-related issues into the ESA
EPA negotiations. The ESA Group mandates the COMESA Secretariat to identify those areas,
which require further studies to submit appropriate proposals to the RNF.
In assessing the subject of negotiations, it would appear that while there may be justification,
some of the demands by ESA may be difficult to defend, because they may be perceived as
unrealistic. Limiting the loss of benefits arising from the erosion of preferences, preservation of
the benefits obtained under EBA, and commodity agreements are cases in point. As some studies
have indicated, the erosion of preferences is irreversible. The value of preferences is eroded under
the impact of two phenomena. Firstly, the EU has been progressively lowering its trade barriers
consistent with the GATT framework in favour of all the WTO members or a specific group of
countries (e.g. EBA). At the same time, it is also increasingly concluding preferential agreements
with a number of third countries (e.g. Eastern Europe, Turkey, Morocco, Tunisia, Egypt, South
Africa, etc). The protocols themselves are being affected by factors over which the ACP countries
have no control. Secondly, there are arguments that the types of preferences granted are becoming
“outdated”: tariff and quantitative restrictions are no longer the only instruments of protection by
the EU. Other obstacles, such as veterinary and quality standards, anti-dumping measures or the
distortions caused by national legislation, play an increasing role against which preferences
inherited from previous arrangements with the EU may be difficult to sustain.
It is also important for ESA to remember that the preferences are not compatible with WTO rules
and their legitimacy is therefore subject to challenge. This has been the key argument put forward
by the EU to justify the ending of the non-reciprocal preferences. Preferences violate the principle
of non-discrimination established by Article I of GATT, where all preferences granted to one
member must automatically be extended to all others.
2.5 NEGOTIATION WORK PLANS / ROADMAPS
The ESA-EU Ministerial Meeting held in February 2004 in Mauritius adopted a Joint Roadmap
for the EPA negotiations with three distinct phases indicated below:
(a) Phase I: Setting of priorities (March – August 2004);
(b) Phase II: Substantive negotiations (September 2004 – December 2005); and
(c) Phase III: Continuation and finalization (January 2006 – December 2007).
2.5.1 Phase I: Setting of priorities
During Phase I, the ESA group organized itself according to the structure described in section 2.3.
It was agreed that during this phase, the NDTPFs would hold their first meetings to agree on the
composition, rules of procedure, the terms of reference, work programmes, and funding
mechanisms. The RNF, on its part, would meet to agree on the rules of procedure, finalize its
work programme (issues and phasing of the next Phase) and agree on the composition of the
technical teams to support the Lead Ambassadorial Spokespersons. During this phase, too, studies
on issues of relevance to the EPAs would be conducted.
It was also agreed, as part of the preparations for the negotiations with the EC that three
representatives from each NDTPF and representatives from the participating regional
organizations would go through an orientation session of one week, beginning in March in

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Brussels, to outline the operations and functions of the EC, (the Commission, Council, European
Parliament, etc). Furthermore, for purposes of coordination, the ESA and EC would establish a
Regional Preparatory Task Force (RPTF). The RNF was mandated to prepare the terms of
reference for the RPTF and determine its composition and functions. This phase also agreed that
the first meeting of the at the ambassadorial/senior officials level in July 2004.
2.5.2 Phase II: The Substantive negotiations
According to the Joint Programme, during this phase, it was intended that negotiations would
cover all issues of relevance to the EPA. It was expected that by end of this Phase, an outline
EPA would be agreed on.
2.5.3 Phase II: Continuation and Finalization
It was agreed that at during this phase, substantive negotiations would continue, if necessary, and
areas of disagreement to be revisited, compromises reached and the EPA agreement finalized and
ratified by all parties. ESA countries and the EC would use this Phase to enact any necessary
legislation to allow the EPA to come into force in January 2008.
2.6 CONCLUSIONS
From the foregoing analysis of the state of play the following conclusions can be made:
1. The objectives and principles adopted by the ESA group in its negotiation with the EC
logically derive from the CPA, the negotiating mandate and the regional integration agenda.
The objectives and principles are the cornerstones on which the ESA EPA will be built. They
are largely generic and to that extent the challenge for the negotiating parties will be how to
correctly and appropriately interpret them in the process of negotiation and uphold them in
the course of implementation of the EPA.
2. EPA represents a radical shift in the relationship between the EU and the ESA countries (and
indeed all the ACP countries). This shift is reflected in the movement from non-reciprocity
under the Lomé Convention, to reciprocity in the CPA and the EPA. This new dimension is
the one which is compelling, for the first time, the ESA and all the ACP countries to negotiate
a trade agreement with the EU, which contains binding commitments on both sides.
However, reciprocity is also the most controversial and difficult requirement in terms of
development for the ESA countries. It is clear that implementing a reciprocal free trade
agreement will be extremely difficult for the ESA countries whose level of development
firstly lags far behind that of the EU and, secondly, varies within the ESA region. Reciprocity
could have unforeseen effects on the ESA region particularly in terms of premature
liberalization by these countries.
3. The substance of negotiation is also guided by the CPA and the negotiating mandate. ESAs
offensive interest is primarily in development cooperation and to that extent development is
at the core of the ESA EPA negotiation. In our opinion, this is logical because there can be no
market access or trade in services without development. The challenge, however, is how to
finance this development, given the inadequacy of the current funding arrangements under
the EDF. There is general consensus in the international community today that trade
liberalization alone cannot result in development. There must be adequate finance to address
supply-side constraints, (including transport infrastructure, utilities, marketing, etc). Such

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financing ideally must be provided on a long-term basis in a predictable manner and in
amounts that are critical to break the various vicious cycles.
4. The negotiating structure is largely participatory and representative, involving various
stakeholders at national and regional level. While the structure has made some progress in
keeping the negotiations on track, there is less clarity as to who shoulders the overall
responsibility for the negotiations. Moreover, at the national level, the capacities of most
NDTPFs of most ESA members to effectively feed into the RNF remain extremely weak, due
in part to lack of guidance as well as human and financial resources.
5. In spite of putting in place an elaborate work plan, the negotiations are generally behind
schedule. The reasons for this are discussed in Part 3 but have included (a) the EU’s
prevarication (going back and forth) on crucial issues (such as development, fisheries), (b) its
untimely and selective responses to key issues raised by ESA group (especially through the
draft EPA text), (c) the late commencement by the ESA region on Phase II, mainly due to the
challenge of putting in place negotiating structures and building of regional harmony and
positions, and not least is (d) the slow disbursement of EDF funds to expedite negotiations.
All these delays have filtered through the negotiation phases and have resulted in the fact that
to date, ESA is way behind schedule as per its mandate. According to the schedule, ESA was
supposed to have five years of negotiations. However, negotiations were only launched in
February 2004, which in effect means the region has had just three years of actual
negotiations.

III THE MAIN CHALLENGES AND CONCERNS IN THE
NEGOTIATIONS
As the EPA negotiations enter into the most crucial and last phase, challenges are continuously
emerging. Indeed, as many observers have noted, the negotiations are plagued with problems of
both content and process, and in their current form, the proposed EPAs may not deliver the
development promises to the ESA region. This Part attempts to articulate the challenges faced by
the ESA in terms of both the content and process.
3.1 FUNDING
The main challenge facing the ESA region is that of funding of the preparations for EPA
negotiations, particularly the inadequate and untimely availability of funds to expedite the
negotiation process. Currently, the funding for the negotiations comes from various sources,
including the EU-funded Regional Integration Support Programme (RISP), the Hubs and Spokes
Project, the Project Management Unit (PMU), etc. Member countries only contribute to the
remuneration of Chief Technical Advisor (CTA). However, all in all, the funding for preparation
of the EPA is inadequate. Information obtained by this Review shows that at national level, most
NDTPF are not well funded and hence cannot carry out all the activities for effective preparation
of EPA negotiations. A few of these (such as Kenya’s KEPLOTRADE and, to some extent,
Uganda’s UPTOP) have been able to benefit from specific project funding aimed at trade policy
development, but the majority are handicapped by lack of adequate funding. The situation has not
been any better at regional level. Lack of adequate resources and the over-reliance on the EC has
resulted in the suspension of five ESA meetings.
3.2 THE NEGOTIATION STRUCTURES
The negotiation structure described in section 2.3 above has been instrumental in moving the
ESA EPA agenda forward and generally highly participatory and representative. In spite of this,
however, there is a concern that the ESA negotiation structure is rather distorted. Many
stakeholders believe that the ambassadors, some of whom have conceded to the Review, are not
technical enough and have no skills to match those of their counterparts from the EC side. The
Director General DG Trade of the EC, for example, is a technical official at the level of a
Permanent Secretary. So, there is a disparity in terms of technical familiarity with issues between
the two sides that does not favour the ESA3
.
Furthermore, there is a problem of getting the Permanent Secretaries involved in the negotiations.
Permanent Secretaries used to be very instrumental in the RNF meetings, but they have become
less and less involved in these deliberations. This has further reduced the effectiveness of the
3
In fact, it has become clear that it is only the ESA region that has handed these negotiations to
Ambassadors. The Lead Negotiators in other regions are technical officers. There have been views
suggesting that the use of Ambassadors is alright with some arguing that some of these did participate in
the negotiation the CPA. In fact, they argue, that negotiations do not occur at a technical level. In our
opinion, this notion is a fallacy at best and cannot withstand any serious criticism. The fact of the matter is
that if the technical groups on both sides of the negotiation table came to some agreement on a point, it
would be very unlikely that the Ambassadors would re-open the debate.

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RNF and has slowed down its decision making process (since absence of Permanent Secretaries
means that the available junior members heading country delegations cannot take major decisions
on issues). In addition, there has been a communication gap among the structural pillars, notably
between the Lead Ambassadorial Spokespersons and the Lead Ministerial Spokespersons. At the
same time, there has been little or no feedback by the RNF delegates to their NDTPFs.
Finally, the structure has been criticized on account of the poor overall responsibility for the
negotiations. In other words, within the structure, no one seems to take responsibility for the
success or failure of negotiations. This has largely been viewed as a double-edged sword.
3.3 THE NEGOTIATING STRATEGY AND CAPACITY
The ESA strategy has generally sought to build consensus among the ESA countries as well as
the negotiating partner. It has also been consistent with the negotiating mandate and it has
emphasized development. Finally, the strategy has tended to adopt the “first-mover advantage”.
This has been reflected by the fact that ESA prepared the EPA negotiation text and sent it to the
EC for comments. The idea was to compel the EC to react to ESA positions and to direct the
course of the negotiations.
In spite of this, however, there is a concern that the ESA does not have a clear method of work for
identifying its concessions or its fallback positions. Not much time has been spent on developing
the ESA negotiating strategy, which, next to the lack of legal input in the negotiation text, is a
major flaw. One cannot help feeling that the “the cart was put before the horse”, given that ESA
first developed a text and now needs to go ahead to articulate what can be traded away and under
what conditions. Regarding the sequencing of issues for negotiation, ESA (through various
RNFs) stated that while it had offensive interests in market access, trade-related area, and
services, and it would (as a matter of strategy) ensure that these issues are negotiated after a clear
position on development had been found. Nonetheless, this strategy has been not been followed
consistently throughout the negotiations. In most cases market access negotiations have tended to
precede or even run concurrently to negotiations on development as was evident in Mombasa.
Finally, the ESA group does not seem to be firm in asserting its negotiating positions and is very
prone to abandoning them at the slightest hint of “a pie in the air” or opposition from the
negotiating partner. The Mombasa 1st
text-based negotiation meeting was a case in point. The EC
was clearly opposed to discussion of the development dimension as reflected in their comments
on the ESA EPA text. On learning of the threat by ESA to abandon the negotiations, the EC
delegation had informal meetings with the Lead Ambassadors, after which they informed the
meeting that the EC was committed to development. This was met by celebration by ESA
negotiators claiming that “EC are now walking the walk and talking the talk”. This celebration
was premature as the technical discussions clearly showed that key issues such as development
and funding were still heavily bracketed in spite of the ECs “commitment”. Clearly, the ESA
negotiators had not internalized the carefully worded statement of the EC DG Development.
Analysis of the meeting shows further that apart from nothing on development, ESA region
unknowingly conceded some positions in other clusters such the fisheries and market access.
3.4 STAKEHOLDER BUY-IN
The key stakeholders to the ESA EPA are member states, private sector, civil society and all other
relevant national players. An analysis of their involvement throughout the EPA negotiation
process shows that they have been considerably represented (as per the ESA negotiation mandate

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as well as the CPA Article 2). The NDTPFs and RNFs are therefore by nature participatory. The
involvement of civil society in the negotiations has also been considerably structured (through
NDTPFs). Indeed, in some instances, the ESA Secretariat has even funded at least two members
of non-state actors (one from private sector, one from civil society).
In terms of countries’ participation in EPA negotiations, some have been more active than others
in preparing their country negotiating positions by reaching out to and involving the various
stakeholders, while others have been less successful in this regard, in part, due to resource
constraints, but also on account of limited involvement of the key stakeholders, their commitment
to the EPA notwithstanding. This has inadvertently given the impression that negotiations in the
ESA are being driven primarily by a handful of countries. A frank assessment by some observers
of the Dedicated Sessions and the RNF process, suggests that debate is actually often between the
same set of countries – primarily the non-LDCs in the ESA Group - with a handful of LDCs
occasionally intervening. The result is that the needs of the LDCs are lost in the internal
negotiation process. This creates a legitimacy problem with the text and output, if the non-LDCs
in the region are able to impose their interests over those of the LDCs. This is an issue that was
raised by domestic stakeholders and in our view requires urgent attention if there is to be true
ownership of the final text.
A related problem is the domineering effect of the Lead Ambassadors, which tends to
overshadow the participation of other participants, at the RNF meetings. While they are “Lead
Spokespersons” by definition, they speak on behalf of the RNF which is a technical forum.
Therefore they need to do more listening at the RNF deliberations instead of dominating the
meetings. While it is true the Lead Ambassadors are informed, knowledgeable and experienced, it
is important that they leave space for the flow of ideas from other members in the deliberations.
Another issue is the lack of effective participation by most Francophone ESA member states in
negotiations. The main problem has been the language barrier. Many of them cannot speak
English and have complained about the often poor translation and interpretation services at most
EPA negotiating fora. Almost always the French versions of official documents, including the
final reports of key meetings, come late and when they do they are not devoid of grammatical
and/or contextual errors. This language barrier often excludes them from effective participation in
crucial discussions.
Other key stakeholders such as parliamentarians have not been effectively integrated in the EPA
process both at national and regional level. This is a major flow, given that in almost all countries
these are the key decision makers and are the ones to oversee the ratification process of trade and
other agreements of national importance. Encouraging and soliciting their structured and
sustained participation can be done through trade committees (at national level) and the ACP
Joint Parliamentary Assembly (at regional level). Cabinet too has not been fully involved at least
by way of regular information and briefing, yet as the executive arm of government they have to
take major decisions regarding any agreement, including EPA.
3.5 COHERENCE, CONTINUITY AND CONSISTENCY
The ESA group has been commendably coherent and consistent in their negotiation with the EC.
There has neither been a significant deviation from the ESA mandate, nor major inconsistencies
and incoherence in positions over the period of negotiations to date. In similar manner, the region
has also been consistent in demanding an EPA with a development component. They have
maintained that an EPA without development, devoid of ability to equip member states with

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23
capacity to compete and devoid of development finance, will not be viable, sellable and hence
will not be signed by ESA member states.
The above notwithstanding, the negotiating position of ESA as a group, is sometimes
compromised by lack of consistency in the delegations. At RNF level, delegates are always
changing, with many attending for the first time. Some have admitted not following in the
deliberations for lack of understanding of issues. Many are not even well prepared for these
meetings. This tends to disrupt the smooth engagement and continuity in rapport and
understanding around the EPA issues.4
This is the more serious issue considering the fact that
capacity building and understanding on EPAs is very much of a challenge. Negotiators such as
ambassadors have also been replaced5
. By the end of the year two ESA ambassadors will be
leaving Brussels. This tends to disrupt the negotiations and capacity building process6
. While,
change is inevitable and often desirable, it is this Review’s contention that this is one issue that
needs to be addressed at national level.
3.6 THE ESA CONFIGURATION AND LEGAL MANDATE
Section 2.2 highlights the configuration of the negotiations. As can be seen from Box 2.1, while
all the ESA countries are largely members of COMESA, the group does not negotiate on behalf
of COMESA per se. Excluded from this group are three COMESA members, namely Egypt,
Libya and Swaziland. This means when COMESA meets, the delegates from the three countries
are present, but they do not participate when a matter of ESA-EU EPA negotiations comes on the
agenda. The EC has raised concerns that they need to be clear and sure who they are negotiating
with, as this has important legal implications. This Review was informed that the ESA
configuration was created by a directive of the COMESA Heads of State. This notwithstanding, it
is also clear that ESA does not have a legal mandate, no binding commitments and is, in fact, a
“marriage of convenience” with no historic or economic logic. This view seems to be vindicated
by the position of the DRC, which does not seem to be clear where it belongs as it is negotiating
in both ESA and CEMAC. Besides, ESA as group does not have a common external tariff, which
is a key requirement for the EPA negotiations.
It must be noted that the ESA countries recognize this dilemma and have made efforts to find a
solution to it. One suggestion has been to rename the configuration from ESA to COMESA EPA.
However, there seems to be no consensus on this too. Renaming it to COMESA-EPA has even
worse complications. For a start, it commits all COMESA countries including those that are not
negotiating an EPA. Secondly, the COMESA-EPA would be complicated by the Egypt-EC
agreement given that the latter cannot belong to two FTAs. Thirdly, a COMESA-EPA would
complicate access to Aid-for-Trade funds announced recently by the EU for countries
implementing the EPA given that some COMESA countries are not negotiating and EPA.
This Review is of the opinion that this issue must be tackled in a highly consultative manner, first
among COMESA-ESA member states then among the non-ESA COMESA member states to find
a viable solution. More importantly, due care should be taken to ensure that this process does not
4
One delegate from ESA member states noted that “…at time Ministers don’t seem to appreciate the need
for continuity in these negotiations. If you keep on attending RNF meetings they tend to think that you
are travelling too much and hence the need to give others chance to travel also”.
5
These are often recalled by their countries at the expiry of their tour of duty.
6
A possible solution to this is to have regional ambassadors solely in charge of EPA negotiations, from the
various countries. They may rotate, but will still remain influential in EPA negotiations.

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24
disrupt the COMESA regional integration programmes. In addition, adopting the name COMESA
for the EPA negotiating group should also be synchronized with the overall RECs rationalization
process at the continental level. One of the biggest challenges in renaming ESA group to
COMESA-EPA group is that of ensuring that the institutional set-up at the Secretariat subject
EPA programs to regional integration programs. In other words, the institutional set-up still
remains relevant to non-EPA negotiating members of COMESA, such as Egypt and Libya.
3.7 OVERLAPPING MEMBERSHIP OF REGIONAL INTEGRATION SCHEMES
One of the challenges for the ESA EPA is the overlapping membership of the countries in the
region to various regional integration organizations. As noted earlier, the core group of the ESA
configuration is made up of COMESA members. However, not all COMESA members are in the
ESA group, while several of those in the group also belong to other regional integration
organizations such as the EAC (Kenya and Uganda), ECCAS (Burundi, DRC, and Rwanda),
IGAD (Djibouti, Eritrea, Ethiopia and Kenya), IOC (Comoros, Madagascar, Mauritius,
Seychelles) and SADC (Mauritius, Seychelles, Zambia and Zimbabwe). The inclusion of IGAD
and IOC member countries in the ESA group built around COMESA should not create major
technical problems since these organizations have broadly adopted COMESA’s trade
liberalization programme. However, the same cannot be said of the EAC and SADC, each of
which has a trade liberalization agenda that is different from that of COMESA. At the same time,
for the main regional blocks there are some differences in policies, leading to divergences in tariff
reduction schedules, rules of origin, etc, and potentially creating a complex set of incentives for
the private sector and investors.
The multiplicity of regional memberships creates difficulties for the ESA countries, since it
means they must comply with various tariff reduction schedules, rules of origin and other
liberalization requirements. For instance, countries that are members of both SADC and
COMESA must implement both the SADC Trade Protocol and the COMESA FTA, though the
two regional trade agreements offer different trade preferences. Similarly, the EAC has already
established its customs union. COMESA plan to establish one in 2008. However, we know that
no country may belong to two different customs unions, unless the two unions have equivalent
trade policies, including the same common external tariff, in which case the two could be merged.
This means, for example, that Uganda and Kenya would have to decide whether they want to be a
member of the COMESA or the EAC. The same is true for Tanzania with respect to its dual
membership of SADC and EAC.
In addition, Libya and Egypt are now full members COMESA. In joining COMESA, the two
countries wished to intensify political and trade relationships with Eastern and Southern African
countries. However, as the two countries are not ACP members, they cannot not participate in
EPA negotiations with the EU within the ESA configuration. The scheduling of the creation of a
FTA as part of the Euro-Med trade cooperation with the EU by 2010 complicates relationships
with the COMESA group further as Libya and Egypt would also belong to two different customs
unions with, in all likelihood, diverging common external tariffs.
The ESA configuration therefore has not solved the problem of overlapping membership and, as a
result, the requirement that the EPA process should be built on existing integration initiatives has
been difficult to satisfy. The so-called “variable geometry” of regional organisations complicates
the issue. EPA negotiations with the EU add another layer to these overlapping intra-regional
processes, since the new partnership agreement and related tariff reductions are to be negotiated
and implemented by ACP sub-regions and not individual states. This notwithstanding, it is clear

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25
that to discuss and EPA as a regional group would involve an agreement – and thus a prior
negotiation – between member countries on a common negotiating mandate and the delegation to
a supranational entity of powers to negotiate with the EC.
3.8 RELATING EPA TO WTO NEGOTIATIONS
The ACP guidelines for the negotiations of the EPAs note that, “EPAs are expected to be notified
to the WTO. It will therefore be necessary for the ACP to participate actively in the current
negotiations in the WTO so as not only to inject flexibility into the WTO rules, especially those
relating to regional trading arrangements, and to have the development dimension better taken
into account, but also to make the future EPA compatible with the WTO”. This is consistent with
one of the principles of the EPA. However, the suspension of the WTO negotiations makes it
difficult to craft an appropriate EPA. It is not clear when the talks will resume.
Assuming the EPA negotiations are completed in time, but the WTO negotiations resume after
December 2007, it will be too late to bring into the WTO rules the said flexibility, or to revisit the
EPAs to the make them compatible with whatever the WTO rules will come up with. This is
notwithstanding Article 37.7 of the CPA in its reference to “conformity with the rules then
prevailing”. Moreover, what is even more serious is the fact that the suspension of the WTO
negotiations has made the EPA negotiations complex, since without understanding what
commitments will be required of the EU multilaterally, it is hard to know the bargain that the
ESA or other regions are really negotiating.
The EC has committed itself to respecting “…their obligations assumed within the framework of
the WTO and to further the objectives of the WTO”. In spite of this commitment, the EC is intent
on continuing the EPA negotiations, although the WTO trade talks have been suspended.
Similarly, the issue of compatibility is contestable. The general understanding is that WTO
compatibility implies compatibility with Article XXIV of GATT. However, this article has been
challenged by the ACP countries seeking to have it amended to make it development friendly.
Hence emphasis on compatibility to this article in its current form will not be helpful for ESA and
other developing countries7
.
As noted earlier on, the EC’s position on a range of issues has also been marred by
inconsistencies and contradictions. It has largely argued that commitments under EPAs should
not commit the EC beyond the requirements in international agreements on those issues, yet in
some areas they require ESA countries to do exactly the opposite. For example, on fisheries, EC’s
stated position is that the FFA with ESA should not commit EC beyond what is contained in the
OTC and other related agreements, yet when they talk about EPA and WTO compatibility, their
focus is more on ensuring WTO-plus compatibility.
7
The ACP group presented a proposal to the WTO regarding its concerns as they pertain to Article XXIV.
However, to date ESA positions on trade-related issues are proceeding without taking this into account.
However, they need to be clear on the issue of synchronizing their position within the WTO with the
EPA negotiations. This is because most of the issues to be addressed in the ESA-EU trade relations are
still work in progress at the WTO, yet the ESA region has already developed positions on these issues.
Hence it may be prudent and less far-fetched for ESA countries to take the collapse of this round of
negotiations as an opportunity to make serious assessments of the EPA process as well as the draft text. If
the same ESA member states (in a bigger ACP grouping) rejected new issues under the WTO, what
makes them convinced that now is the time and EPAs (the fora) for negotiating these issues.

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26
3.9 CONCLUSION
The foregoing analysis shows that there are serious challenges to be overcome during the
negotiations. As we have pointed out earlier, the negotiations are plagued with problems of both
content and process, and in their current form, the proposed EPAs may not deliver the
development promises to the ESA region. This Review is an ideal time to turn the tide on the
proposed EPA. It will be recalled that in preparing for the Review, the EU pressed for a process
that would essentially avoid questions of content and would merely assess whether the
negotiations were on track for “timely completion” in December 2007. The ACP countries, on the
other hand, insisted that the Review must be “inclusive and consultative”, “conducted at national
and regional levels” and must include “the structure, process, substance of the negotiations, the
trade and development dimensions, as well as the capacity and the preparedness to conclude the
EPAs”. The ACP countries won the day. The challenge now is for the EU and ACP to make sure
the review recommendations are implemented to reflect the wording of this mandate.
It is clear from the foregoing analysis that the ESA countries are generally unprepared for the
conclusion of the negotiations. This is reflected in the reports of the NDTPFs to the various RNF
meetings. Some have not carried out impact assessment studies or those that have been carried
out have been substandard and cannot help in guiding the country positions. Many NDTPF have
reported challenges including institutional, financial and capacity problems. They have not been
able to sensitize the public about EPAs, as a result of which there remains limited understanding
about EPA and general hostility towards EPAs among many sections of the public. Key
stakeholders such as parliamentarians have not been involved. At the regional level, the
integration agenda which started well before the EPAs is yet to be finalized. The COMESA
customs union, which is a crucial ingredient of an EPA, is a case in point. In the circumstances,
the EPA will be seen to be rushing the regional integration agenda, although in principle EPAs
are supposed to support and not to disrupt regional integration agendas.

IV AN ASSESSMENT OF THE DEVELOPMENT ASPECTS OF
TRADE AND TRADE-RELATED PROVISIONS
4.1 THE DEVELOPMENT DIMENSION OF THE ESA EPA
Article 37.3 of the Cotonou Agreement gives some guidance on the issues that fall under the
development dimension of the EPA. It provides for support in “… capacity-building … of the
ACP countries … for assistance budgetary adjustment and fiscal reform, as well as infrastructure
upgrading and development for investment promotion”.
The development cluster is by far the most critical and controversial cluster and one that will
determine the success or failure of the EPA negotiations. The EC does not accept the ESA
position on development and has refused to negotiate the development cluster. The EC has
advanced three main arguments to back its position. First, that EPAs deal with trade and hence
development is already covered under the CPA. This argument is not accepted by ESA which
feels that there is no guarantee that the CPA, which expires in 2020, will be renewed, while EPAs
are a permanent feature (for an indefinite period) and as such must cover both trade and
development issues. For trade to be an engine of growth and development there has to be policy
coherence as well as resources to finance trade-related development aspects – such as
infrastructure, capacity building, etc.
Secondly, the EC argues that it has no mandate to negotiate development and has therefore
proposed limiting the EPA text to two very general paragraphs arguing that the rest of the text
under development constitutes programming and can be covered under 10th
EDF programming.
This view is not consistent with logic. By restricting development to the CPA provisions, the EC
is not being realistic and honest, especially in light of the fact that EPAs will last longer than the
financing provision under the CPA. So there is need for a financing mechanism for EPAs which
is pro-development as entrusting development to the CPA will not yield the desired results. The
stated objective of economic and trade cooperation (under CPA) is to enhance production, supply
and trade capacities. ESA is echoing that objective in the EPA text. ESA position on development
(as contained in the draft ESA EPA text) very much reflects the spirit of CPA provisions on the
same issue only that in the ESA EPA text development is unpackaged.
Thirdly, the EC suggests that the development chapter contains EC commitments to the ESA and
little or nothing for ESA, especially on regional integration. This too is not correct because the
integration agenda by the regional integration blocks within the ESA region is clear and on
course. There are already clear commitments to the EPA by the region in the context of their
regional integration agenda.
4.1.1 Supply Constraints
Most ESA countries face formidable challenges as economic entities due to a combination of
factors, such as the size of their economies, the small size of their populations, low GNPs, etc. In
nearly all of these countries, enterprises face constraints in producing goods competitively. Their
main supply-side constraints include unreliable public utilities (electricity and water supply), poor
infrastructure (poor road networks and railways, poor telecommunications), weak institutional
capacity (e.g. customs and policy-making bodies), low labour productivity (on account of poor
education and health systems) a shortage of human resources, etc. These factors do not allow

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28
these countries to expand their exports to external markets including the EU. Their participation
in the multilateral trading system is generally conditional on their ability to address these supply
constraints. While it may not be possible to draw a clear distinction among the ESA countries,
overall, however, the LDCs are affected more than the non-LDCs by these constraints.
How to address these problems and the sequencing of actions to address them has so far been a
matter of serious contention. The ESA region, and other ACP regions, has argued so far that the
supply-side constraints should be addressed first before introduction of free trade with the EU in
the EPA. The EC, on the other hand, has been reluctant to discuss development and maintains
that EPAs will promote more effective action in addressing the supply-side constraints by
opening up the ESA economies to competition. This, EC contends, will lead to more competitive
forms of production in the region, capable of promoting sustainable development.
In the opinion of this review, the ESA position is logical, since it is highly unlikely that a policy
shift in one area – external trade – will have such a profound effect on underlying causes of the
supply side constraints faced by the ESA countries. Indeed, trade policy reform will address some
policy-driven constraints, but will leave largely intact those constraints arising from low labour
productivity, remoteness from major markets, unreliable public utilities and poor public
infrastructure. As Heidemarie Wieczorek-Zeul, Federal Minister for Economic Cooperation and
Development, argues “… trade liberalization does not lead to increased export and reduced
poverty. Trade should constitute a coherent part of the overall development strategy of
developing countries. … In this regard, it is important to strengthen the economic environment
and institutions before liberalization is fully implemented, and the donor community should
contribute to this”8
.
As we know, however, to-date the EU aid programmes have been heavily focused on addressing
some public infrastructure constraints (particularly in the transport sector) and more recently on
promoting policy reform. The problems of low labour productivity and public utility provision
have received relatively minor attention. Yet these issues are central to the ability of ESA
producers to take advantage of the trade preferences provided by the EU. This can be seen from
the current debates over the EBA initiative. Studies have shown that most of these beneficiary
countries have not had the capacities to exploit the improved market access provided under EBA
due to limited supply side capacities.
One of the key challenges, therefore, for the ESA region is addressing these constraints in a
systematic and comprehensive manner. The ESA region has put in place programmes intended to
address these problems. They include (i) the adjustment facility, (ii) the infrastructure fund, (iii)
studies on mineral export dependency, external debt, inland fisheries, (iv) use of intellectual
property as a development tool, etc. In spite of these efforts, the ESA countries were still far from
realizing their objectives. To that extent, the EU had been requested to support the Priority
Investment Programme (PIP) and the COMESA Fund, which would address the issues of
infrastructure and the costs of adjustment.
4.1.2 Adjustment Costs
The introduction of free trade with the EU under EPA comes with adjustment costs for the ESA
region. The first set of costs relates to the restructuring of the human resource base. This has to do
with incorporating the human resource development aspects into all sector-based restructuring
8
http://www.inwent.org/ef/events/epa/07467/index.en.shtml

Review of the ESA EPA Negotiations with EU (Final Report)

Review of the ESA EPA Negotiations with EU (Final Report)

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