Poorest Countries Leading Way in Combating Climate Change, Keynote Speaker Tells Economic and Social Council Forum, Saying Days of ‘Business as Usual Are Over’
The “clock is ticking” with no time to waste in forging strong public-private partnerships to stave off grave climate change consequences by using innovative solutions to build resilient communities and reach those most in need, the Economic and Social Council heard today.
Under the theme “Partnerships for promoting opportunities, increased prosperity and sustainable development for all”, the day-long Economic and Social Council Partnership Forum focused on addressing the 2030 Agenda for Sustainable Development and Sustainable Development Goal 9 — building resilient infrastructure, promoting sustainable industrialization and fostering innovation. Central to discussions was promoting infrastructure development, particularly in Africa, the least developed countries, landlocked developing countries and small island developing States, which faced the largest gaps in that sector.
The days of conducting business as usual were over, said Mary Robinson, President, Mary Robinson Foundation — Climate Justice, delivering a keynote address. As world leaders had come to realize that climate change could not be tackled alone, it was in fact some of the poorest countries that were leading the way. Inspired by their call for a new era for development, addressing climate change and leaving no one behind, she said the question now was whether countries had a choice between economic growth and sustainable alternatives in, for example, building infrastructure. To answer that query, a new wave of infrastructure investment must provide a guide to supporting sustainable development.
However, she said, not all action that was good for the planet was good for people and climate justice needed to prevail. Local communities must be consulted, she said, providing examples of renewable energy projects that had infringed upon rights. To do so, partners from civil society could play a role.
She went on to say that strong partnerships could also help to meet the goals of the 2030 Agenda and the Paris Agreement on climate change if they involved States, civil society and the private sector.
Amina Mohammed, Deputy Secretary-General of the United Nations, in a video message, stressed the urgency of the task. “The clock is ticking and we have no time to waste,” she said, describing multiple global trends such as climate change, rapid urbanization and mass movements of people that were affecting communities around the world. In fostering partnerships to address those and other concerns, critical elements included delivering results on the ground, providing effective financing and garnering significant private-sector investment.
Frederick Musiiwa Makamure Shava (Zimbabwe), Economic and Social Council President, said the fight for a healthier planet could only be achieved by joining forces. “To achieve sustainable development for all, we are going to need strategic partnerships that will deliver strong results,” he said, underlining the importance of transparency and accountability.
Agreeing, General Assembly President Peter Thomson (Fiji) said securing a sustainable future would require letting go of old grievances and scepticism in favour of working together through new and inclusive ways of thinking, financing and delivering results. “We must embrace partnerships as a fundamental part of the solution,” he said, adding that it was critical to explore ways to bring together stakeholders from Governments at all levels, the United Nations, international financial institutions, civil society, the private sector, academic and scientific communities, technology leaders and innovators, philanthropic institutions and grass-roots organizations.
During the day-long meeting, round-table discussions were held on “Innovative Partnerships for resilient infrastructure, including in countries in special situations” and on “Principles and guidelines governing United Nations-associated partnerships”.
FREDERICK MUSIIWA MAKAMURE SHAVA (Zimbabwe), President of the Economic and Social Council, said the fight for a healthier planet — one in which all people lived better lives — could only be achieved by joining forces. Recalling that the 2030 Agenda for Sustainable Development recognized the catalytic role of partnerships, he said the collective effort of all stakeholders would be critical in addressing the greatest challenges. “I am of the view that to achieve sustainable development for all, we are going to need strategic partnerships that will deliver strong results,” he said, adding that transparency and accountability would be key. Describing today’s Partnership Forum as a unique gathering of Governments, the private sector, philanthropy and civil society, he said he looked forward to a dialogue that would generate fresh ideas.
PETER THOMSON (Fiji), President of the General Assembly, emphasized the need for collaborative, multi-stakeholder partnerships to achieve the 2030 Agenda, the Addis Ababa Action Agenda and the Paris Agreement on climate change. It was critical to explore ways to bring together stakeholders from Governments at all levels, the United Nations, international financial institutions, civil society, the private sector, academic and scientific communities, technology leaders and innovators, philanthropic institutions and grass-roots organizations. Drawing attention to several high-level events he had convened to drive implementation of the 2030 Agenda, he said the Ocean Conference, to be held at Headquarters on 5‑9 June, would be organized around seven partnership dialogues. Securing a sustainable future would require letting go of old grievances and scepticism in favour of joining forces through new and inclusive ways of thinking, partnering, financing and delivering on the group, he said. “Strategic and innovative partners hold the key,” he added. “We must embrace partnerships as a fundamental part of the solution.”
AMINA MOHAMMED, Deputy Secretary-General of the United Nations, in a video message, said “the clock is ticking and we have no time to waste” amid climate change, rapid urbanization, mass movements of people and other global trends affecting communities and financing worldwide. The 2030 Agenda had set the bar high and partnerships were key to supporting the Sustainable Development Goals and ensuring their success. In fostering partnerships, critical elements included delivering results on the ground, providing effective financing and garnering significant private-sector investment.
Yet, she said, how those investments were directed would affect results such as job creation and addressing climate change. Local, national and regional partnerships were equally important and young people needed to be empowered to become part of those widespread changes. Promoting effective partnerships would entail including innovation and finding new ways to move forward. “We have a once-in-a-generation opportunity and we can’t afford to fail,” she said, “but nothing is impossible when we work together in partnership.”
MARY ROBINSON, President of the Mary Robinson Foundation — Climate Justice, said “we cannot just continue with business as usual” as a range of current situations were untenable. Elaborating on some of those challenges, she said the Elders, an independent group of global leaders working for peace and human rights, had issued a strong message about famine affecting four African countries. “Any country facing famine in the twenty-first century is an indictment against all of us and we should hang our heads in shame,” she said. Also disgraceful was the ongoing war in Syria. In addition, addressing the existential threat of climate change was another colossal challenge.
In 2015, she said, world leaders had, with the 2030 Agenda, demonstrated a clear understanding that no one country alone could protect its citizens from climate change and, with the Paris Agreement, had committed to adopting new approaches. A new paradigm must be created to replace the current silo landscape to foster a global solidarity to reach the world’s most vulnerable people. Recent waves of populism had been seen in many countries, but it was clear that taking climate action now was imperative. The 2030 Agenda focused on reaching those most in need. Some of the world’s poorest countries were leading climate action. Inspired by their call for a new era for development, addressing climate change and leaving no one behind, she said climate justice was the antithesis of short-term thinking. More carbon emissions were detrimental on many levels. The question now was whether countries had a choice between economic growth and sustainable alternatives in, for example, building infrastructure. To answer that question, a new wave of infrastructure investment must provide a guide to supporting sustainability.
However, she said, not all action that was good for the planet was good for people and climate justice needed to prevail. Local communities must be consulted, she said, providing examples of renewable energy projects that had infringed upon rights. Civil society was a key player in that regard. Going forward, there was a risk that States could withdraw from commitments they had made and choose to work alone. The same spirit that had been seen after the Second World War was needed now, she said. A new level of consciousness was needed to rise above the challenges of the time and reach a common ground pursuing shared values.
Round Table I
The Council then held a round-table discussion titled “Innovative Partnerships for resilient infrastructure, including in countries in special situations”. Moderated by Rajesh Mirchandani, Vice-President of Communications and Outreach, Centre for Global Development, it featured presentations by Moira Feil, Senior Policy Officer, Group of 20, German Federal Ministry for Economic Development and Cooperation; Symerre Grey-Johnson, Head of Partnerships, Regional Integration, Infrastructure and Trade Division, New Partnership for Africa’s Development (NEPAD); Marie-José Nadeau, Honorary Chair, World Energy Council; Zhao Huxiang, President of the International Federation of Freight Forwarders Associations, Vice Chairman of China Merchants Group and Chairman of the Board of SINOTRANS; Cheryl Martin, Head of Industries and Member of the Managing Board, World Economic Forum; and Mahmoud Mohieldin, Senior Vice-President for the 2030 Development Agenda, World Bank.
Trevor Davies, Global Lead, International Development Assistance Services, KPMG, and Elliott Harris, Director of the United Nations Environment Programme (UNEP) New York Office, spoke as respondents.
Mr. MIRCHANDANI said the discussion would focus on the unique challenges faced by countries in special situations in achieving Sustainable Development Goal 9 regarding infrastructure, industrialization and innovation, as well as the role of private-public partnerships in that regard.
Ms. FEIL described the Group of 20 as a partnership between a diverse group of countries, representing almost two thirds of the world’s population and 75 per cent of global trade. Infrastructure had been a major part of its agenda for many years, with much discussion on such aspects as project preparation facilities, she said. Genuine private-public partnerships required a balanced and good approach to risk sharing with all partners making informed decisions. For smaller countries, regional approaches could be attractive, lowering transaction costs. Within the Group of 20, consideration had been given to ways of narrowing the infrastructure investment gap and how multilateral development banks could optimize their balance sheets and make more funding available, she said.
Mr. GREY-JOHNSON said Africa had seen a number of private-public partnership success stories, notably in South Africa and Senegal. There had not been so much success in regional projects, however, and that was where NEPAD came in. Recalling the outcome of a financing summit hosted by Senegal in 2014, he said the private sector was only interested in properly prepared projects. “Money will chase good projects and well-prepared projects,” he said. With regard to gender mainstreaming, he said NEPAD had established a capacity-building fund that helped ensure that project design included a gender element from the outset.
Ms. NADEAU said private-public partnerships worked in large infrastructure projects when there was a revenue flow, fair sharing of risk and rewards between parties, in countries where the rule of law prevailed, with a pipeline of bankable projects, as well as the skillset required to design, build, operate and maintain projects. With regard to gender, she noted a growing number of well-trained women in emerging economies and developing countries, as well as the need for social responsibility, training and mentorship programmes designed for women.
Mr. ZHAO said his company had a lot of experience with regard to private-public partnerships and promoting infrastructure, having committed big amounts to projects in African countries and developing a business model for ports and free-trade zones. It felt quite positive about that. In some countries, he continued, the public sector was more optimistic about projects than the private sector. He also emphasized the importance of transparency as a way to build trust, and to think of projects in a more strategic way.
Ms. MARTIN said a true partnership meant understanding, trust and learning from each other. If well done, it was a virtuous circle that would lead to conversations on such topics as gender diversity. Projects, if done well, would benefit women.
Mr. MOHIELDIN spoke of addressing private-public partnerships from two perspectives — the wider approach, as a new way of doing business, and the narrow approach, meaning an investment modality. Private-public partnership was not a panacea nor was it the sole solution in all cases. With regard to the gender perspective, he said the World Bank used to treat gender separately, but now it was incorporated into project preparation, in line with a code of standards. He described the Bank’s Global Infrastructure Facility and its Global Infrastructure Forum. He added that, in Africa, perceived risk was much higher than real risk, but that many of the continent’s countries lacked transparency. If there were better data, there would be more projects and better projects.
Mr. DAVIES said today’s discussion had been quite general and did not look enough at the impact on landlocked developing countries and small-island developing States. He also noted a lack of urgency in addressing the effects of demographic change in Africa, where 140 cities the size of New York would be needed to accommodate a growing urban population.
Mr. HARRIS said the discussion seemed to focus on large-scale investment, which did not reflect the entire reality of infrastructure in the developing world. In Bangladesh, for example, electricity was being introduced to 6.5 million households, one solar panel at a time. Unlike a big energy project, that small-scale investment effort was getting clear and renewable energy to the people, consistent with the 2030 Agenda.
In the ensuing discussion, the representative of Japan asked the panel for their thoughts about using new technology for capacity-building as an alternative to dispatching experts to developing countries.
A representative of the International Road Transport Union drew attention to the absence of a commonly agreed definition of green finance.
The representative of Zambia, speaking on behalf of the Group of Landlocked Developing Countries, said States faced a number of development challenges, including lack of access to seaports and high trade and transportation costs. Resilient infrastructure had been recognized as fundamental to sustainable development, she said, adding that such infrastructure could support market access and poverty reduction while bringing countries into regional transport networks and global value chains.
Responding, Mr. MOHIELDIN said small was not necessarily beautiful when it came to infrastructure projects. Noting how countries within a given group could have both many things in common and nothing in common, he called for more a country-specific understanding of requirements.
Mr. GREY-JOHNSON contrasted the sale and installation of solar panels with the need to ensure that everyone was on an electrical grid. He also underscored the need to look at megaprojects with a transboundary reach and requiring private-public partnerships.
The representative of China drew attention to South-South cooperation, as well as his country’s One Belt, One Road initiative, which served to promote African and Asian infrastructure.
The representative of South Africa said North-South cooperation was still at the core of the global partnership for sustainable development. The need for continued and increased official development assistance (ODA) was relevant and critical.
The representative of Maldives, speaking on behalf of the Alliance of Small Island States, said small-island developing States needed resilient infrastructure and green industrialization that were in alignment with their national plans, policies and priorities. She added that the public sector in such countries must be able to enhance and monitor private-public partnerships.
The representative of Nauru, speaking on behalf of Pacific small-island developing States, said access to infrastructure development resources was a constant challenge for countries in a region that faced rising sea levels and extreme weather events. Appropriate follow-up and review mechanisms needed to be in place, he said, looking forward to the Ocean Conference and the partnerships that would be made there.
Representatives of Morocco, Republic of Korea, United Arab Emirates and Algeria, as well as the European Union and the World Intellectual Property Organization (WIPO), also spoke.
Round Table II
In the afternoon, the Council held a round-table discussion titled “Principles and guidelines governing United Nations-associated partnerships”. Moderated by Gavin Power, Deputy Director of the United Nations Global Compact, it featured presentations by Craig Mokhiber, Chief of the Development and Economic and Social Issues Branch, Office of the United Nations High Commissioner for Human Rights (OHCHR); Vinicius Carvalho Pinheiro, Special Representative of the International Labour Organization (ILO) to the United Nations, New York; Olav Kjörven, Director of Public Partnerships, United Nations Children’s Fund (UNICEF); Geoffrey Hamilton, Chief of Public-Private Partnerships Programme, Economic Commission for Europe; and Nancy Aburi, Lead of the Partnership Development and Network Support Private Sector Partnerships, Office of the United Nations High Commissioner for Refugees (UNHCR).
Speaking as respondents were Laura Petrella, of United Nations Human Settlements Programme (UN-Habitat), Louise Kantrow, Permanent Observer of the International Chamber of Commerce to the United Nations, New York, and Pietro Bertazzi, Deputy Director of Policy and Global Affairs, Global Reporting Initiative.
Mr. POWER asked the panellists a range of questions, including explanations of how the 2030 Agenda had influenced partnership guidelines, how principles and guidelines were connected to impact evaluations and their plans for future endeavours.
Mr. MOKHIBER said the 2030 Agenda had shaken up the way things operated. “This is not your grandmother’s agenda,” he said, emphasizing that the development framework mirrored human rights, with issues such as personal security and the administration of justice. Such an ambitious agenda could not be successfully implemented without effective partnerships. Evaluating impact through a human rights lens occurred at every step of the process, from selecting partners to examining components in the partnership’s structure, including gender equality. That process went beyond reporting issues, but was about tracking responses and communicating about findings.
Mr. PINHEIRO agreed, saying ILO was a partnership in itself, promoting policies in favour of agreed upon outcomes in areas such as child labour and human trafficking. Other partnerships included projects conducted with Governments on decent work, jobs for youth and other initiatives. The 2030 Agenda also offered the opportunity to revisit and assess partnerships. A general impact assessment should go beyond the core guidelines. For instance, an ILO labour partnership had been assessed on specific projects by using tailored methodology.
Mr. KJÖRVEN said UNICEF was now assessing its partnerships, with multi-stakeholder ventures being favoured as a way to move forward. A focus was also on public-private and civil society partnerships and how they could achieve results on the ground. Yet, partnerships were not enough to achieve all the Sustainable Development Goals. Using food as an example, he said reversing the current situation where children were obese from eating junk food, were developing diabetes and getting sick, partners needed to include farmers, those responsible for what went on the market and how waste was managed. Equally important was a willingness to change, which was key to fostering effective multi-stakeholder partnerships and making progress on the Goals. Whatever accountability that was built around partnerships must keep the Goals in mind. “It was important to keep our eye on the ball,” he said.
Mr. HAMILTON said public-private partnerships had never formally been part of the development system. Sensitizing the private sector was the starting point in building partnerships aimed at driving forward progress on achieving the Goals. He said that he would appreciate it if the Organization could develop guidelines for external partners as “one United Nations”. Development assistance was important in leveraging public-private partnerships and should be examined to improve results.
Ms. ABURI said that to deliver a successful comprehensive refugee response, partnership guidelines had been revised. Currently, some partnership guidelines centred on fundraising. In the 2030 Agenda, work needed to be done with new partners. From a private-sector perspective, the UNHCR board could consider guidelines during the partner review process. Furthermore, it must be easier to adapt existing guidelines.
Ms. PETRELLA said partnerships varied across many sectors. Urban development was a multi-stakeholder endeavour that could include efforts such as urban planning, private sector and local governmental authorities.
Ms. KANTROW said the roles of the private sector and partnerships were beginning to gain attention in the development arena. The 2030 Agenda and the General Assembly resolution on a global partnership for development had recognized that and, moving forward, efforts should centre on fully engaging the private sector. The United Nations had guidelines using a principle-based approach and businesses had also developed their own. Going forward, all guidelines should be reviewed towards achieving successful results.
Mr. BERTAZZI said principles and guidelines on collaboration of partnerships should include a number of elements. Among them were a focus on impact, using a holistic approach that emphasized the connectivity between the 17 Sustainable Development Goals, and on transparency and reporting.
In the ensuing discussion, delegates shared suggestions and concerns about ways to create and enhance partnerships. Some suggested that bolstering technology transfer initiatives would level the playing field for landlocked developing countries and others in special situations. Others gave national examples of how partnerships had achieved progress in a number of fields.
The representative of Ecuador, speaking on behalf of the “Group of 77” developing countries and China, underlined the importance of robust, effective and transparent public-private partnerships to advance progress on the Goals. Welcoming progress that had been made to date, he said South-South cooperation projects should be bolstered. Yet, South-South cooperation was a complement to and not a substitute for North-South cooperation. Countries in vulnerable situations should be able to access technology transfers in a non-discriminatory way. Coordination in engaging partners was important, he said.
The representative of El Salvador, speaking on behalf of the Community of Latin American and Caribbean States (CELAC), highlighted the significance of finding new ways of interactions between Governments, academia and the private sector in fostering the development of science, technology, innovation and technology transfers. Developed countries must meet their ODA commitments, which could leverage and sustain financing for developing States.
The representative of Bangladesh, speaking on behalf of the Group of Least Developed Countries, said a robust, effective global partnership was needed. However, partnerships should consider national situations, policies and priorities.
The representative of Morocco said the Goals required extended partnerships, with States being the “centre of gravity”. A common vision was needed with a view to achieving the Goals. Ensuring the effectiveness of partnerships was essential, as was improving existing mechanisms, bringing in new actors and accelerating dialogue between State, public and private stakeholders.
The representative of the Republic of Korea, speaking on behalf of a number of countries, said the United Nations was well positioned to assist the international community in realizing common goals. In examining how to improve the current system, efforts should aim at streamlining processes in ways that better reflected realities on the ground. Also important was using information technology and considering input from civil society.
The representative of Belarus said vulnerable groups must not be left behind. For its part, Belarus had worked with partners to tackle human trafficking and organized crime, with one practical outcome being the creation of a trust fund for victims.
The representative of Denmark said existing partnership guidelines, such as those being used by the Global Compact, should be used and built upon while using caution to avoid adding layers of bureaucracy.
Also participating in the discussion were representatives of Maldives, Tajikistan, Grenada (on behalf of the Caribbean Community), Indonesia, Dominican Republic and the European Union, as well as United Nations Volunteers, non-governmental organizations and civil society.
The European Parliament approved an agreement granting duty-free access to the EU for products from Namibia, Mozambique, Botswana, Swaziland and Lesotho, and improved market access for South Africa on Wednesday.
“This agreement will help our African partner states to reduce poverty and can also facilitate their smooth and gradual integration into the world economy. There are also many safeguards in the deal to ensure that local people truly benefit from this cooperation. The language on human rights and sustainable development is one of the strongest that you will find in any EU agreement”, said rapporteur Alexander Graf Lambsdorff (ALDE, DE), before the vote.
MEPs approved the deal by 417 votes to 216, with 66 abstentions.
Free access to EU markets
The Economic Partnership Agreement (EPA) with six member states of the South African Development Community (SADC) establishes a "positive discrimination", ensuring immediate duty- and quota-free access for their exports to the EU market. It also creates new regional opportunities through more flexible use of rules of origin.
The African countries will liberalise 86% of their trade with the EU (Mozambique 74%) over ten years with the exception of agricultural and fishery products. The deal replaces the previous interim agreements based on unilateral trade preferences and complies with World Trade Organisation (WTO) rules.
While the agreement covers only trade and development cooperation, it leaves the door open for services, investment, intellectual property and public procurement. To mitigate potential negative impacts on the SADC countries, several safeguards were added to the deal. The EU undertook not to subsidize its agricultural exports to these countries.
The deal also lists trade-related areas that could benefit from EU development cooperation funding, but none is pledged at this stage.
In a July resolution, international trade MEPs advocated strengthening the monitoring of the agreement to ensure that “its benefits for the people are maximized”. The committee also tabled an oral question to the Commission for this plenary on parliamentary oversight and civil society monitoring.
Next steps: The deal will enter into force once the Council formally approves it and the national parliaments of the six African states ratify the text.
Note to the editors: in the Cotonou Partnership Agreement of 2000, African, Caribbean and Pacific (ACP) countries and the EU agreed to negotiate reciprocal, though asymmetric, trade agreements to comply with WTO rules and to support these countries’ development and integration into the world economy.
Negotiations were to be concluded by the end of 2007, but the process took longer and the EU finished negotiations with six states of the SADC Group in July 2014. Angola finally decided not to enter into the agreement, but may join in the future.
Negotiations with six SADC states ended in 2014. The other eight (Democratic Republic of Congo, Madagascar, Malawi, Mauritius, Seychelles, Tanzania, Zambia and Zimbabwe) belong to other regional EPA groupings.
Report – Economic Partnership Agreement between the EU and its Member States, of the one part, and the SADC EPA States, of the other part – A8-0242/2016 – Committee on International Trade
History of Economic Partnership Agreements
When the Cotonou Partnership Agreement was established in 2000, it called for fundamental changes in the longstanding non-reciprocal trade preferences that had governed the economic and political relationship between the African, Caribbean and Pacific Group of States (ACP) and the European Union for almost 40 years. The main reason for this was that the impact of these unilateral preferences had been disappointing: firstly, the share of ACP trade in the EU market was continuously falling and most countries did not manage to use these preferences to diversify their economic structures. Secondly, the preferences were not compatible with the rules of the WTO, as they discriminated against non-ACP developing countries.
The EU and ACP agreed to negotiate reciprocal, though asymmetric trade agreements known as Economic Partnership Agreements. ACP countries themselves decided in which regional grouping they wanted to negotiate. Negotiations of Economic Partnership Agreements (EPA) started in 2002 and were expected to be concluded by the end of 2007, a date by which the WTO waiver would expire. Besides ensuring that ACP products would secure indefinite, duty free quota free market access to the EU, EPAs were mainly meant to be a development tool enabling ACP countries to deepen their own regional integration dynamics and to facilitate their integration into the global economy.
Today, all non-EPA states have the EU's "Generalised Scheme of Preferences" (GSP) or the “Everything But Arms” arrangement (EBA). However, for those countries that had concluded an interim EPA in 2007, in order to avoid market disruption and to allow the sufficient time to sign and ratify the agreement, the EU adopted a Market Access Regulation (MAR), Council Regulation (EC) No 1528/2007, as of 1st January 2008 – that enabled an advanced application of EPAs. It was later decided that the MAR treatment [free access to the EU] would expire on 1st October 2014 for countries that did not enter into a regional agreement or had not taken the necessary steps to implement their interim EPAs. Botswana, Namibia and Swaziland were among the MAR countries that did enter into a regional EPA before 1 October 2014, and the Commission duly adopted Delegated Acts keeping them on the MAR, while stating that they were expected to see through their commitment and ratify the regional EPA by 1 October 2016.
EU- Southern African Development Community (SADC) EPA
The SADC consists of 15 members. Seven of them started negotiating an EPA with the EU as the SADC EPA Group, namely Angola, Botswana, Lesotho, Mozambique, Namibia, Swaziland and South Africa. South Africa initially participated as an observer and in a supportive capacity but formally joined negotiations in 2007.
The core of the EU-SADC EPA is the Southern African Customs Union (SACU), the oldest customs union in the world. By joining this configuration, Mozambique and Angola intended to enhance their already strong economic and trade links with SACU. The other eight SADC Member States (Democratic Republic of Congo, Madagascar, Malawi, Mauritius, Seychelles, Tanzania, Zambia and Zimbabwe) are part of other regional EPA configurations.
At the end of 2007, Botswana, Lesotho, Swaziland, Mozambique and Namibia agreed an Interim region-to-region EPA with the EU. The interim EPA contains a clause allowing Angola and/or South Africa to join rapidly if they so wish. In the meantime Angola, being a Least Developed Country, maintains duty-free quota-free market access to the EU under the “Everything But Arms” initiative, while EU - South Africa trade is covered by the Trade, Development and Cooperation Agreement (TDCA) signed in 1999.
Botswana, Lesotho, Swaziland and Mozambique signed the interim EPA in June 2009. Although Namibia initialled the agreement more than nine years ago, they decided not to sign.
Both sides agreed to continue negotiations for a comprehensive regional EPA covering services, investment and trade-related rules. In fact in 2010, the interim EPA signatory countries suspended the process of ratification of the agreement, pending the conclusion of comprehensive regional negotiations.
On 15 July 2014, the EU concluded negotiations with six states of the Southern African Development Community (SADC) EPA Group, comprising Botswana, Lesotho, Namibia, Mozambique, South Africa and Swaziland. Angola finally decided not to initial the agreement, but may join in the future pursuant to a specific accession clause in the agreement.
Regional integration and complexities
The SADC EPA Group is a very diverse group. The population of the six countries of the SADC EPA Group accumulates to some 100 million inhabitants, half of which live in South Africa. Their GDP according to figures provided by the World Bank in 2014 was 410 bln Euro, 85% of which was produced by South-Africa.
The group contains two least-developed countries (Lesotho and Mozambique) as well as one BRICS country (South Africa), which concluded a Trade, Development and Cooperation Agreement (TDCA) with the EU in 1999. Without the EPA, their GDP levels would force Swaziland into GSP status and Botswana and Namibia would graduate to Most-Favoured Nation (MFN) status.
Five of the SADC EPA Group states are part of the Southern African Customs Union (SACU). Established in 1910, this is the oldest customs union in the world. Is also has a common external tariff. Mozambique is not part of SACU, but has long established trade and investment links with SACU.
In 2013, the EU imported goods in the value of 31 bln Euro from the SADC EPA Group while exporting goods in the value of 33 bln Euro to SADC. SADC exports to the EU are composed of oil 23% (from Angola), diamonds 11% (from Botswana), coal 12%, precious stones, metals and fish (Namibia), and sugar (from Swaziland).
2009 EP resolution on SADC EPA
In March 2009 the European Parliament voted a resolution on the SADC EU Interim EPA and called amongst others for:
• A WTO conform EPA
• duty free quota free access into EU market
• support for existing regional integration (Southern African Customs Union, SACU)
• phasing out of EU agricultural export subsidies
• EU flexibility on export taxes, MFN clause and infant industry protection
• simpler and improved rules of origin, promoting regional cumulation
• the inclusion of a development cooperation chapter with increased and adequate assistance
• importance of respect for ILO conventions
• monitoring of implementation coordinated by the relevant parliamentary committee
Notably, the agreement never entered into force as it was signed but never ratified.
Key provisions in the EPA
Although this development-oriented regional trade agreement currently covers only merchandise trade, development-cooperation and trade and sustainable development provisions, it also leaves the door open to negotiate further provisions on services, investment, intellectual property, public procurement and enhanced stipulations on sustainable development.
The asymmetric nature of the agreement establishes a "positive discrimination" for the SADC EPA partners ensuring duty-free access to the EU market, at the same time reciprocally eliminating barriers to "substantially all the trade" and ensures WTO-compatibility, promoting regional integration, economic cooperation and good governance. EU will offer duty free quota free to five SADC countries, a continuation of present practice, but not disrupted through MAR amendment. Instead of offering unilateral preference, trade relations between SADC EPA countries and the EU are now stipulated in a contractual arrangement. Under progressive market opening provisions, SADC EPA countries will liberalise 86% of trade with the EU (Mozambique 74%) over a period of 10 years, excluding sensitive agricultural and fisheries products.
Promotion of regional integration
The EPA did not only avoid breaking up the oldest existing customs union in the world through the MAR amendment, but instead strengthened the SACU by harmonising South Africa to SACU, and brings Mozambique closer to SACU. The EU-SA TDCA used to de facto apply to the whole SACU as one legal entity. Its trade provisions will be replaced by an agreement which has been negotiated by all. Imports coming from the EU will be subject to a single external tariff.
The EPA also strengthens regional integration in various other ways, including through its Rules of origin regional cumulation possibilities, the openness to other SADC states (Angola) joining the EPA, and through institutional strengthening of SACU. The dispute settlement mechanism in the EPA builds on the DSM provisions from TDCA and will apply to all SADC EPA countries. In addition, common provisions on trade management (such as safeguards) and common decision making bodies will further strengthen the regional integration process.
Furthermore, "regional preference provisions" rule out a possibility for the SADC EPA countries to grant products originating in other SADC EPA countries a less favourable treatment than to those imported from the EU.
The parties commit to facilitate regional trade by boosting customs co-operation and by implementing reforms, in particular by harmonising and simplifying procedures and regulations in the SADC region, facilitating transit and fighting fraud.
Promotion of trade and development
There are several safeguards foreseen: multilateral safeguards, bilateral safeguards, agricultural safeguards as well as a transitional safeguard clause for a list of products originating from Botswana, Lesotho, Namibia and Swaziland (BLNS) to mitigate any potential negative impact in these countries.
As the use of agricultural export subsidies will no longer be allowed upon entry into force of the EPA, another key demand of SADC EPA countries was met.
Gradual lifting of tariffs on intermediates and inputs, such as fertilisers and machinery, will give a further boost to the value-addition process.
On services, the EPA contains a rendez-vous clause. Negotiations with limited number of SADC countries on services will continue. The rendez-vous clause gives the opportunity to implement provisions on services at a later stage, as it also does for public procurement and IPR.
An important Protocol on Geographic Indications between South Africa and the EU is included, which was a key demand of the EU. In total, 105 South African products (102 of which concern wines) and 251 products are covered by the protocol. The EU will protect South African names such as Rooibos and numerous wine names like Stellenbosch and Paarl.
A detailed chapter on development cooperation identifies trade-related areas that could benefit from EU financial support. Differently from the ECOWAS EPA however, which foresees a considerable financial envelope, there is no financial commitment made at this stage. Nevertheless, specific programmes from the national and regional indicative programmes for the DCI and the 11th EDF are scheduled to be funded in the context of the preparation and implementation of the EPA.
In the EPA, the EU has shown flexibility allowing SADC EPA States to "grandfather" existing export duties and to apply new export taxes in exceptional circumstances in case of specific revenue needs, to promote infant industries or for environmental protection. Generally more room is provided for BLNS countries, but also some limited possibilities for South Africa on a limited number of products (8) if it can justify industrial development needs for maximum 12 years. That text allows SADC countries to benefit from raw materials.
A MFN clause was included, but will not automatically extend preferences to the EU. These extensions have to be examined first and would only apply to agreements with major trading countries. The MFN clause is only applicable to customs duties and fees, rules of origins are not included.
As described before many safeguards are foreseen, also to protect infant industries. Moreover, SADC had the possibility to exclude sensitive products from liberalisation.
Respect or values and monitoring the implementation of the agreement
The agreement contains a non-execution clause (Art 110.2), which provides the basis for taking 'appropriate measures' under the existing Cotonou Agreement if a Party fails to fulfil its obligations in respect to the fundamental principles in Article 2 of the Agreement. Suspension of trade benefits is one such measure even if this will be considered an action of last resort.
The first part of the EPA is devoted to sustainable development, which underlines the importance of these provisions. The parties reconfirm their obligations under international law, including ILO conventions, and commit themselves not to derogate from their environmental and labour laws. The EPA also establishes a consultation procedure for any environmental or labour matter. Dialogue on such issues may involve relevant authorities and stakeholders. The agreement defines a comprehensive list of areas in which the partners will cooperate to foster sustainable development.
Your rapporteur believes it is important to strengthen the monitoring provisions in the agreement. In Article 4, the parties agree to continuously monitor the operation and the impact of this agreement, “within their respective participative processes”, to make sure that its “benefits for the people” is maximised. Also a review of the agreement will take place every five years (Article 116). However the practical tools for this monitoring need to be strengthened. Pending establishment of the abovementioned sustainable-development dialogue and relevant participative processes for monitoring, the absence of a Joint Parliamentary Committee and a Joint Consultative Committee (which do exist in the Cariforum EPA, but are not part of the SADC EPA text) may be felt here, unless existing structures can be used (regional Joint Parliamentary Assembly meetings; EU-South Africa parliamentary committee, etc.). These omissions are regrettable and pragmatic solutions will need to be found to address this weakness.
Your rapporteur recommends giving consent to the SADC - EU Economic Partnership Agreement. This EPA has the potential to bring fundamental positive change and contribute to sustainable economic growth and deepened intra-regional trade and integration.
However, the trade and partnership agreement can only be a small part of a larger strategy. The SADC states should conduct trade and development-friendly domestic policies and pursue structural reforms. The regulatory framework that attracts investment is another element in the equation. These countries should also consider using the potential of the EPA by going beyond trade in goods only and also address services in the future. The EU should provide assistance in terms of capacity building and trade related assistance. The EP will need to monitor implementation and raise issues when appropriate. Appropriate monitoring structures need to be put in place to maximize the impact of the agreement.