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Prospects improve for Pacific–EU EPA

06 February 2014

In December 2013, “a joint roadmap to conclude negotiations by May 2014” was agreed between EU Trade Commissioner Karel De Gucht and ACP Pacific Ministers at an informal meeting in the Solomon Islands. According to press reports, “very significant progress” was made with “mutually satisfactory compromises… agreed on global sourcing” in the fisheries sector. According to press reports, “the flexibility shown by the EU on fisheries matters is likely to play a very positive role towards the full re-engagement of PNG” in the regional EPA negotiations process.

The Solomon Islands Trade Minister described the meeting with Trade Commissioner De Gucht as “very useful in clarifying the issues”, with the EU stating that “the negotiations on the comprehensive EPA have not been officially suspended.”

According to some press reports, Trade Commissioner De Gucht confirmed that if Papua New Guinea (PNG) continued to stand apart from the broader regional EPA process, then “having two separate EPAs would be an option for the Pacific region.” However, according to subsequent press reports, Trade Commissioner De Gucht said when addressing the Economic Association of the Solomon Islands that the negotiations had been complicated by “Papua New Guinea’s decision to pull out of the agreement”. He reportedly said “we will not be able to find agreement if we can’t solve this problem.”

The next round of formal negotiations is now scheduled for March 2014.

Against the background of uncertainty created by the non-ratification of the Economic Partnership Agreement and the pending lapsing of the current contract with Tate & Lyle Sugars, the government of Fiji launched discussions in January 2014 with a visiting Chinese delegation on the scope for the sale of 100,000 tonnes of raw sugar to China. The scope for cooperation in improving productivity through the supply of equipment and a possible joint-venture sugar refinery were also discussed. 

Editorial comment

Dialogue between the EU and Pacific ACP (PACP) countries has now been renewed, with an assurance that the global sourcing provisions that were negotiated for the tuna sector under PNG’s bilateral Interim EPA will not be undermined within any final regional EPA. This is seen as an important issue in PNG, given the increased investment flows and employment creation in the tuna canning sector generated by these new rules of origin (see Agritrade article ‘ Problems faced in Pacific EPA negotiations despite Commissioner’s upbeat...’, 11 November 2013).

The progress reported may ease Fiji’s concerns over the possible “premature end of market access” for sugar, which it maintains would be “disastrous” for the Fijian sugar sector. However, should the Fiji Sugar Corporation choose to reorient its sugar exports away from Tate & Lyle Sugars (TLS) in the UK and towards Chinese buyers, then this could further compound the current challenges in procurement and capacity utilisation that are facing TLS, whose perilous financial state has led to demands from it to be allowed duty-free access to world market priced sugar.

Major issues are nonetheless still faced in the EPA negotiations, notably regarding whether the EU will be willing to extend global sourcing to chilled and fresh fish and to fish products (under HS classifications 0304 and 0305), in line with existing PACP requests, based on the negotiating instructions drawn up at Heads of Government level.

More broadly, the prospect of a comprehensive EU–PACP EPA agreement raises the question of its possible knock-on effects on the ongoing PACER-Plus negotiations. It can be assumed that with Australia and New Zealand showing a reluctance to incorporate more developmental aspects into the PACER-Plus text while demanding the same degree of market liberalisation as contained in the PACP market access offers to the EU, the PACER-Plus negotiations will face similar delays to those experienced under the EPA negotiations.


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