ACP-EC COTONOU AGREEMENT

AFRICAN, CARIBBEAN AND COUNCIL OF PACIFIC GROUP OF STATES THE EUROPEAN UNION

Brussels, 14 April 2003

ACP/61/052/03 ACP-CE 2116/03

MINUTES of the : 4th meeting of the Joint ACP-EC Ministerial Trade Committee on : 1 March 2003 place : Castries, Saint Lucia Subject : Minutes of the 4th meeting of the Joint ACP-EC Ministerial Trade Committee

The Joint ACP-EC Ministerial Trade Committee (JMTC) held its fourth meeting in St Lucia on 1 March 2003 under the Chairmanship of Commissioner Pascal LAMY, Member of the European Commission. Honourable Mr. Bello Bouba Maïgari, State Minister for Industrial and Trade Development of Cameroon acted as spokesman for the ACP States.

A list of participants at the meeting is given in Annex I.

ACP-CE 2116/03 ACP/61/052/03 MB/nh,sg 1 DG E II EN Opening statements

Honourable Senator Julian R. Hunte, Minister for External Affairs, International Trade and Civil Aviation of Saint Lucia recalled that the ACP States and the EU share a common vision of promoting development within the framework of mutual cooperation and partnership. Referring to compliance to WTO rules, he considered necessary to ensure that no alien logic takes over the essence of the ACP-EU dialogue and determine the nature of ACP-EU relationship. He stressed the importance of not leaving this issue to the regulatory provisions which have never adequately appreciated the constraints and needs of the most vulnerable countries such as small islands developing States.

Honourable Mr. Bello Bouba Maïgari, State Minister for Industrial and Trade Development of Cameroun, Co-Chairman of the Joint ACP-EC Ministerial Trade Committee informed that the instruments for ratification of the Cotonou agreement were deposited on 27 February and noted with satisfaction that the fourth Joint ACP-EC Ministerial Trade Committee meeting takes place exactly one month before the Cotonou agreement will entry into force on 1 April 2003.

Minister Bello Bouba Maïgari recalled that the Committee is in charge of the follow-up of the Economic Partnership Agreements negotiations, of the WTO negotiations as well as the implementation of trade measures of the Cotonou agreement. He pointed to the large number of Less Developed Countries in the ACP Group and to the importance for these countries to benefit from the necessary resources to overcome the difficulties they would have to face in trade liberalisation. He considered that compatibility with WTO rules will have to be sought through consideration of the specific condition of the ACP States and solidarity between the ACP States in all major issues such as trade in agricultural products, regional trade agreements, special and differential agreements, intellectual property rights. He pointed in particular to the need for cooperation between the ACP States and the EU in the preparation of the WTO Ministerial Conference and to the "maintien de l'acquis" of the Lomé Convention in the implementation of the Cotonou agreement.

ACP-CE 2116/03 ACP/61/052/03 MB/nh,sg 2 DG E II EN Honourable Dr. Kenny D. Anthony, Prime Minister of Saint Lucia, expressed appreciation for the support that the ACP-EU Group has provided to Saint Lucia and Windward islands' banana sector as well as gratitude to the European Union for its support to the efforts in supporting the commercialisation of banana, while creating new economic activities. He conveyed the ACP concerns about the multilateral trade negotiations which he believes have been fuelled more by the traditional market-opening agenda than by genuine concern to understand and effectively tackle the needs of the weakest countries. Referring to the proposed modalities for WTO negotiations on agriculture, he explained that many ACP countries consider agricultural production essential for the survival of rural national economies and reminded that agriculture provides considerable employment and rural income and permits the generation of earnings essential for funding imports and domestic investment activities. He summarised his views by declaring that the ACP Group is aiming at a fairer trade regulatory system that contributes more to economic growth and that development should be the focus of negotiations. As regards free trade area agreements, Prime Minister Anthony stressed that special differential treatment should be applied to small vulnerable countries which should not necessarily provide reciprocity in agreements with large, more advanced countries.

ACP-CE 2116/03 ACP/61/052/03 MB/nh,sg 3 DG E II EN 1. Adoption of the Provisional Agenda (ACP-CE 2111/03 œ ACP/61/029/03)

The agenda was approved.

2. Approval of the Minutes of the 3rd Joint ACP-EC Ministerial Trade Committee (ACP-CE 2189/02 - ACP/61/114/02)

The minutes were approved.

3. Negotiations of Economic Partnership Agreements

i) Status of the EPA negotiations

Minister Bello Bouba Maïgari informed that the Group of Ambassadors held four meetings on, inter alia, the following issues: the content of negotiations, legal issues, working documents prepared by the Commission and the development dimension. He reported that the results of these meetings were examined by the ACP Trade Ministerial Committee and discussion lead to the following conclusions: a) content of negotiations: the ACP Group believes all issues raised by each side and horizontal issues of interest to the ACP Group must be examined during the first phase, if the second phase is to start on a sound base; b) legal issues: it is necessary to agree on the means to meet the objectives of ACP sustainable development, poverty eradication and progressive smooth integration of ACP States in the world economy. The results of the Doha conference should also be considered and WTO negotiations on regional trade agreements should allow to contribute to new WTO compatible EPAs, which do not affect the interests of the ACP States;

ACP-CE 2116/03 ACP/61/052/03 MB/nh,sg 4 DG E II EN c) working documents prepared by the Commission: the discussion can be continued at Ambassadors level; d) development dimension of EPAs: the ACP side agreed, in principle, to the development objective of EPAs.

Commissioner Lamy reminded that when the EPAs discussions were launched, on 27 September 2002, a set of principles were agreed: - a two-tier approach, with discussions at the all-ACP level at the beginning, followed by negotiations on a regional level; - a three-level structure of the all-ACP tier: ministerial, ambassadorial and technical.

He added that the ACP and the EU might have had different views on how phase one would be followed by phase two, with the ACP group believing a formal conclusion of phase one would be necessary whereas for the EU the end of discussion/exploratory phase one would not be a pre-condition for moving to phase two. To the contrary, the first all-ACP phase could continue in order to reply to remaining questions, even after the regional negotiations had started œ it would even become more useful then (because there will be more specific issues arising from the regional negotiations). The ACP had been right about the need to have a first phase to discuss and clarify issues but, looking at work done since September, it was becoming necessary to move into regional negotiations, and the Commission was ready to do so after the WTO Ministerial Conference in Cancun.

Commissioner Lamy stressed that it would be a mistake to turn the first-phase discussions into a fully-fledged negotiation, which must be more focused. Overall discussions in Brussels can be useful to prepare the ground, but the future EPAs should not be determined in Brussels. EPAs have to be defined in the regions and in the countries concerned. Discussions must be followed by regional negotiations.

ACP-CE 2116/03 ACP/61/052/03 MB/nh,sg 5 DG E II EN Those regions that have not decided on the geographical configuration could do so in the coming months. This requires political leadership and long-term vision of economic development and international cooperation.

Most regions have already established working or steering groups to prepare negotiations. Their work will probably need to contribute to the political decision-making process of the individual regions. It would be useful to nominate one contact group per region to work in the preparations of the regional phase. In this context it is also important to involve business and civil society in the preparation process. Commissioner Lamy stressed that the role of Ministers is crucial. The issues at stake are complex; some of them are very technical but also highly political in other respects. The involvement of Ministers is crucial to move the process forward.

Minister Malie from Lesotho pointed to differences in degree of preparation for the second phase among ACP countries and wondered if for some ACP regions the structures would be ready in time.

Commissioner Lamy acknowledged the difficulty some ACP countries are facing. He reassured that there is no undue pressure and it will be up to the ACP countries to take decisions on the mandate and on the negotiating structure to be set up. He also anticipated that, when the process will start in September, the ACP Group will not be split between the countries that have a structure and those that have not.

Minister Bello Bouba Maïgari clarified that the ACP side does not question the opportunity to delve into regional negotiations. He considered, however, the second phase should only begin when progress has been achieved and appealed to coherence, stating that the concerns of the ACP Group should be considered.

ACP-CE 2116/03 ACP/61/052/03 MB/nh,sg 6 DG E II EN ii) Status of capacity building support for the EPA negotiations

Minister Bello Bouba Maïgari wondered if the EU side fully understands the ACP's concerns on the means available and namely on the additional financial resources enabling to make the most out of the preparatory period and develop capacities in both the public and private sectors. He stressed the ACP States believe it is urgent for their economies to benefit from structural adjustment in a way as to allow to adapt to a liberalised environment. He also congratulated the Programme Management Unit of the 20-million Euro facility for the work done so far and encouraged further activity in this area.

Commissioner Lamy was glad to learn that the ACP side considered the funds were well spent. He informed that over the last six months 14 projects have been approved, over 10 other projects are being prepared and all existing EC instruments in this field will be mobilised in a way that most of the 20 M⁄ earmarked funds will be committed by the end of the year, well ahead of schedule.

Commissioner Lamy carefully listened to the considerations expressed on additional financial resources. He reminded that the financial resources were identified in the negotiations on ACP-EC relations and the issue of financial envelope was settled at that time. He said that at the present stage the point is rather to identify how much available resources can be targeted to trade issues.

Commissioner Lamy‘s priority now was to use trade-related assistance (TRA) to go beyond technical assistance (expertise, studies, training) but stop short of addressing heavy supply-side constraints (e.g. infrastructure) through TRA. He wanted to delineate and discuss intermediate issues, such as SPS measures etc.

ACP-CE 2116/03 ACP/61/052/03 MB/nh,sg 7 DG E II EN iii) Coherence between WTO and EPA negotiations

The ACP Group pointed to the importance of ensuring a coherent approach between WTO and EPAs negotiations, considering the issues at stake are of a similar nature and discussions take place in different fora. The Group also welcomed the suggestions to create an ACP-EU coordination mechanism, expressed preference for this mechanism to operate at political level and took note the EU side believes that strengthening of the existing coordination structure located in Geneva should suffice. The ACP side requested further clarification on this issue.

Commissioner Lamy replied that the WTO and EPAs are separate negotiations, but they are also closely inter-linked and in many ways require a similar toolbox. They were not only creating important synergies but were also mutually supportive. He noted they also take place simultaneously, although the multilateral negotiations will end earlier and the EPAs negotiations will only be finalised afterwards. Also, he noted work in the context of EPAs will be done in the spirit of an asymmetry stronger than the one that can be agreed at WTO level.

Replying to the suggestion to create a WTO coordination structure in Brussels, Commissioner Lamy said the main part of work should be done in Geneva in order to take advantage of the presence of Ambassadors in charge of multilateral trade negotiations. Resources to operate new formal structures were limited on both sides. However, he indicated that if the ACP side feels it is necessary, "ad hoc" meetings could be held in Brussels bearing in mind it will be up to the ACP side to ensure how Ambassadors in Geneva and Brussels interact. The EC side would be prepared to consider funding to allow Ambassadors in Geneva to be involved in "ad hoc" meetings in Brussels.

Minister Bello Bouba Maïgari on behalf of the ACP side took note of the suggestions.

ACP-CE 2116/03 ACP/61/052/03 MB/nh,sg 8 DG E II EN iv) Sustainability Impact Assessment Studies on EPAs

The ACP Group asked to be informed of progress of the studies launched by the EU to assess the impact of APEs on sustainable development with a view to examining whether they can share the conclusions of these studies.

Commissioner Lamy replied by saying that impact assessment is a new instrument in the negotiation and considerable resources have been devoted to such assessment in particular in its economic, social and environment aspects. He reminded that according to Cotonou EPAs should promote the sustainable development of ACP countries. Stemming from this commitment a Sustainable Impact Assessment (SIA) was launched which will accompany the negotiations. The objective is to identify economic, social and environmental impacts of the future trade agreements.

This process will last four years and benefit from a budget of 1 M⁄. It should lead to a greater understanding of the possible consequences of negotiations. The information will be useful for all stakeholders as the reports will be published on a special website (http://www.sia-acp.org/), which will also be a platform for contributions and discussions concerning the sustainable impact assessment.

Four phases are envisaged. The work of the first phase started in September last year, a first inception report has been published on the SIA website. The first phase includes a preliminary overall SIA of the whole ACP region and two pilot regional SIAs for West Africa and the Caribbean. The Commission organised a conference on SIAs in February in Brussels where the overall approach was discussed and where a number of high-level scientists and experts from ACP countries participated actively. In the next months the consultants will intensify their desk research but also establish direct contacts with stakeholders, both in Europe and in the partner countries. The mid term report is expected in April 2003, with the final report of phase one scheduled for July. The second phase will draw from the recommendations and lessons of the first phase.

ACP-CE 2116/03 ACP/61/052/03 MB/nh,sg 9 DG E II EN Commissioner Lamy believes the SIA will be a tool to guide us in the negotiations, to line out flanking policies which would ensure the sustainability of EPAs and to provide a platform for open dialogue and exchange of information.

Minister Bello Bouba Maïgari welcomed the fact that the EC side is working on Sustainable Impact Assessment as the ACP Group.

4. Preparation for the 5th WTO Ministerial Conference, Cancun, Mexico

- Status of negotiations under the Doha Work Programme and outlook

Minister Bello Bouba Maïgari informed that the ACP Group is actively preparing the ministerial conference and is concerned by work preparation particularly on issues of major interest to the ACP Group such as special and differential treatment. The ACP regretted the lack of progress on this issue in view of reinforcing such measures and make them more accurate, effective and operational. Remarks of a similar nature apply to regional trade agreements, which should take into due consideration development- related issues. The ACP considered important that the ACP and the EU side ensure together that the rules of regional trade agreements between developed countries and developing countries do not affect overall coherence and application of special differential treatment.

As far as negotiations on agriculture are concerned, the ACP States noted that the draft "modalities" put forward by Mr Harbinson do not meet their concerns. The ACP said they are in favour of a global approach which would allow to maintain a satisfactory level of preferences and sustainable development as well as take into account the interaction between access to market, internal support and export competition. The ACP declared internal reform measures should be realistic and consider that the ACP countries rely on customs duties for a considerable share of their income.

ACP-CE 2116/03 ACP/61/052/03 MB/nh,sg 10 DG E II EN The ACP believed similar arguments apply to negotiations on access to markets of non- agriculture products. It was agreed in Doha that negotiations would take into account the specific interests of developing countries including reference to partial reciprocity. The ACP States considered this commitment must be kept.

Minister Bello Bouba Maïgari stressed that the ACP are disappointed by the results achieved so far in the intellectual property rights and public health negotiations. They referred to the failure in the implementation of the Doha decision, informed this occurs precisely when a number of developing countries are facing severe public health crisis and welcomed the efforts of the EU to reach an acceptable multilateral solution in this field.

Referring to the Doha development agenda, Commissioner Lamy underlined the scope for ACP-EU alliance arguing the ACP can be a bridge between those in favour of agricultural market opening and those who would prefer the current preference margins to be maintained. As regards agriculture he shared the ACPs views on the risk the "modalities" bring about and pleaded for alliance-building (the attached document "Impact of Harbinson paper on ACP" was circulated during the meeting, Annex II).

Commissioner Lamy was disappointed by WTO talks on special and differential treatment and he proposed to establish cooperation with the ACPs to advance on this issue. He also declared the Commission is ready to discuss the ACPs concerns on regional trade agreements and non-agricultural tariffs compression proposal. In agriculture the EU could consider phasing out export subsidies in areas of particular concern.

ACP-CE 2116/03 ACP/61/052/03 MB/nh,sg 11 DG E II EN On trade negotiations in services the ACP pointed to the unbalanced conditions of partners in developed and developing countries, which deserves careful consideration. Commissioner Lamy acknowledged developing countries have difficulties in defining their objectives and in meeting capacity constraints, but highlighted the importance of services.

As far as the fisheries agreements are concerned, Minister Bello Bouba Maïgari said the ACP fear that talks on subsidies also cover compensation paid under the fisheries agreements - which provide significant income for the ACPs - and they requested the EU to support them in order to prevent any interpretation of the WTO rules which would reduce their revenues.

On the Singapore issues the ACP Group referred to the Doha decision and considered necessary to verify at the 5th WTO Ministerial meeting whether explicit consensus exists on launching negotiations in this area.

Minister Kituyi from Kenya expressed concerns about government procurement against multilateral rules and developing countries market opening. As regards negotiations in services he wondered when a proposal becomes a request.

Commissioner Lamy pointed to the importance of the Singapore issues and said government procurement commitments could be limited to transparency, if necessary, but the modalities for negotiations would in any case be required.

ACP-CE 2116/03 ACP/61/052/03 MB/nh,sg 12 DG E II EN 5. Exchange of views on

i) Mediation between the EU and Thailand and Philippines on exports of canned tuna to the EU

With regard to the conclusions of the mediation between the EU on the one side and Thailand and Philippines on the other side on exports of canned tuna to the EU, Minister Bello Bouba Maïgari declared that the conclusions would have a devastating effect on the ACP economies if they were implemented. Also, the ACP requested to delay the application of the conclusions of the mediator and consider the possibility for the issue to be examined in the framework of the WTO non-agriculture products tariff reduction negotiations. To this end, a joint ACP-EU working group should be tasked to examine possible consequences of implementation of the mediator's recommendations and suggest how to deal with them if the present state of affairs is to be safeguarded.

Commissioner Lamy emphasised that accepting the outcome of the mediation was the best available option. He reminded that in Doha the EU accepted to begin consultations with Thailand and the Philippines on preferential tariff applicable to imports of ACP canned tuna because this was an essential element to obtain the WTO waiver for the Cotonou agreement. The consultations did not lead to an agreement and were thus followed by a WTO mediation, which took place last year. Last December the mediator recommended that the EU opens a quota of 25,000 t of canned tuna at a 12% customs duty.

ACP-CE 2116/03 ACP/61/052/03 MB/nh,sg 13 DG E II EN Commissioner Lamy informed that the Commission is favourable to the adoption of the recommendations because this would be preferable to opening a WTO panel on this issue. He denied the economies of the ACPs would be affected and said the impact of such a measure on imports from ACP countries would be modest. Such quota would represent approximately 4% of total EU consumption. He added that the market for canned tuna is growing in Europe. Also, he considered the price to pay on this issue is reasonable. Commissioner Lamy informed that the Commission intends to propose the conclusions of the mediator to be adopted by the Council and accepted to continue technical discussion with the ACP side on this issue.

ii) Australia and Brazil - EU consultations on sugar

The ACP Group requested to be informed on consultations between the EU, Australia and Brazil. Commissioner Lamy informed that he shares the concerns of the ACPs about a possible WTO challenge by Brazil and Australia to the ECs sugar regime. He wondered whether these countries were using these consultations to balance EU challenges against them or their own challenges against the USA. He reassured the ACP side that the EC will defend the regime and said he would prefer reviewing the sugar regime without WTO challenge. The ACP side insisted that the EU separates the sugar protocol from agriculture subsidies, considers the possibility of avoiding a WTO Panel, and studies the consequences for the ACP in case the issue went to dispute settlement. As regards the request for separation of the sugar regime from the sugar protocol, Commissioner Lamy said the two are linked and if the EU had to phase out the export subsidies, the protocol would also be affected. He also informed that he had received no signal that Australia and Brazil were prepared to solve the challenge "à l'amiable". In reply to the request of an impact study the Commissioner said the ACP and EU should work closely together and added that if Australia and Brazil tried to divide ACP and EU on this matter, political intervention would be required.

ACP-CE 2116/03 ACP/61/052/03 MB/nh,sg 14 DG E II EN iii) New EU proposal on an integrated framework for Fisheries Partnership Agreements with third countries

The ACP Group requested clarifications from the EU on a new scheme of mutual interest, on instruments to evaluate the resources, on the future of existing agreements and on regional partnership agreements.

Commissioner Lamy replied that the EC is envisaging improving sustainable development and the coherence of its external policies. The new approach moves away from the traditional model of fisheries agreements based on market access and is more in line with what was done in the European Union in the common fisheries policy. The aim is rather to jointly manage resources by improving dialogue and introducing a development policy component. He reassured the ACP side by speaking of financial stability, mentioned the issue of conservation of resources and the environment, and said he was open to discuss regional fisheries agreements.

6. Any other business

No issues were raised under this item.

The two sides agreed that technical consultations between the ACP and the Commission would continue on the date and venue of the 5th Joint ACP-EC Ministerial Trade Committee and on the date for the next ACP-EU Ministerial meeting on the negotiations of EPAs.

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ACP-CE 2116/03 ACP/61/052/03 MB/nh,sg 15 DG E II EN ANNEX I

4th Joint ACP-EC Ministerial Trade Committee St. Lucia, 1 March 2003

Presence List - ACP

COUNTRY NAME TITLE Barbados Hon. Billie A. Miller Deputy Prime Minister and Minister of Foreign Affairs and Foreign Trade H.E. Mr Errol Humphrey Ambassador Mr Samuel Chandler Permanent Secretary for Foreign Trade Ms Daphne Kellman Administrative Officer Belize H.E. Dr Henry Canton Ambassador H.E. Ms Yvonne Hyde Ambassador to the EU Ms Nigeli Sosa Chief Executive Officer Mr F. Luciano Cuellar Advisor Benin M. Euloge Hinvi Ambassadeur du Bénin à Bruxelles M. Antoine S. Agbadome Directeur du Commerce Extérieur M. Mathias Labintan Chargé de programme Cameroun M. Bello Bouba Maïgari Ministre d'État S.E. Mme Isabelle Bassong Ambassadeur M. Lazare Essomba Délégué Mme Hélène Malanten Délégué M. Augustin Gang Beng'yela Délégué M. François Etoga Abanda Délégué M. Diablle Mongoleon Délégué M. Henri Bifere Conseiller Commercial M. Charles Tawamba Délégué M. Martin Kenfack Délégué Mme Amélie Yonga Chargé d'Etudes Central African Republic M. Zounguere-Sokambi Ambassadeur M. Bruno Dockon Chargé de Mission au Ministère République de Congo Mme Adelaïde Moundele Ngollo Ministre M. Okoye Alphonse Directeur Général du Commerce M. A Amona Conseiller M. Mougany Attaché au Cabinet Mme. Nonault Ambassade du Congo à Bruxelles Ethiopia H.E. Mr Berhane Gbrechristos Head of Mission to the European Union Ms Berhane G. Hiwot Counsellor

ACP-CE 2116/02 ACP/61/052/03 MB/nh,sg 16 ANNEX I DG E II EN

Fiji Hon. Mr Kaliopate Tavola Minister for Foreign Affairs and External Trade Mr Isikeli Mataitoga Head of Fiji Mission to the EU Mr Ratu Isoa Gavidi Permanent Secretary for Foreign Affairs and External Trade Mr. J. Draunimasi Senior Official Kenya Hon. Dr Mukhisa Kituyi Minister for Trade and Industry Mr. Alex A.K. Keter Permanent Secretary Ms. Rebecca Nabutola Permanent Secretary Ms. Esther Kinama Delegate Mr. Muturi N. Mirie Senior Assistant Director Ms. Irene Gathoni Irungu Trade Development Officer Mr. J.M. Mugodo Delegate Ms Rachel Kileta Kenyan Embassy Mr. Frederick L. Matwanga Economist, Ministry of Foreign Affairs Lesotho Hon. M. Malie Minister of Industry, Trade and Marketing H.E. Ms. Mathato Adel Matlanyane Ambassador Mr K.C. Cekwane Acting Director of Marketing Ms. Palesa Mokete Councellor Ms Mary Theresa Motebang Principal Trade Development Officer Mauritius Hon. Jaya Krishna Cuttaree Minister of Industry and International Trade H.E. Mr. S. Gunessee Ambassador Ms D. Allagapen Principal Assistant Secretary Mr. Servansing Minister-Counsellor Dr. N. Boodhoo High Level Group of Experts Namibia Mr. Bernhardt M. Esau Deputy Minister H.E. Dr Zedekia J. Ngavirue Ambassador Mr Benjamin R. Katjipuka Commercial Counsellor Mr Noko Murangi Deputy Director, Trade Policy and External Relations, Ministry of Trade and Industry Nigeria Mr. A.A. Bosah Minister Counsellor Papua New Guinea Mr. Jonathan Soten Secretary of the Department of Trade and Industry Kapi Maro First Secretary, Embassy of Papua New Guinea, Brussels Mr. Ignatius Kadiko Senior Trade Officer Samoa Hon. Hans J. Keil Minister of Trade, Commerce and Industry Mr. Iulai Lavea Deputy Financial Secretary Mr. Falani Chan Tung Secretary of Trade, Commerce and Industry

ACP-CE 2116/02 ACP/61/052/03 MB/nh,sg 17 ANNEX I DG E II EN

Senegal Mr Cisse Saliou Ambassadeur Mr C.S. Seck Directeur du Commerce Extérieur Mr A.R. Kane Conseiller technique, Ministère de l'Economie et des Finances Mr. Samb Abdourahrane Conseiller St Lucia Hon. Julian R Hunte Minister for Foreign Affairs and International Trade Dr. Arnold Thomas Minister Counsellor H.E. Emmanuel Cotter High Commissioner Mr. McDonald Dixon Trade Advisor H.E. Edwin Laurent Ambassador, Brussels Mr. Edward Harris President, St Lucia Industrial & Small Business Association Ms. Elma Gene Isaac Ministry of External Affairs Mr. Cosmos Richardson Permanent Secretary Dr. Valerie Dorel Consultant Mr. John Calixte Leon External Trade Advisor Mr. Wilfred Pierre National Authorising Officer/EU Operations Ms. Virginia Paul Economic Affairs Officer Mr. Guy Mayers President, St Lucia Chamber of Commerce, Industry and Agriculture Mr. Titus Preville Director of Commerce and Industry Mr. Lawson E. Calderon President, St Lucia Manufacturers Association Mr. Stephen Fevrier Ministry of External Affairs Zimbabwe Mr. Madamombe Permanent Secretary for Industry and International Trade H.E. Mr. G. Punungwe Ambassador Mr. S. Nyakotyo Counsellor

ACP-CE 2116/02 ACP/61/052/03 MB/nh,sg 18 ANNEX I DG E II EN Presence List - Observers

COUNTRY/ORGANISATION NAME TITLE Caribbean Regional Negotiating H.E. Mr. Richard L. Bernal, OJ Director General Machinery (CRNM) Mr. Henry Gill Senior Director Mr. Anthony Gonzales Geneva Representative Mr. Junior Lodge RNM BXL Representative Mr. Nand Bardouille Communications Officer Caribbean Export Development Mr. Vaughn Renwick Executive Director CARIFORUM Mr. Edwin W. Carrington Secretary-General Mr. Leonard Robertson Ms. Fay Housty Director Foreign Policy & External Economic Relations Mr. David Hales Ms. Karen Hales Senior Secretary CEEAC Regrets CEMAC Mme Juliette Engoue Chef de Service de la Régulation COMESA Mr. Mark Pearson Advisor Commission de l'Océan Indien M. Said Salim Mohamed Chargé de Mission CTA Carl B. Greenidge Director, CTA EAC Regrets ECOWAS M. Mame Cor Sene Secrétaire Exécutif Adjoint M. Baber Tandina Chef de la Division des Projets ECS Dr. Arnold Thomas ECS Embassies IGAD IOC M. Said Salim Chargé de Mission IOF OECS Mr. Randolph Cato Director of Economic Affairs Pacific Islands Forum Secretariat Mr. Jaindra Kumar Director of Trade and Investment Division SADC Mr. H. Erasmus Trade Expert UEMOA M. Jan-Luc Senou Représentant Résident de la Commission de L'UEMOA Cuba Victor Ramirez Ambassador Dominica Francis Osborne Riviere Minister Foreign Affairs, Trade and Marketing Dominican Republic H.E. Ms. Clara Quinones Ambassador Ghana H.E. Mr. Kobina Wudu Ambassador Mr. Clement Nyaaba Minister-Counsellor Guinea M. Mamadou Saliou Sow Conseiller Juridique Mme Oumou Bah Chef, Infrastructures Sociales Guyana Hon. Clement J. Rohee Ministry of Foreign Trade and International Cooperation Haiti S.E. M. Leslie Goutier Ministre du Commerce Mr. Pierre-André Dunbard Membre Mr. Raymong Lafontant Jr Membre

ACP-CE 2116/02 ACP/61/052/03 MB/nh,sg 19 ANNEX I DG E II EN

Jamaica Hon. K.D. Knight, MP Minister of Foreign Affairs & Foreign Trade St. Vincent Louis H. Straker Deputy Prime Minister Nathaniel Williams Trade Officer Trinidad & Tobago Hon. Kenneth Valley Minister of Trade & Industry Mr. Bernard Sylvester Assistant Director, Ministry of Trade and Industry Ms. Razia Ali Director, Department of International Trade, Ministry of Trade and Industry Ms. Jacqueline Charles Senior Economist, Ministry of Trade and Industry Ms. Urvashi Ramnarine Foreign Service Officer

Presence List - ACP Secretariat

NAME TITLE Mr Jean-Robert Goulongana Secrétaire Général Ms Adelaide P. Mkhonza Assistant Secretary General Mr François Jackman Chef de Cabinet Mr Alioune Senghor Conseiller Juridique Principal Mr. Hegel Goutier Attaché de presse Mr. Morgan K. Githinji Expert, Multilateral Trade Matters Dr. Kathy-Ann Brown Consultant Mlle J. Bonieux Interprète Mme Handane-Sarr Interprète M. S. Rogers Interprète Mme K Marcelle-Harper Interprète Ms. Janet Abu Private Secretary Mr. Marwa Kisiri Head of ACP Geneva office

ACP-CE 2116/02 ACP/61/052/03 MB/nh,sg 20 ANNEX I DG E II EN Presence List - EU Countries

COUNTRY NAME TITLE Austria Gabriele Tschurtz Deputy Director-General Belgium Denmark Finland France Mr. J.P. Colnard Conseiller commercial Mr. Thierry Pietrzak Chargé d'Affaires Germany H.E. Mr. Ulrich Nitzschke Ambassador Greece Mr. Athanassios M. Valassidis Ambassador Mr. Nicolas Patakias First Counsellor Italy Ireland Mr. Peter F. Smyth Deputy Director, Department of Foreign Affairs Netherlands Ms. W. Van Der Wal First Embassy Secretary Portugal Spain Sweden Mattias Frumerie Second Secretary, Permanent Representation United Kingdom Mr. Holland Deputy High Commissioner, Barbados Ms. Tamsin Vernon International Trade Department of DFID

Presence List - EU Commission

NAME TITLE Mr Pascal Lamy Commissioner for Trade Mr. Redonnet Member of Commissioner Lamy's Cabinet Mr K.F. Falkenberg Director, DG Trade Mr. De Visscher Head of Delegation, Guyana H.E. Mr. John Caloghirou Head of Delegation, Barbados Mr. Gerd Jarchow Head of Delegation, Jamaica H.E. Mr. Marcel Van Opstal Head of Delegation, Haiti Mr. Brian Kelly Economic Advisor Mr. Remco Vahl DG Trade Mr. Hans Lancee EU Delegation, Barbados

Presence List - EU Council

NAME TITLE Mr. Jeremy Rand Secretariat of the ACP-EC Council of Ministers Mr. Massimo Bianchi Secretariat of the ACP-EC Council of Ministers

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ACP-CE 2116/02 ACP/61/052/03 MB/nh,sg 21 ANNEX I DG E II EN ANNEX II

IMPACT OF HARBINSON PAPER ON ACP

The First Draft of Modalities for the WTO agriculture negotiations of 17th February 2003 (NV/AG/W/1) œ hereafter referred to as the Harbinson proposal œ is fundamentally unbalanced. Unbalanced in that it does not reflect the manner by which agricultural policies distort trade, and unbalanced against developing countries which rely on tariff preferences. This note explains how it compares to the EU's own proposal and how it is not in the interest of the ACP.

1. MARKET ACCESS

1.1. The market access provisions will make ACP preferences meaningless

The Harbinson proposal on tariff reduction would erode the margin of preferences granted to the ACP to an unacceptable degree.

Market access would become an instrument to accommodate developed country exporters instead of a means to differentiate access for the benefit of the developing world.

The non-preferential tariff on agriculture imports of importance to the ACP into the EU is 41%, according to a weighted average. Since ACP are to a large degree exempt from these tariffs under the Cotonou preferences, 41% approximately corresponds to the average margin of preference for the ACP.

Under the Harbinson proposal, the MFN rate would be reduced to an average of 19.5%. Therefore, the level of the average ACP preference margin on agricultural products would be reduced by more than half.

ACP-CE 2116/02 ACP/61/052/03 MB/nh,sg 22 ANNEX II DG E II EN The attached statistical analysis1 illustrates the difference between the EU proposal2 and the Harbinson proposal3 in the level of tariff reduction for the most important ACP agriculture exports.

Moreover, under the EU proposal the ACP could continue to benefit from flexibility for particularly sensitive products4. Therefore, the attached analysis also shows the difference between this minimum EU reduction and the Harbinson proposal. Finally, the analysis also presents a comparison with the US proposal5.

These comparisons show that the EU proposal is by far the most favourable for the ACP in terms of maintaining their preference to its market.

For example, the statistics show that:

ACP banana exports would enjoy between 30% and 57% less preferential margin to the EU's market under the Harbinson proposal than under the EU proposal.

ACP fresh beef exports would have between 9% and 22% less preferential margin, and between 25% and 47% for frozen beef exports.

Long grain brown rice would lose between 10% and 26% preferential margin, broken rice between 10% and 24% and milled rice between 12% and 29% preferential margin under the Harbinson proposal compared to the EU proposal.

1 These figures should be used as broad guidelines of impact rather than precise predictions due to certain technical difficulties in their calculation (such as converting specific tariffs into ad valorem tariffs). 2 36% average reduction. 3 Average reduction of 60% for ad valorem tariffs over 90%, 50% for ad valorem tariffs between 15% and 90%, and 40% for ad valorem tariffs less than 15%. 4 15% minimum reduction. 5 The Swiss formula proposal, with a maximum of 25% tariff.

ACP-CE 2116/02 ACP/61/052/03 MB/nh,sg 23 ANNEX II DG E II EN 1.2. The market access provisions will threaten the value of special preferential access arrangements, such as the Sugar Protocol

Whilst the EU proposal provides for a sufficient degree of flexibility, the Harbinson proposal would have a dramatic effect on the most sensitive ACP products, such as sugar.

The LDCs and the Sugar Protocol beneficiaries have their access to the EU's sugar market effectively protected by a prohibitive MFN tariff. Under the Harbinson proposal, this tariff would be cut significantly. This would open the door to sugar imports from any destination and the EC market price would fall considerably.

1.3. The market access provisions do not sufficiently improve ACP access to non-EC markets

The EC, in its proposal, made far-reaching suggestions in favour of developing and least developed countries (LDCs). Thus it proposed that schemes equivalent to the EU's Everything But Arms initiative in favour of LDCs should be enacted by all developed WTO members and that at least 50% of imports from developing countries should be duty-free. The Harbinson proposal does not take up these suggestions.

Under the Harbinson proposal, LDCs would not have guaranteed duty and quota free access to all developed country markets.

2. EXPORT SUBSIDIES

The Harbinson paper has no flexibility to take the impact on developing countries into account when phasing out export subsidies. Some ACP countries are net-food importing countries who in fact benefit from lower priced imports.

ACP-CE 2116/02 ACP/61/052/03 MB/nh,sg 24 ANNEX II DG E II EN 3. NON-TRADE CONCERNS

Non-trade concerns are ignored in the Harbinson proposal whereas many ACP countries acknowledge the role of agriculture beyond simple economic considerations and share the EC‘s view that non-trade concerns, such as food security, should be taken into account more systematically.

ACP-CE 2116/02 ACP/61/052/03 MB/nh,sg 25 ANNEX II DG E II EN