Interim Agreement establishing a framework for an Economic

EXPLANATORY

MEMORANDUM

ON

AN

INTERIM

AGREEMENT

ESTABLISHING

A

FRAMEWORK

FOR

AN

ECONOMIC

PARTNERSHIP

AGREEMENT

BETWEEN

THE

EASTERN

AND

SOUTHERN

AFRICA

STATES,

ON

THE

ONE

PART,

AND

THE

EUROPEAN

COMMUNITY

AND

ITS

MEMBER

STATES,

ON

THE

OTHER

PART.

TITLE

OF

TREATY

Interim

Agreement

establishing

a

framework

for

an

Economic

Partnership

Agreement

between

the

Eastern

and

Southern

Africa

States,

on

the

one

part,

and

the

European

Community

and

its

Member

States,

on

the

other

part.

Command

Paper

Number:

9

6

h

S

SUBJECT

MATTER

1.

The

Agreement

presented

in

this

instrument

represents

the

outcome

of

the

Economic

Partnership

Agreement

(EPA)

negotiations

undertaken

by

the

European

Commission

(acting

on

behalf

of

the

European

Union

and

its

Member

States)

with

Eastern

and

Southern

Africa

States.

The

specific

ESA

countries

who

are

signatories

are

Madagascar,

Mauritius,

the

Seychelles

and

Zimbabwe.

2.

The

Agreement

was

signed

by

all

parties

on

29

August

2009

and

has

been

provisionally

applied

since

14

May

2012.

3.

The

Agreement

was

designated

as

a

Multi

Party

Trade

agreement

between

the

EU

and

its

Member

States

and

the

signatory

ESA

countries.

4.

The

UK

Government

is

proceeding

to

ratify

the

EPA

in

line

with

agreed

policy

that

the

UK

should

continue

to

ratify

signed

third

country

agreements

with

the

EU

before

the

UK

exits

the

EU.

UK

ratification

of

existing

EU

agreements

is

consistent

with

our

support

for

the

EU

’

s

trade

agenda

while

we

remain

a

Member

State.

NATURE

OF

THE

AGREEMENT

5.

An

EPA

is

a

development-focused

trade

agreement

which

aims

to

promote

trade

and

development.

It

provides

for

a

Preferential

Trade

Agreement

between

the

ESA

EPA

States

and

the

EU

in

line

with

World

Trade

Organization

(WTO)

rules,

while

supporting

regional

economic

development

and

integration.

6.

The

key

benefits

of

the

Agreement

are:

a)

Supporting

economic

growth

in

the

ESA

EPA

States

b)

Supporting

sustainable

development

in

the

ESA

EPA

States

c)

Strengthening

regional

integration

in

the

ESA

EPA

States

d)

Providing

increased

trade

opportunities

for

the

EU

7.

In

the

Agreement,

the

EU

commits

to

providing

immediate

duty-free

quota-free

access

to

goods

from

the

ESA

EPA

States.

In

exchange,

the

ESA

EPA

States

have

committed

to

more

gradual

tariff

liberalisation

taking

place

over

a

period

of

12-20

years.

However,

sensitive

products

are

excluded

from

full

liberalisation.

8.

The

Agreement

allows

for

both

parties

to

take

measures

to

protect

their

markets

in

particular

circumstances

using

the

safeguard

provisions

in

the

Agreement.

For

example,

the

ESA

EPA

States

can

raise

duties

or

impose

quotas

on

EU

imports

that

cause

or

threaten

to

cause

disturbances

in

an

economic

sector

or

serious

injury

to

a

domestic

industry.

9.

The

Agreement

contains

provisions

on

customs

administration

and

trade

facilitation

which

re-affirm

that

customs

legislation

and

procedures

will

comply

with

existing

international

standards

such

as

the

World

Customs

Organisation

(WCO).

These

provisions

also

provide

for

cooperation

and

coordination

on

customs

matters

between

customs

agencies.

10.

The

Agreement

contains

provisions

on

technical

barriers

to

trade,

including

sanitary

and

phytosanitary

(food

safety,

animal

and

plant

health)

measures.

The

aim

of

these

provisions

is

to

avoid

unnecessary

obstacles

to

trade

as

a

result

of

technical

regulations.

Via

these

provisions

both

the

EU

and

the

ESA

EPA

States

affirm

their

commitment

to

existing

international

agreements.

11.

The

Agreement

provides

a

dispute

settlement

mechanism

and

the

establishment

of

an

EPA

Committee

in

which

both

the

EU

and

the

ESA

EPA

States

are

equally

represented.

12.

The

Agreement

commits

all

signatories

to

working

towards

sustainable

development,

including

upholding

social

and

environmental

standards.

It

also

establishes

a

consultation

procedure

of

environmental

or

labour

issues

and

defines

a

comprehensive

list

of

areas

of

collaboration

on

sustainable

development

matters.

The

Agreement

sets

up

a

range

of

joint

institutions

to

monitor

and

assess

the

impact

of

the

implementation

of

EPAs

on

sustainable

development.

13.

The

EU

has

made

a

range

of

commitments

in

the

Agreement

on

development

support,

so

as

to

ensure

that

the

Agreement

is

effectively

implemented,

and

that

the

opportunities

it

offers

can

be

fully

realised.

14.

In

terms

of

bilateral

trade

between

the

UK

and

Eastern

and

Southern

Africa

countries,

UK

exports

and

imports

to

the

ESA

countries

averaged

£491

m

and

£712m

respectively

between

2014

and

2016.

UK

trade

with

ESA

EPA

States

is

relatively

very

small:

between

2014

and

2016,

trade

with

ESA

EPA

States

averaged

0.1%

of

total

UK

international

exports

and

imports.

The

main

trading

partner

for

UK

companies

from

the

ESA

EPA

States

is

Mauritius,

which

accounted

for

65%

of

UK

exports

to

the

bloc

and

72%

of

imports.

MINISTERIAL

RESPONSIBILITY

15.

The

Secretary

of

State

for

International

Trade

has

primary

responsibility

for

trade

policy.

The

Secretary

of

State

for

International

Development

has

primary

responsibility

for

development

matters.

Given

the

provisions

of

this

EPA,

other

Secretaries

of

State

with

an

interest

in

this

policy

area

include

the

Secretaries

of

State

for

Foreign

and

Commonwealth

Affairs

and

Environment

Food

&

Rural

Affairs

as

well

as

the

Chancellor

of

the

Exchequer.

POLICY

CONSIDERATIONS

(i)

General

16.

The

Agreement

represents

the

outcome

of

the

EPA

negotiations

undertaken

by

the

European

Commission

(acting

on

behalf

of

the

European

Union

and

its

Member

States)

with

Eastern

and

Southern

Africa

countries.

17.

EPAs

aim

to

promote

increased

trade

and

investment

by

putting

our

trading

relationship

on

a

more

equitable,

mature

and

business-like

footing,

supporting

sustainable

growth

and

poverty

reduction.

The

UK

is

a

long-standing

supporter

of

EPAs

and

continues

to

support

the

EU

’

s

agenda.

The

Agreement

is

consistent

with

the

UK

’

s

objectives

in

trade

policy

for

free,

fair

and

open

markets

and

also

with

wider

policy

goals,

including

in

terms

of

development

policy.

18.

The

UK

Government

is

committed,

in

line

with

agreed

government

policy

to

ratify

and

implement

this

Agreement

which

is

designed

to

improve

trade

and

investment

and

act

as

a

driver

for

economic

and

social

development.

19.

Until

29

March

2019,

the

UK

remains

a

full

member

of

the

EU

and

all

the

rights

and

responsibilities

of

EU

membership

remain

in

force.

During

this

period,

the

Government

will

also

continue

to

implement

and

apply

EU

legislation

including

implementation

of

EU

third

country

agreements.

The

Government

is

fully

committed

to

supporting

FTAs

(including

EPAs)

whilst

we

remain

EU

members.

The

Government

therefore

proposes

to

move

ahead

with

ratification.

20.

This

policy

is

also

consistent

with

the

UK

seeking

continuity

in

its

current

trade

and

investment

relationships

post

exit,

including

those

covered

by

EPAs

and

other

trade

agreements.

(ii)

Financial

21.

There

are

no

direct

financial

implications

for

the

UK

as

a

result

of

this

EPA.

UK

Businesses

may

face

some

increased

competition

from

ESA

firms.

These

impacts

are

expected

to

be

negligible

as

the

major

goods

exports

of

the

ESA

States

are

generally

not

goods

produced

by

British

firms.

22.

The

UK

Exchequer

will

receive

less

income

from

customs

duties

as

a

result

of

reduced

tariffs

on

imported

goods.

Again,

this

impact

is

expected

to

be

negligible.

(iii)

Reservations

and

Declarations

23.

None.

IMPLEMENTATION

24.

The

Agreement

will

need

to

be

specified

as

a

Community

Treaty

by

Order

in

Council

in

accordance

with

section

1(3)

of

the

European

Communities

Act

1972

in

order

to

have

legal

effect

in

the

UK.

Further

new

implementing

legislation

is

not

currently

envisaged.

CONSULTATION

25.

The

Trade

and

International

Development

Parliamentary

Scrutiny

and

Select

Committees

were

consulted

on

the

proposals

relating

to

signature,

provisional

application

and

conclusion

of

this

Agreement

in

2009.

26.

Throughout

these

EPA

negotiations,

DIT

and

its

predecessor

departments

(including

the

Department

for

Business,

Innovation

and

Skills

(BIS))

along

with

the

Department

for

International

Development

have

actively

engaged

and

consulted

with

business,

overseas

officials

in

ESA

countries,

British

Non-

Governmental

Organisations

(NGOs),

across

Government,

and

have

represented

agreed

policy

to

the

European

Commission.

GEORGE

HOLLINGBERY,

MINISTER

FOR

TRADE

DEPARTMENT

FOR

INTERNATIONAL

TRADE