Seán Sherlock (Cork East, Labour) | Oireachtas source

I thank the Chairman for his expression of congratulations. I will be sure to convey the message to the Minister, Deputy Charles Flanagan, and the team involved in the talks at Stormont House.

I am joined by Ms Dympna Hayes and Ms Mary Barrett from the Department of Foreign Affairs and Trade and Ms Lorraine Benson from the Department of Jobs, Enterprise and Innovation. If there are any very technical questions which I am not able to answer, we have three experts here. I thank the Chairman and members for this opportunity to discuss the two motions before us, which have been referred to the select committee for consideration. The motions seeks Dáil approval of the terms of the EU’s economic partnership agreements with 15 Caribbean countries and with 16 west African states and their two regional economic organisations.

As members of the committee are aware, the agreements in question involve mixed competence. This means they cover matters falling within the exclusive competence of the European Union, such as the common commercial policy, as well as issues which remain within the competence of member states, such as development co-operation. For this reason, each EU member state is a party to these two agreements and they can only formally enter into force after they have been ratified by all member states. In Ireland’s case, the approval of Dáil Éireann is required prior to ratification whenever the terms of the agreement involve the possibility of a charge on public funds.

As it can take a considerable length of time before ratification procedures are completed in all 28 member states, arrangements are usually made for some aspects of agreements such as these to be applied on a provisional basis pending their formal entry into force at a later date.

These two agreements are significant in that they are the first full economic partnership agreement, EPA, signed between the EU and African, Caribbean and Pacific, ACP, countries. Members of the committee will recall that historically ACP countries benefited from unilateral trade preferences with the EU. However, these were deemed to violate World Trade Organization, WTO, rules on the basis that they established unfair discrimination between developing countries.

In 2000, the EU and 77 ACP states concluded an agreement known as the Cotonou Agreement. This provided for a new trade and development framework based on EPAs. These are a new type of multilateral agreement combining both trade and wider development issues in a unified framework and containing reciprocal preferences in trade between the EU and ACP states. On this basis, in 2001 the WTO agreed to give a waiver to the EU to continue the unilateral preferences until 31 December 2007 when these agreements were expected to come into effect. The original intention was for the EU to conclude comprehensive EPAs with the six regional groupings of ACP states.

Following protracted and difficult negotiations, only the Caribbean was in a position to initial a full EPA before the December 2007 deadline. Twenty-one other ACP countries initialled interim agreements in smaller subgroups or individually. In west Africa, two interim EPAs were concluded with Ghana and the Ivory Coast. The interim agreements have been acting as building blocks to full EPAs, negotiations on which have been ongoing in Africa and the Pacific. Last year, a full EPA was signed with west Africa and negotiations were concluded on two full EPAs with the east African community and southern African development community EPA states.

These EPAs are pioneering agreements in the international trading system. They are the first genuinely comprehensive north-south trade agreements which seek to promote sustainable development, build a regional market among developing countries and help eliminate poverty. The agreements seek to put trade at the service of development. The EU’s trade and development partnership with the ACP states stretches back more than 30 years. These agreements build on that partnership. The aim is to make it easier for people and businesses from the EU and the Caribbean and west Africa to invest in and trade with each other, thus helping Caribbean and west African countries grow their economies and create jobs.

I will now introduce the EU-CARIFORUM economic partnership agreement to the committee for approval. The agreement is between the EU and its member states and the Caribbean forum of African, Caribbean and Pacific states, CARIFORUM. The CARIFORUM members party to this agreement are Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, the Dominican Republic, Grenada, Guyana, Haiti, Jamaica, Saint Lucia, Saint Vincent and the Grenadines, Saint Christopher and Nevis, Suriname and Trinidad and Tobago. The agreement was signed in the Caribbean on 15 October 2008 and Guyana signed on 21 October 2008. It entered into provisional application on 29 December 2008. The EU worked together with the Haitian authorities to adjust some of that country’s tariff commitments in light of its specific needs as a least developed country. This made it possible for Haiti to sign the agreement on 10 December 2009. As of now, it has been ratified by 17 EU member states and eight CARIFORUM states.

The agreement comprises six parts. Part I, trade partnership for sustainable development, sets out the objectives of the agreement with specific articles on sustainable development, regional integration and monitoring. It recognises development co-operation as an essential factor of the agreement with the EU to support implementation of the agreement via the European Development Fund and other relevant instruments. EU member states undertake to provide support via its development policies and instruments, in accordance with complementarity and aid effectiveness principles.

Part II, trade and trade related matters, removed tariffs and quotas on CARIFORUM exports to the EU immediately. From the Caribbean side, there is a gradual opening of markets covering 61.1% of the value of CARIFORUM imports from the EU over ten years, 82.7% over 15 years and 86.9 % over 25 years. The agreement contains considerable flexibility for the Caribbean countries to exclude sensitive products and industries from liberalisation. The main exclusions from tariff cuts are agricultural and processed agricultural products, some chemicals, furniture and other industrial products. The agreement provides for rephasing of the CARIFORUM liberalisation schedule if serious difficulties arise in respect of specific imports. It also provides for possible modification of the CARIFORUM commitments, having regard to the special development needs of nine of the CARIFORUM countries.

Part II also includes provisions on investment, trade in services and electronic commerce. The EU is making substantial concessions in the services sector, opening up new markets for Caribbean companies, investors and professionals to offer services in the EU in areas like international phone calls, banking and architectural services, including new services sectors such as entertainers, chefs de cuisine and fashion models. In turn, CARIFORUM countries have also made offers, in particular in export-oriented and infrastructure sectors key for their development, such as telecommunications, transport, tourism, manufacturing and environmental services.

Part II covers trade defence instruments and non-tariff measures. It includes provisions to support WTO and other multilateral compliance and co-operation with regard to customs and trade facilitation, agriculture and fisheries, technical barriers to trade as well as sanitary and phytosanitary measures. The agreement seeks to improve the business climate and boost trade. To this end, Part II also covers commitments in trade related issues such as competition, innovation and intellectual property, public procurement and the protection of personal data, along with complementary co-operation and assistance. There are provisions to protect and uphold environmental standards and workers’ rights while guaranteeing the rights of the CARIFORUM countries to regulate and manage their own affairs.

On the trade aspects of the agreement, under Protocol I, Caribbean countries now benefit from improved rules of origin that support the development of industries that import materials to make goods for onward export to the EU. This is important for industries such as processed food or fisheries which might import raw materials from outside the Caribbean.

Part III outlines the procedures for dispute avoidance and settlement. Part IV provides for general exceptions, for example, in the areas of security and taxation. Part V provides for supervision and monitoring of the agreement via a ministerial council and three committees comprising senior officials, parliamentarians and civil society representatives. Part VI covers sundry general and final provisions.

Last July, the Caribbean EPA ministerial joint council reviewed the first five years of implementation of the agreement. A study conducted as part of the review found that efforts to implement the EPA were hampered by the global recession which hit just as it was being signed in 2008. Our Caribbean EPA partners are all small island developing states and were particularly impacted, given their openness to the global financial and economic system and high dependence on a narrow range of income-generating sectors such as tourism. Nonetheless, the study found a positive EPA effect for some agricultural and industrial exports from the Dominican Republic and for products such as rice, frozen shrimp, citrus and rum in the other CARIFORUM countries.

The study identified five big ticket items to be addressed. The first of these is ratification by all CARIFORUM and EU states.

With my attendance at the committee today, I hope Ireland can play its part in addressing the recommendation. Other actions recommended are continued support to the regional and national EPA units and substantive discussion on a regional development fund, and continued engagement with the private and public sector on the EPA. The other two recommended actions have already been addressed, namely, the establishment of a sub-committee on development and the convening of the consultative committee, and the establishment of a monitoring task force. The July EPA CARIFORUM-EU ministerial council concluded that in spite of the challenges which had so far confronted implementation, the EPA has tremendous potential for contributing to the sustainable development of CARIFORUM states.

Between 2008 and 2013, the EU, including Ireland through our contributions to the European Development Fund, supported a €75 million EPA implementation programme for governments and businesses. This was part of a wider €165 million EU package promoting regional integration in the Caribbean. Additional support was provided bilaterally by the United Kingdom, Germany and Spain. From 2014 to 2020, the EU will provide a further €102 million for region-wide development programmes, with regional integration and EPA implementation among their main goals. This is one of three focal sectors in a package of €346 million, the others being climate change and crime and security. Implementation in all three sectors will be boosted by the work of the Caribbean Investment Facility, which will receive €135 million to blend grant resources with additional funding, notably from European and regional finance institutions and the private sector, to facilitate the mobilisation of much-needed key infrastructure investment.

I introduce the EU-West African EPA to the committee for approval. The agreement is between the EU and its member states and the west African states, the Economic Community of West African States, ECOWAS and the West African Economic and Monetary Union, UEMOA. The 16 west African states are Benin, Burkina Faso, Cape Verde, Gambia, Ghana, Guinea, Guinea-Bissau, Ivory Coast, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone and Togo. The agreement was signed by Ireland on 12 December 2014 and in west Africa on 15 December 2014. All EU member states and 13 of the 16 west African states have signed. Gambia, Nigeria and Mauritania have yet to sign. The agreement comprises seven main parts. Part I, entitled "Economic and trade partnership for sustainable development," sets out the objectives and principles of the agreement, with specific articles on economic growth, sustainable development and regional integration. Part II, entitled "Trade policy and questions concerning trade," removes tariffs and quotas on west African exports to the EU immediately. West Africa will liberalise 75% of tariff lines over 20 years, with no liberalisation in the first five years. A wide range of west African goods considered most sensitive are permanently excluded from the requirement to liberalise, ranging from agricultural goods to industrial goods and including the following: meat and poultry; processed meat; fish and fish products; milk and milk products; eggs; cocoa and cocoa preparations; cement; and textiles and apparel. At the same time, the progressive elimination of tariffs on goods such as equipment and other inputs will make them cheaper for local businesses. In addition to this gradual and controlled liberalisation, west African countries will be able to avail of safeguards if imports of liberalised products are increasing too quickly and jeopardising local markets or where food security is threatened. Special protection is also foreseen for infant industries. In addition, the agreement recognises the special development needs of west African countries and provides scope to change their tariff commitments.

Part II of the agreement also covers trade defence instruments and non-tariff barriers. It includes provisions to support WTO and other multilateral compliance and co-operation with regard to the following: technical barriers to trade, sanitary and phytosanitary measures; facilitation of trade, customs co-operation and mutual administrative assistance; and agriculture, fisheries and food security. Specifically on agriculture and fisheries, the EU will not subsidise exports of EU farm products to the region, and a high-level dialogue on agricultural policies will be established, creating transparency and improving coherence on agricultural matters within the region and with the EU. In conclusion, on the trade aspects of the agreement, under Protocol 1, west African countries will benefit from improved rules of origin which will allow them to source materials from other countries to produce duty-free exports to the EU.

Part III of the agreement, entitled "Cooperation for implementation of development and achievement of the objectives of the EPA," provides for support from the EU via the European Development Fund and other relevant instruments and from EU member states in accordance with aid effectiveness, co-ordination and complementarity principles. The agreement links support to the EPA development programme, known by its French acronym PAPED. The PAPED was developed during the negotiations by the west African parties. The conclusions of the EU Council of Ministers of 10 May 2010 and 17 March 2014 confirmed the commitment of the EU and its member states, with more than €8.2 billion provided in the period 2010 to 2014 and a commitment by the EU to provide at least €6.5 billion for the period 2015 to 2020. The latter amount corresponds to the existing needs as estimated by the west African authorities.

Of the €3 billion to be delivered by the EU institutions, the delivery of almost €1.2 billion by 2016 has already been committed to. Following discussions with west African countries, support will focus on key priority sectors relating to trade, including agriculture, infrastructure, energy and capacity building for developing civil society. The European Commission is in discussions with member states and the west African countries to co-ordinate the response to the PAPED, and Ireland is taking part in these ongoing discussions to determine how we can best assist in implementation of the agreement.

Part IV of the agreement outlines the procedures for dispute avoidance and settlement. Part V provides for general exceptions - for example, in security and taxation. Part VI provides for supervision and monitoring of the agreement via a ministerial council and three committees comprising senior officials, parliamentarians and civil society representatives. Part VII covers final provisions. These include a provision for the suspension of trade benefits where any party fails to fulfil its obligations on human rights, democratic principles, the rule of law and good governance under the Cotonou Agreement. There is also a revision clause providing for the agreement to be assessed or reviewed every five years while also allowing review as required.

I thank the committee for its time. I am happy to recommend these two agreements for approval. They present a strategy to assist our Caribbean and west African partners to build larger markets and foster trade in goods and services as well as stimulate investment. They reaffirm the EU's commitment to a close trade and development partnership with the two regions. I encourage the committee to recommend to Dáil Éireann that the two proposed motions be approved so that Ireland is in a position to notify the Council of the completion of its ratification procedures. I am happy to take questions, and if there are any very difficult questions that I cannot answer, I have a very competent team of experts with me.