1. EU support for EPA
implementation and regional
integration agenda on
services and investment
Alex Nakajjo
28th-29th May 2008
European Commission
DG Development and
Relations with ACP States

2. Outline
1. Development support for Services
• Background: legal basis in Cotonou &
IEPA
• EU instruments
• Actions that could be supported
2. Services and regional integration

3. Cotonou and IEPAs
• Cotonou.
– Chapter 2. Investment &PSD. Art 21.1:
•« The Cooperation shall support
necessary eco and inst reforms at
national & regional level aimed at
favourable envt for private investment &
dev of a competitive private sector. […] »
• Chapter 4. Trade in Services. Art 41.1:
•« The Community shall support the ACP
States’ efforts to strengthen their
capacity in the supply of services. […] »

4. Cotonou provisions cont-
–Chapter 2. Regional cooperation
and Integration. Art 28:
“Cooperation shall provide effective
assistance to achieve the objectives
and priorities, which the ACP
countries have set themselves in the
context of regional and sub-regional
cooperation and integration. « […] »

5. Cotonou provisions cont-
• Cooperation in the area of regional
economic integration and regional
cooperation should support the main fields
identified in articles 29 and 30 of the
Cotonou Agreement. Furthermore, article
35 provides that “economic and trade
cooperation shall build on regional
integration initiatives of ACP States

6. IEPA Provisions
• EAC interim EPA: Chapter V. Article 37.
notes that negotiations will continue in
the areas of trade in services and trade
related issues including investment.
• On the Development cooperation, the EAC
IEPA notes recognition of development
needs and parties agree to work together to
define and address development needs.

7. IEPA Provisions
• Other IEPA in the ESA region make reference to the
Development Matrix developed by the region as a
basis for cooperation. The Matrix identifies the main
areas where support is needed in order to fully
benefit from regional integration and an EPA. These
address supply-side constraints (infrastructure
development, productive capacity, private sector
development), trade policy and regulations, and
adjustment costs.

8. IEPA Provisions
– Types of Interventions (non-exhaustive list):
• policy development;
• legislation and regulatory framework development;
• institutional/organizational development;
• capacity building and training.[1];
• technical advisory services;
• administrative services;
• support in SPS and TBT areas
• operational support including equipment, materials and related
works
.[1] "capacity building“: may include in particular training, institutional
development, organizational development (structures and procedures),
inter-institutional communication and cooperation procedures, operational
support.

9. Instruments
1. COMESA Regional Indicative Programme –
9th and 10th EDF
2. Country National Indicative Programmes
3. EU Member States own instruments
4. Other community instruments:
• EIB Investment Facility
• Horizontal all-ACP instruments: Infrastructure
and Energy partnerships

10. RIP – 9th EDF
• Under the 6th, 7th and 8th EDFs, the ESA-IO region had three
separate regional indicative programmes, aimed mainly at
functional cooperation.
• Current RIP under 9th EDF-moved from predominantly
functional cooperation to policy support
• Focus on:
– Regional economic integration and trade agenda
– sustainable management of natural and marine resources
– Socio-economic infrastructure-Transport and communications
(incl. water and energy)
• And also:
– Agriculture and food security ; HIV-AIDS ; Gender; Peace and
security

11. RIP – 10th EDF
• 10th EDF should enter into force in the coming
weeks.
• The RIP is in the process of finalisation: Commission
aims to sign it later this year (€645Mn).
• Opportunity to integrate priorities from
COMESA/EAC’s integration Agenda and second
phase of EPA negotiations.
• RIP would also build on needs identified by Regional
Preparatory Task Force (RPTF)
• Intention to limit number of intervention areas and
increase focus on trade and regional integration.

12. Indicative Prioties-RIP10th EDF
• Indicative Programme ESA-IO €645m
• Regional Economic Integration (including
Infrastructure, and Natural Resources,
Environment and Food Security): 85 percent
of the total allocation.
• Regional Political Integration/
Cooperation : 10 percent of the total
allocation.
• Other programmes: 5 percent of the total
allocation.

13. RIP 10th EDF
• major interventions foreseen shall be
-Trade-Related assistance and Capacity Building
- Alleviation of the impact of economic and fiscal adjustments on public
expenditure
- Support private sector development
- Removal of Supply-Side Constraints
- Improvement of land and water resources management to develop
agricultural and food production
- Improve the capacity of the region in deriving economic benefits from
its marine resources and managing it in a sustainable way

14. National indicative programme
• Each country has NIP which target addressing
country specific constraints.
• For Uganda, €439Mn is provided for 2008-2013
• Budget Support: 42% includes €7Mn to trade and
MTTI capacity building
• Focal sector 1: Support to Transport sector(39%).
• Focal sector 2: Rural Development (14%)
• Non focal sector: 5% -non state actors,
democratisation, etc.

15. EU Member States contrib.
• The Member States of the European Union
collectively undertake to support, by means of their
respective development policies and instruments,
development cooperation activities for regional
economic cooperation and integration and for the
implementation of the cotonou and EPAs agreement
• The main areas of donor intervention are trade,
regional integration, agriculture, infrastructure,
telecommunications including information
technology, environment and marine resources
management, food security, disaster management,
peace and security and capacity building.

16. EU Member States contrib.
• Several EU MS have participated in RPTF.
• AfT Strategy: EU to make available €2bn per
year on trade-related assistance (half EU MS
and half Commission).
• ACP countries should receive in the range of
50% of the funds (an increase of €300-
400Mn a year)

17. EU Financial contribution
• Between 2001-2005, €3,3 b was received
at the national level by the ESA countries
from the EU (MS & EC) to cover areas of
trade policy and regulations, building
productive capacity, and trade-related
infrastructure. Out of this amount,
infrastructure accounts for almost 60 %
(€2 billion), building productive capacity for
39% (around €1.3 billion), and Trade
Policy and regulations for 1% (€32 million).

18. EU Financial contribution
• In addition, the countries in the region have
had access to global and regional
programmes. The EC provided €1.1 billion
for Trade-related Infrastructure for the ESA
countries and the EU Member States €851
million. The EU Member States provided
together 69% of the €1,3 billion for Building
productive capacity in ESA countries and the
EC two thirds of the amounts devoted to
trade related assistance.

19. Other Community Instruments
• EIB Investment Facility
• Infrastructure partnership and Energy
facility

20. Identification of needs : RPTF
• Regional Preparatory Task Force
(RPTF)
– Link EPA negotiations with development
cooperation
– Ensure complementarity among
development partners

21. Identification of needs
• Priorities in line both with comprehensive
EPA and COMESA/EAC’s own agenda, in
particular multi-annual business plan and
the Regional Indicative Strategic
development Plan RISDP.
• Possibility to identify additional priorities in
the context of the EPA negotiations on
services and investment :
• Private sector development.

22. Identification of needs : RPTF
• RPTF identified priority areas for support:
1) Trade in goods
2) Trade data (essentially statistics)
3) EPA implementation and future negotiations.
4) Trade in core services
5) Trade related issues (competition, investment,
IPR, public procurement, labour and
environment).

23. Identification of needs : RPTF
4) Trade in core services:
• Sectors identified: Transport, Finance
(banking/insurance), Tourism, Professional Services,
Education, Construction and engineering
• Types of activities:
– Capacity building (e.g. to conform to international
standards, equipment)
– Institution building (e.g. regulatory frameworks)
– Needs assessment studies / Impact assessment studies
– Establishment of regulatory bodies (e.g. in finance)
– Support for promotion and marketing institutions (e.g. in
tourism)
– Establishment of accreditation bodies (e.g. for
professional services, engineering, education)

24. Identification of needs : RPTF
5) Trade related issues (competition, investment, IPR,
public procurement, labour and environment).
• Types of activities:
– Capacity building to develop, harmonise and implement policies
– Establishment of accreditation/regulatory bodies
– Development of institutional, policy and legislative infrastructure
– Devt & implementation of regional Foreign Investment Strategy
– Establishment and strengthening of competition authorities
– Impact assessment studies (e.g. public procurement, IPR)
– Capacity building for SMMEs (e.g. to participate in procurement)

25. Regional Integration
• Trade in services and investment in particular, as
instruments of a global strategy for regional
integration and development.
• Commission is preparing a Policy Communication
on Regional Integration for Development in
ACP countries.
• Vision of regional integration (economic dimension):
• Establishment of larger markets and secure/sound
regulatory and institutional frameworks as a means to
enhance trade, investment and economic development
• Regional integration as a springboard towards gradual
integration into world economy

26. Regional Integration
• Goal is to support the regions’ own
integration Agendas
• Proposed approach could build on: (i)
regional integrated markets and supportive
business environment (regional dimension of
PSD/diversification); (ii) connected regional
infrastructure networks; (iii) regional policies
for sustainable development; (iv) effective
regional governance

27. Regional integration
Already reflected in IEPA Art. 1 : Objectives
a) Contributing to the economic growth and development […];
b) Promoting regional integration, economic cooperation and
good governance thus establishing and implementing an
effective, predictable and transparent regional regulatory
framework for trade and investment between the Parties and
among the ACP EPA States;
c) Promoting the gradual integration of the ACP EPA States into
the world economy, in conformity with their political choices
and development priorities;
d) […]

28. Issues/Challenges
• Overlapping configurations and memberships: RIPs
overlap (SADC/COMESA/EAC)
• Objective for development cooperation and the EPA
supportive of the region’s own integration agenda
• Prioritising Regional Integration by EAC/COMESA
member states.
• EAC/COMESA Countries taking ownership of trade
issues in their development strategies
• Harmonisation of all actions by development
partners
• Managing for results-on all development programme

29. Thank you