Economic Partnership Agreements
Economic Partnership Agreements
This section contains two reports:
(1) In support of Mozambique’s role as coordinator of the Non-Agricultural Market Access (NAMA) negotiations under the SADC/EU Economic Partnership Agreement (EPA), USAID Maputo and Nathan Associates, in cooperation with UTCOM and the Ministry of Industry and Trade, carried out a two day workshop focusing on the policy and technical elements of NAMA negotiations and NAMA’s relationship with broader EPA issues. The Workshop participants represented a good cross-section of relevant ministries. Two officials from Swaziland also participated. The Workshop was conducted by Paul Moore and Mike Hathaway, both of whom have substantial negotiating experience. An abbreviated, three hour session was held with senior level GOM and private sector officials. The workshop reviewed the objectives of the EPA from the perspectives of the EU, SADC and Mozambique, explained the terms and principles involved in market access negotiations, examined the context and legal basis for the EPA (as a free trade agreement as opposed to a unilateral trade preference scheme), explored negotiating objectives and tactics for achieving them and examined the interagency and private sector participation process--which will be necessary for identifying export/import priorities and supporting negotiating positions. Finally, through a mock exercise, workshop participants assumed the roles of government agencies and two businesses with conflicting trade objectives. The report provides summary of the consultants main findings, key terminology related to trade negotiations and workshop presentations.
(2) A paper that aims to shed light on the impact of unilateral preferences on exports focusing on the case of Mozambique. We look specifically at whether unilateral preferences are valuable by i) are used to generate exports and ii) the degree of appropriation of the price margin theoretically induced by the preference margin. We concentrate on EU preferential schemes since this is the main destination market for Mozambique. Our database covers the period 2000-2005 and uses unit values at HS8-digits as proxies for cif prices. Our findings indicate that export growth seems weakly linked to preference considering that most products enter at MFN zero and the main exported products show lower than average use of preferences. Although utilization rates are generally high this does not translate into significant price margins captured by Mozambican exporters compared to MFN competitors. On the contrary, we cannot identify a higher price obtained by preferential exporters. Non-utilization is probably due to sporadic events linked to inefficiencies in the export process by public authorities. We also test econometrically the relationship between price margins and tariff differentials for the sample of products exported by Mozambique using a large sample of countries. After controlling for factors such as market power and quality differences, we find that MFN prices are often higher than preferential prices, and there is weak evidence of any transmission of tariff preferences to price margins for exporters. This suggests that the importance of preserving trade preferences in current negotiating fora (such as EPA) should not be considered the first priority for Mozambique.