Differences and Similarities Between Provisions of Different Agreements:

An Egyptian Perspective

EU partnership GAFTA Aghadir

*COMESA

Major Aspects of Regional Agreements with Egypt

A. Political and Security AspectsB. Economic Aspects

– Free Movement of Goods • Product Coverage of Merchandise Trade• Anti Dumping, Subsidies and Countervailing

Measures• Safeguard Measures• Concept of originating products and Rules of Origin• Duty Drawback• Dispute Settlement

– Supply of Services and Right of Establishment (Is it GATS only or GATS plus)

B. Economic Aspects– Capital Movement and other Economic

Matters• Capital Movement• Balance of Payment Difficulties• Competition and Competition Law• Intellectual Property Rights IPR• Government Procurement

– Economic Cooperation• Standardization and Conformity Assessment• Customs

C. Social Human and Cultural Aspects• Approximation of Laws

Major Aspects of Regional Agreements with Egypt

Aspect Areas of Similarity or Differences

A. Political and Security Aspects

Political Dialogue

Though political dialogue concept is not fully understood, it seems that there is convergence among EU-Partnership, Aghadir (which follows the exact rules) and COMESA. In GAFTA it remains absent (Comment: no conflict)

B. Economic Aspects (Free movement of Goods)

Product Coverage of Merchandise

Trade

COMESA has the most wide coverage, then GAFTA which have negative lists that should have been abolished or is expected to be in the case of agricultural products, followed by Aghadir. EU-Partnership, agricultural, processed agricultural and fisheries follow certain procedures that in some cases are clearly determined and in others left for future negotiations. (Comment: areas of conflict can arise concerning processed agricultural goods in Aghadir but follow other norms in EU-Partnership)

Aspect Areas of Similarity or Differences

Anti Dumping, Subsidies and Countervailing

Measures

Rules for covering antidumping rules, subsidies and countervailing measures differ substantially among the agreements where the EU-Partnership and Aghadir are the most transparent. In case of COMESA and GAFTA, the rules refer to international standards (without defining what international standards are). In addition in case of GAFTA there is discretionary power given to the Economic Council. (Comment, problems can arise when a country is both a member of COMESA and GAFTA as Sudan, in addition to the non transparency governing GAFTA and COMESA)

Safeguard Measures

EU-Partnership and Aghadir follow same WTO norms, however GAFTA and COMESA follow the decisions of the Economic and Social Council and the confined council respectively. Comment: (application of different safeguard mechanisms is not likely to create serious problems when agreements are implemented. However, in GAFTA and COMESA there is a large gap of non transparency in terms of how measures will be applied.)

Aspect Areas of Similarity or Differences

Concept of originating

products and Rules of Origin

(ROO)

There is huge differences in terms of applying ROO and their cumulation. In EU, the main criterion is value added (60%) in addition to other criteria. Large similarity between applied ROO in the EU Partnership Agreement and that of the Aghadir (following the EuroMed ROO, though not identical). ROO in GAFTA is based mainly on the 35% value added so as well the COMESA (in which Egypt is trying to raise it to 40%. There are huge differences in details related to cumulation of rules of origin where the four agreements allow for it, but with different meanings. e.g. EU-Partnership allows for bilateral and diagonal cumulation whereas COMESA allows only for diagonal (which is a step more advanced than bilateral). The case of the GAFTA is not clear in terms of cumulation and its conditions, with the general exception of lowering the value added requirements to 20% in case of joint Arab products .

Aspect Areas of Similarity or Differences

Duty Drawback Large differences as duty drawback is granted during transitional period of GAFTA, only for 6 years in EU Partnership Agreement and eligible for certain products within limits in Aghadir till 2009 and not clear in case of COMESA. This can result in problems in application even in the most two harmonized agreements (EU Partnership and Aghadir) where for example the end of the 6 years for Egypt since entry into force of the agreement is 2009, which is though in line with what Aghadir sets as a date, the scope of application in Aghadir is quite limited. This can result in problems not only confined to the duty drawback but also other aspects of ROO cumulation.

Dispute Settlement

The different systems of dispute settlement do not cause a problem in the functioning of the different agreements, but it adds to the burden of handling different legal issues whether in the government or private sector involved.

Aspect Areas of Similarity or Differences

B. Economic Aspects (Supply of Services and Right of Establishment)

Supply of Services and

Right of Establishment

(Is it GATS only or GATS plus)

Several problems associated with the liberalization of trade in services where for example in GAFTA it is now being negotiated GATS plus whereas in Aghadir it is only GATS, although the members of Aghadir are the same members of GAFTA. The case of the EU Partnership faces no problems. COMESA’s case is not clear by all means as it does not follow any guidelines regarding what is meant by services. Moreover, problems will rise in case of countries which are members of both COMESA and GAFTA. The right of establishment concept is not clearly explained in all of the agreements.

Rules of Origin in Services

A common problem concerning trade in services is the concept of Rules of Origin with respect to services which constitutes one major problem in all agreements even within the WTO .

Aspect Areas of Similarity or Differences

B. Economic Aspects (Capital Movement and Other Economic Matters)

Capital Movement

Problems arise in the case of EU Partnership and Aghadir where although the two agreements are related, only EU mentioned it. No legal problems are encountered in this case, but lack of harmonization can result in lack of transparency and other problems. The fact that the issue is not covered in GAFTA but dealt with in another agreements is likely to create non transparency. COMESA is not clear regarding dates or actual implementation of what is meant by financial market integration.

Balance of Payment

Difficulties

There are no overlapping type of problems, however the fact that some of the agreements (e.g. EU Partnership and Aghadir) follow WTO rules while other agreements (GAFTA and COMESA) follow international rules, without clarifying what is meant by international rules can result in several problems in application.

Aspect Areas of Similarity or Differences

B. Economic Aspects (Capital Movement and Other Economic Matters)

Competition and Competition

Law

This is one of the main areas where incompatibility among the different agreements is present and can create certain difficulties in implementation of the different agreements as each is expected to follow different norms.

Intellectual Property Rights

IPR

There is great contradictions in the provisions governing intellectual property rights in different agreements where one abide by WTO (Aghadir), the other follows the prevailing international standards without identifying what are prevailing standards (EU Partnership) and one follows unclear standards (COMESA) whereas the last still does not consider any norms.

Government Procurement

There are no common themes regarding government procurement among the different agreements, however this is not likely to create problems.

Aspect Areas of Similarity or Differences

B. Economic Aspects (Economic Cooperation)

Standardization and Conformity

Assessment

That is one of the main areas that can create several problems in coordination and implementation. All the agreements call for harmonization and mutual recognition. However the terms of implementation and schedule for harmonization and mutual recognition schemes are not clear.

Customs The agreements call for harmonization of customs procedures and standards, with the exception of GAFTA, which did not tackle this issue. Any effort undertaken in any of these agreements is likely to have positive spillovers on other agreements, even if not included explicitly in them.

C. Social Human and Cultural Aspects

Approximation of Laws

The term approximation or harmonization (vague enough) can lead to several problems in implementation.

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