iEPA

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The iEPA is an agreement for liberalizing trade (market access) in goods only, between the European Union and the Pacific States. Only two countries in the Pacific region have signed the agreement, i.e. Papua New Guinea and Fiji. Moreover, Papua New Guinea is the only Pacific country to ratify the Agreement in 2011, after EU notified completion of its ratification process, while Fiji has not ratified the iEPA, but is reported to be provisionally applying it since October 2015. The Agreement also makes provision for accession by the remaining twelve (12) Pacific states as soon as they prepare adequate market access offers that are WTO compatible.

The Interim EPA covers all major provisions of a trade in goods agreement:
 Duty-free quota-free access into the EU for all imports from PNG and Fiji;
 An asymmetric and gradual opening of their markets to EU goods, taking full account of the differences in levels of development between them and the EU;
 A chapter on trade defence with safeguards allowing each party to reintroduce duties or quotas if imports of the other party disturb or threaten to disturb their economy;
 A chapter on Technical Barriers to Trade as well as Sanitary and Phyto- sanitary (SPS) measures, to help Pacific exporters meet EU import standards; and
 A chapter aiming to facilitate trade through measures such as more efficient customs procedures and better co-operation between administrations (and between administrations and business).

The interim EPA emphasises the need for cooperating closely at the national level to maximise the synergy between development co-operation and the agreement’s objectives.

Provisions of the iEPA for Fish
The iEPA contains very important changes to the Rules of Origin (ROO) governing qualifying fish processed and exported as finished products, mostly canned (Chapter 16 of the Harmonized System). This change is being referred to as “Global Sourcing” (Protocol II, Article 6 of the iEPA), which in general terms mean “fish caught anywhere in the world, processed on-shore in PNG or any other members of the Pacific ACP states qualify under Chapter 16 of the Harmonized System to be exportable to the EU market quota and duty free.”

Global sourcing implies that regardless of where the fish is caught, or the status of the vessel’s flag, registration or ownership, the fish is deemed originating if it is being sufficiently worked through, i.e. processed from its natural state (fresh or frozen) into a pre-cooked, packaged or canned product. This is known as a change in tariff heading method, that is, a transformation from its natural state from Harmonized System (HS) Chapter 3 to HS headings 1604 and 1605 of the HS Tariff Classification.

Fish and fishery products that are globally sourced, meet the European Commission’s Sanitary and Phytosanitary (SPS) requirements and are not sourced through Illegal, Unreported and Unregulated (IUU) fishing, automatically qualify for “duty-free and quota-free” entry into the EU market. Under the iEPA, PNG (and other PACPS that join the Agreement in the future) are exempted from duties.