Kampala — The EPA negotiation process has been beset with problems from the very beginning. We are still at awareness stage and we need a lot of preparations.

UNCERTAINTY surrounds Uganda's readiness to conclude the Economic Partnership Agreements, a new arrangement that will allow Ugandan exports to enter the European Union before the December 31 deadline.

Speaking at a press briefing at EU headquarters in Kampala via a video link from Brussels on February 8, EU's Director for Development and Economic Partnership Agreements Peter Thomson said Uganda, along with the 16 countries in East and South African region are behind schedule in the negotiations.

"There is no commitment yet from Uganda though there have been some ministerial exchanges," he said.

The EU office in Kampala says the Commission has made a provision for funds for the consultations on the EPAs, but a Ugandan official involved in the negotiations said lack of funds is one of the major stumbling blocks.

Funding

The European Commission has provided resources for consultations, information sharing and capacity building for both government and private sectors through the Uganda Programme for Trade Opportunities and Policy and other regional and all ACP programmes," a February 8 EU press release said.

The EPAs arose from the EU's intention to base future relations with its former African, Caribbean and Pacific (ACP) colonies on two-way free trade treaties. The process for this partnership was set out in the Cotonou Agreement of 2000 in which the 78 ACP countries and the EU committed themselves to conclude the EPA negotiations by December 31, 2007.

The countries were put into groups identified as West Africa, Central Africa, East and South Africa to which Uganda and her regional counterparts belong, the Caribbean and the Pacific; plus a few larger individual countries such as South Africa.

However, Uganda is now at risk of losing out since the deadline cannot be extended because it coincides with the expiry of a waiver granted by the World Trade Organisation (WTO) that allowed the EU to continue providing preferential market access to ACP countries without ACP countries doing the same.

"An extension of this waiver depends on obtaining consensus from members of the WTO. Such a decision is therefore not in the hands of the EU or the ACP countries themselves," the EU press release added.

Mr Thomson said while the Caribbean grouping "was progressing well ahead of the deadline," Uganda's region is the "farthest behind schedule."

More time

At a one-day discussion on EPAs organised by the Uganda Programme for Trade Opportunities and Policy (UPTOP) at Hotel Africana on January 23, stakeholders expressed deep concern saying they needed more time, at least three more years before Uganda goes in for EPAs. Executive Director of African Centre for Trade and Development Elly Twineyo said Uganda should first solve her supply side constraints.

"Time is running out. Before even the Ugandan producers, manufacturers and exporters have been told about EPAs, we are signing them in December. There is a lot not yet done regarding understanding and readiness for EPAs," he said.

Apparently, the EPA negotiation process has been beset with problems from the very beginning as far as the ESA region is concerned. When the road map for the ESA was launched in Mauritius in February 2004, the formal substantive negotiations were supposed to run from July 2004 to March 2005. But they started five months late.

Officials from the Private Sector Foundation Uganda (PSFU) and the Ministry of Tourism, Trade and Industry said they needed "more time."

"We are definitely not ready," PSFU Executive Director Gabriel Hatega said. "We are still at awareness stage and we need a lot of preparations before we can get into EPAs".

Trade analysts say the stipulated time was too short given the intricate issues involved, the complexity of the ESA as a region and the need for caution given the serious ramifications the EPAs would have on the region in general and national economies in particular.

But Mr Thomson, the EU official, argued that one way or another there had to be a time frame.

"Our experience (with developing countries) shows that there has to be a timeframe or else the process would go on forever," he said.

Not aware

The Chairman of Uganda's Parliamentary Sessional Committee on Tourism, Trade and Industry, Mr Godfrey Ahabwe Pereza, told Business Power that he was aware that there would be a next round of consultations soon but said his committee was not aware that there was a December 31 deadline for the EPA negotiations to be concluded.

"But if that is the case, then there is obviously cause for alarm," he said.

Apparently, secrecy and confidentiality remains a major barrier, which makes informed and effective participation difficult.

Asked why ESA is lagging behind the rest, Mr Thomson said it was because of the diversity and "lack of coherence" in the region as a whole. For example, the ESA comprises 16 states, which are all negotiating as a bloc. All are also part of the Common Market for Eastern and Southern Africa (Comesa) - the largest economic grouping in Africa. Six states, including the Uganda, Tanzania and Kenya, belong to both Comesa (as a customs union) and the Southern African Development Community (SADC).

However, three other Comesa members are also negotiating as part of the SADC.

Three other states (Uganda, Kenya and Tanzania) are also members of the East African Community, which also has a customs union.

To make matters even more complicated for the ESA region, WTO rules also stipulate that no country should belong to more than one customs union by December 31. This, Mr Pereza said, "has put us in a state of dilemma."

Analysts fear that if developing countries like Uganda sign the agreements "before getting organised," rich countries in the EU would flood their local markets with their cheaper products, hence endangering revenue performance and local industry.

Ratification

Indeed, poor ACP countries that finally decide to ratify the EPAs would have to accept a degree of reciprocity according to WTO rules to remove their tariffs on all EU goods from January 1 next year.

Mr Thomson said there was "no way of stepping back and no step backward" for ACP countries. "But it is not for us to dictate," he said. "All we need is a high degree of coherence."

The EU insists that EPAs are aimed at establishing a timetable for progressive removal of barriers to trade between ESA as a bloc and the EU, but primarily to improve the ESA's access to EU markets.

According to the EU, the EPAs would have "in built flexibilities" in terms of transitional periods and final product coverage, which means that when the EPA is signed, Uganda can designate EU products for which liberalisation will be gradual.

"Uganda will therefore not be forced to allow all EU products into the country free of duty on January 1, 2008," it says.

The EU argues that if successfully implemented, EPAs are expected to enhance the production, supply and the trading capacity of ACP countries and their capacity to attract foreign investment ultimately easing their gradual integration into the global economy.

Asked to what extent the private sector and non-state actors were involved the EPA negotiations, Mr Thomson said the fact that the EPAs have not been of keen interest to private sector actors is a "sad and worrying" scenario.