East African Business Week (Kampala)
Shadrack Kavilu
24 September 2007
Nairobi — The uncertainty surrounding talks on the Economic Partnership Agreements offered by the European Union has forced the Eastern and Southern African (ESA) bloc of countries to consider other options in case of failure.
Negotiators say they are worried that the December 30 deadline may slip through their fingers and with it the deal, but are now seeking other offers from the European Commission that may be equivalent to preferential treatments under the Cotonou agreements.
One the technocrats representing Kenya on negotiation table said last week they are exploring ways through which trade will not be disrupted should they fail to sign the EPAs by December 30, 2007.
The EAC trade delegates argue that the EU should provide ESA countries with an alternatively viable tariff regime in January 2008, to enable negotiations for a reasonable EPAs.
"We are optimistic that measures would be put in place to ensure trade is not disrupted come the expiry of the preference," says Mr. Richard Sindiga, chief economist at the Ministry of Trade and Industry.
The uncertainty brought about by the new configuration that seeks to re-negotiate fresh EPAs under East African Community (EAC), which brings Tanzania on board compounds the entire process, which could take much more time than scheduled.
Some of the options under the European Commission (EC) include the General System of Preference plus (GSP+) and the standard GSP, the latter attracts a higher tariff compared to the preferential treatment that comes into expiry end of this year.
Both GSP and GSP+, trade experts say, come with stiff requirements that have to be met by African, Caribbean and Pacific (ACP) countries in order to be eligible for these preferences.
Currently no ACP country is eligible for the GSP+ option, which has lower tariffs, compared to GSP.
Failure by the negotiation team to sign an EPAs by the set deadline would mean an alternative tariff regime should be in place to ensure trade flows smoothly.
Kenya's trade and industry minister, Mr. Mukisa Kituyi recently wrote to the EC asking for a viable option that would guarantee trade is not disrupted.
Though the EC has maintained that it would provide ACP countries with a standard GSP scheme which attracts a higher tariff than the Cotonou ACP preference, trade experts are advocating for a GSP+ regime that would provide lower tariffs.
They argue that ACP countries should be exempted from some of the requirements mandatory for the GSP+ as was the case with Latin American countries who were given a transitional period to ratify and implement the requirements.
For instance there are two sets of criteria for GSP+ eligibility, one on vulnerability and another on human-labour rights and environmental principles which requires a country to have initially ratified and implemented at least 23 out of 27 relevant conventions by end of 2008.
On the first requirement of vulnerability, trade experts say, all ACP countries appear to be eligible but on the second one it is rather difficult to fulfill the requirement given that the ratification and implementation should be met by 2008.
Technocrats argue that for ACP countries to be provided with an effective fallback, the GSP+ must be accorded temporarily to all non-LDC ACP states from January to a avert disruption of trade, this they say would give all parties enough time to either finalise EPA or to ratify and implement the remaining conventions needed to establish permanent eligibility.
Failure to meet the deadline, the ACP countries from January next year would have to rely on the Everything But Arms (EBA) scheme which provides duty- free, quota-free access.
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