East African Community member states have secured a vital 25-year reprieve from full liberalisation of their domestic markets sweeping aside fears that any new trade pact with the European Union would kill local industries and destroy livelihoods.

Analysts said the provision was necessary to safeguard local markets from flooding by heavily subsidised European imports.

It was part of the market access agreement the EAC reached with the European Commission at a special Ministerial meeting in Brussels on Wednesday.

A member of the Kenyan delegation to the meeting told the Business Daily that the EU had initially wanted the protection to be limited to 15 years, but had been prevailed upon to extend the period by another 10 years to give their partners time to stabilise their volatile markets.

The EU also accepted the list of sensitive goods that EAC member states presented in Brussels though the parties agreed to further scrutinise it before a final decision is made.

All other products from the EAC will however enter Europe duty and quota free.

The EU also promised to review Rules Of Origin (ROO) to minimise any forms of barriers in trade ties between it and the region.

And in a further boost to regional economies, a joint statement between the EAC/EC seen by Business Daily said the parties had agreed on an interim trade deal that would run for another year before a comprehensive Economic Partnership Agreements (EPA) is signed to replace the current one that is set to expire on December 31.

The deal is meant to prevent disruption of trade between the two blocs come January 1, 2008 because signing an EPA within the December 31 deadline looks highly unlikely.

Failure to agree on an interim pact would have forced the parties to revert to the less generous General System of Preference (GSP). Under the GSP system Kenyan exports currently enjoying duty free access into the EU market would have attracted duty of between 8.5 and 15 per cent.

"It is noted that within the remaining very short time until December 31,2007 it was not realistic to conclude a comprehensive EPA. The parties, therefore, agreed to work towards a Framework Agreement of an EPA that will comprise trade in goods, development cooperation, fisheries and any other sectors on which negotiations would have been concluded," the joint communiqué says.

Trade and Industry Permanent Secretary David Nalo said the deal on non-disruption of trade was a milestone and would ensure the Government signed a conclusive EPA by end of next year.

"We reached a major milestone and we shall not be having disruptions in trade both at ESA and EAC level," he said on Wednesday after the EAC/ESA talks in Brussels.

At the talks in Brussels it was agreed that EAC member States will by December 31,2008 have signed new EPA with the EU as a joint Customs Union(CU).

Kenya is among three of the EAC member states that have been negotiating new trade deals with the EU under the Common Market for Eastern and Southern Africa (Comesa) backed Eastern and Southern Africa (ESA) platform. Tanzania however was involved in negotiations under the Southern Africa Development Cooperation (SADC) bloc.

This disparity is however set to be ironed out and all member States made to jointly sign EPA with the EU as one Customs Union in tandem with requirements of the World Trade Organisation (WTO). This is because the regional body has an existing Customs Union (CU) with a Common Tariff Nomenclature , Common External Tariff as well a harmonised list of sensitive products.

The EAC also has in its hands a comprehensive negotiation text that has borrows from both the SADC and ESA configuration even though experts say the final product to be discussed with the EU would heavily be inclined towards the latter configuration.

Comesa secretary-general Erastus Mwencha yesterday said the new pact to ensure non disruption of trade between developing nations in the region and the EU beginning January next year was a milestone.

"The new deal is great because at least were made sure that trade will not be disrupted especially for countries such as Kenya that had been worried about the future of key economic sectors such horticulture. We are even grateful that the talks are providing for key areas such as development to be discussed independently," he told Business Daily on phone from the Comesa secretariat in Lusaka,Zambia.

In a new shift, the new EPA texts seek to go beyond the common European Development Fund(EDF) to new areas such as Aid for Trade through enhanced allocations on Official Development Assistance (ODA).

The deal on continued market access and market protection is expected to bring a lull in the local scene where exporters and lobby groups have been questioning the commitment by Government to protect their stakes in dealings with the EU. By having the deadline for signing EPA moved over another year, local negotiators now have ample time to deliberate of comprehensive trade pacts.

Industry lobbies-Kenya Association of Manufacturers), and the Fresh Produce Exporters Association of Kenya(FPEAK) yesterday said the secured deals were a step in the right direction in having place future positive pacts with the EU.