5 April 2010

East Africa: EAC-EU Trade Talks Hit a Snag

Nairobi — Reports that the East African Community is close to signing an Economic Partnership Agreement (EPA) with the European Union may be a mirage.

Sources close to the high level negotiations that took place in Brussels recently indicate that although most of the contentious clauses have been agreed upon, hopes that the trade ministers would meet the EU Trade Commissioner this month for the final leg have been dashed after the meeting was pushed to May.

"The European Commission has new office bearers who have requested for more time to familiarise themselves with the technical issues surrounding the EPA negotiations, meaning we have to wait longer," a member of the team who requested anonymity said, adding "we are back to the drawing board."

He explained that it was unlikely that the negotiations could be concluded this year, considering that most regional governments are also going into elections.

"We could find ourselves with new trade ministers, who too will ask for time to get acquainted with the EPAs and the cycle will continue," he said.

Fresh Produce Exporters Association of Kenya chief executive Stephen Mbithi, a member of the negotiating team said the parties had agreed on a EAC-EPA-Development Matrix, and were discussing whether it should be annexed or made part of the agreement.

The EU opposes its being legally binding arguing that it has other channels through which it funds development in the region.

The European Commission (EC) has, however, asked East African states to prepare a list of priority projects and programmes that require funding for possible approval.

Mr Mbithi added that the Most Favoured Nations clause too needs to be defined so that the region is not forced to source for products and services from the EU, when it can get the same from other regions, notably China, at cheaper costs.

"We have no problem with the MFN clause as long as it allows us to buy from Europe only at competitive prices", he said.

Former Tanzania President Benjamin Mkapa had no kind words for EPAs when he addressed the Pan African Media Conference organised by the Nation Media Group as part of its 50th anniversary celebrations a fortnight ago.

He says the partnership was a stumbling block to the growth of the continent's regional trading blocs which he said should be strengthened.

"These are the institutions that will rid the continent of its dependence on donor aid. But our joining EPAs is as good as embracing efforts against African quest for unity," he said.

Interim pact

He reasons that the European Union has taken too long to get to its current status and that Africa cannot pretend that it can trade at par with the Union.

Kenya's EAC permanent secretary David Nalo, said that in the unlikely event that a comprehensive agreement is not signed in June, "it would most likely come before December".

Mr Nalo added the parties from both sides of the divide had agreed to continue trading under the interim Framework for Economic Partnership Agreement (FEPA) that expired in July last year.

Efforts to get a comment from the Ministry of Trade were unfruitful, with an official saying they did not wish to talk to the media, yet the country negotiations are conducted under it.

Mr Nalo refuted recent media reports that Kenya had indicated it would go it alone saying that the regional market was bigger for Kenya.

"Kenya is the largest exporter to both the EAC and the Common Market for Central and Southern Africa states therefore, it is safer for us to negotiate as a bloc," Mr Nalo said.

He added that the country's largest exports to the EU, notably horticultural produce had come under increasing threat from emerging suppliers such as Ethiopia, Uganda, Tanzania and northern Africa, creating the need to grow regional outlets that offer a larger market for a variety of products.

With the coming into force of the regional Customs Union and the Common Market, it is difficult for any country to be on its own, Mr Nalo added, emphasising that it is easier to bulldoze one country but a different ball game to deal with a block of many nations.

The negotiations have now moved from the negotiators table and will be handled by trade ministers from both regions - EAC and EU for finalisation.

The negotiators found some middle ground on development support.

Copyright © 2010 The East African. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.