FORMER president Benjamin Mkapa on Wednesday likened the European Union's Economic Partnership Agreements (EPAs) as a poisoned chalice and the second scramble for Africa that ought to be rejected.
In his remarks to mark the Private Sector Day held in Dar es Salaam, Mr Mkapa said with EPAs Africa is in trouble, its future is once again on the table and it is Europe that holds the ace. EPAs are a scheme to create a free trade area (FTA) between the European Union and the African, Caribbean and Pacific Group of States (ACP).
They are a response to continuing criticism that the non-reciprocal and discriminating preferential trade agreements offered by the EU are incompatible with WTO rules. The EPAs are a key element of the Cotonou Agreement, the latest agreement in the history of ACP-EU Development Cooperation and were supposed to take effect as of 2008, but as of March 2012 the negotiations are not yet completed.
Mr Mkapa said yesterday that by dropping the EPAs the Least Developing Countries (LCDs), Tanzania included have nothing to lose because they would continue trading with Europe under the Everything But Arms (EBA) scheme containing duty and quota free access.
Initiated in 2007, the EPAs between EU and East African Community (EAC) was still overwhelmed by contentious issues which are thorn to would be members, but beneficial to initiators of the instrument. The dangers that EPAs poses to Tanzania and the EAC, according to the former president, included high levels of liberalisation that will see duties charged on EU products eliminated for two thirds the value of imports from Europe and impact on domestic production and revenues as well as regional trade.
"Accordingly, the interim EPA's market opening commitments which EAC initiated in 2007, if signed and implemented, would see the region collectively liberalising 82.6 per cent of the value of imports from the EU," remarked Mr Mkapa before hundred of members of the Tanzania Private Sector Foundation (TPSF).
For Tanzania alone, he said, the figure is higher at about 90 per cent of the value of imports from EU to be committed to duty free. Of the 90 per cent facing tariff elimination, 23 per cent of the value of imports from the EU already enters the country duty free.
Consequently, more than half of the domestic production of export destined goods from agriculture, chemical, intermediate industrial products, parts of machines, vehicle parts will be put at risk by the EPAs. "The EPA will bind at zero duties 3,102 tariff lines on six digit level in the "World Custom's Organisations Harmonised Commodity Description and Coding system," of the total of 5,052 where Tanzania currently does not have production, thus making it difficult for the country to sail in the same lines in the future," he noted.
Regionally, Mr Mkapa said EPA will jeopardise the flow of trade because locally produced goods are to be liberalised. It makes EAC countries less attractive for prospective free trade agreement (FTA) partners because they will have to compete with Europe in the regional market.