11 February 2013

East Africa: EA Warned On Partnerships

Kampala — The Chairperson of the EAC Council of Ministers Shem Bageine has warned that while the region was looking for a market for its raw materials, imports coming in from Europe were largely finished products rendering the EAC net importers.

"We must be very cautious and focused when negotiating for the Economic Partnership Agreements (EPA's), we should be looking at areas where we have comparative advantage so that we compete favourably on the world market - calling for investments in natural resources," the minister remarked.

This was during a debate on the agreements by the East African Legislative Assembly (EALA) during the recent sessions held in Bujumbura, Burundi.

The regional assembly also maintained that the EAC-Economic Partnership Agreements (EPA) process should fully take into account the regional integration agenda and ensure the agreements realised foster economic growth and development.

"In respect of the negotiations, the Assembly maintains that the negotiators should and must have policy space and the flexibility on issues of export taxes and on the Most Favoured Nations (MFN) Clause amongst others, in order to allow for value addition and enhance industrial development," said the assembly's publicist Bobi Odiko.

He said in a statement sent to East African Business Week that the recommendations are outlined in a report of the Committee of Communications, Trade and Investment (CTI) on the consultative workshop between EALA, Civil Society and the Private Sector on EPAs adopted by the Assembly..

The Workshop held on December 9-11th, 2012, in Nairobi, Kenya, was called to sensitize and to build the capacity of the committee members on various issues pertaining to EPAs. He explained that the objectives were to update and inform members on the opportunities and challenges associated with EPAs and to come up with recommendations.

The report outlines the fact that various areas in the agreement have been virtually completed and such include trade in goods, fisheries, customs and trade facilitation as well as Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT).

According to the report, the negotiations between EAC-EU on the EPA Rules of Origin are about 90% complete while in agriculture, the outstanding work relates to domestic support and export subsidy.

It wants a number of areas under the Rules of Origin, institutional agreements, dispute settlements and final provisions and market access issues critically looked into.

He added that the concerns raised in the negotiations included revenue loss to governments although there is still a window of potential for the EAC to offset revenue loss, especially if the bloc exploits new market opportunities that have been realized under the EPAs.

"EAC's concern with export related taxes is based on the apprehension that restrictions on policy space shall impact on the export taxes as a trade policy instrument," he said.

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