THE East African partner states are considering diplomatic engagement with the European Union member states to clear unsolved issues on Economic Partnership Agreement.
The EAC ministers responsible for EPA negotiations with the EU have agreed to use diplomacy to resolve the outstanding issues, as the clock ticks towards the 2016 deadline.
At the moment, the ministers are undertaking national consultations on the way the diplomatic engagement with EU countries would be carried out.
Director General for Customs and Trade at the EAC Secretariat, Mr Peter Kiguta says that the EAC position under the EPA negotiations is more critical before facing the EU.
"We need to have our position as the EAC under the EPA negotiations so as to ensure that we have an EPA that best serves the interests of the EAC region," Mr Kiguta explained.
Among the EPA outstanding issues in which the EAC needs to come up with its position, is a clause on Most Favoured Nation (MFN) and export taxes.
The EA trading bloc fear that if signed, the MFN will block all the signatories to enter into bilateral talks with other partners on areas where the EU does not enjoy preferential terms.
Negotiators said the EU has been keen on the clause to shield itself against emerging economies like India and China.
Again, the EAC negotiators have maintained that they need policy flexibility on issues of export tax to allow value addition and industrial development.
The EAC concern with the export taxes article is the impact that this restriction will have on its policy space in the use of export taxes as a trade policy instrument. EU, however, insists on measures disciplining the use of export taxes in the EPA.
Some of the sectors where current production will be at risk are processed oil products, chemical products for agriculture, medicines, vaccines and antibiotics.
The EAC document seen by The Daily News highlights other unresolved clauses on agriculture; some provisions of the protocol on rules of origin and some product specific rules.
On the negotiations under agriculture, outstanding issues remain on the domestic support and export subsidies; and on geographical indications.
The agricultural products in which the EAC are competitive in producing or have the potential-- are hardly affected by the EPA as these have largely been excluded from liberalization.
The EAC will be liberalizing seven agricultural items -- six products attracting 10 per cent and one product at 25 per cent, which are currently significantly, sourced from the EU, hence the potential loss of revenue.
These include maize starch, flours and meals of soya beans; seaweeds and other algae; animal food preparations; casein; other modified starches and colza Oil. In the list of outstanding issue include some provisions on institutional arrangements, dispute settlement and final provisions.
There are also the new issues submitted by the EU such as good governance in the tax area and consequences from customs union agreements concluded with EU. The EAC has not agreed to the inclusion of these issues in the negotiations.
EPAs negotiations started at ACP level and in 2003, the negotiations were moved to regional level. Kenya, Rwanda, Burundi, and Uganda were negotiating in the East and Southern African configuration under the coordination of Comesa while Tanzania was negotiating under SADC.
In 2007, all the EAC partners agreed to negotiate as a bloc. The EU represents an important trade partner for the EAC region, with around $4.8 billion of imports from the EU -- mainly oil products, medicines, machinery and mechanical equipment, cars, aircraft and electrical appliances -- and around $3.18 billion of exports to the EU --mainly coffee, tea, fresh cut flowers -- as per 2010 trade data.
Recently the Tanzanian Ambassador to the EU, Dr Diodorus Kamala said it was decided that African regions negotiating Economic Partnership Agreements (EPAs) with the European Union (EU) should hold signing of the agreements until the Africa-EU summit slated for April, next year.
The decision was reached recently in Libreville, Gabon, during the EPA's Negotiations Coordination Meeting organized by the African Union Commission, according to Tanzania's Ambassador to the European Union, Dr Diodorus Kamala, who attended the meeting.
"The EPAs should be included in the agenda of the Africa EU Summit scheduled to be held in April 2014. It was also agreed that the African Union Commission and EPA negotiating regions will have to prepare a joint matrix of challenging issues in the EPA negotiations with possible solutions," Mr Kamala said in a statement.
According to the Tanzanian envoy, the joint matrix will have to be submitted to the principals for consideration during the Africa - EU Summit. "An assessment needs to be done on the impact of the EPAs on economic and envisaged EAC -SADC (Southern African Development Community) and COMESA (Common Market for Eastern and Southern Africa)'s tripartite Free Trade Area," he explained.
Tanzania and the other four members of the East African Community (EAC) namely Kenya, Uganda, Rwanda and Burundi are negotiating the agreement through the regional bloc.
The Libreville meeting also resolved that the EPA agenda be taken up to the AU Trade Ministerial Conference in October, this year, and the High Level Technical Committee and at the January 2014 AU Summit.
"AU should propose alternatives to the EPAs and should develop and agree on common positions on all divergences with especially in the following areas export taxes, most favoured nation clause, agricultural subsidies in EU, development finance for EPAs, rules of origin, exclusion and non execution clauses," the statement read in part.
It called on the European Union to review EPAs negotiating mandate to ensure flexibility and conclusion of Africa's regional integration agenda.
The meeting also requested the EU to consider providing a non reciprocal trade arrangement for Africa the same way has done for Moldova and the Western Balkans to support their economic development.