EPAs: Push for new deadline could derail trade pacts

Tralac, April 29, 2009

A new push for the extension of the negotiating period for a comprehensive Economic Partnership Agreement (EPA) between the European Commission (EC) and the East African Community (EAC) is underway.

The developments come just over two months before the July 2009 deadline for the signing of the trade agreements.

The EPAs provide a framework for African, Caribbean and Pacific (ACP) countries to negotiate with countries in the European Union (EU) for simplified trade rules that cover all products. However, a deep seated fear that the EPAs could distort the region’s development priorities has been present throughout the negotiations.

Similar campaigns driven largely by civil society organisations had previously forced the EU and ACP countries to slow down on the search for a comprehensive trade pact and settle for an interim agreement to fill the void left after the Cotonou trade accords expired two years ago.

“The fact that the region is yet to agree on the trade-related issues like policies on competition, intellectual property rights and government procurement renders the July 2009 deadline largely untenable”, argues Monica Hangi of the Tanzania-based Economic and Social Research Foundation.

A number of civil organisations from the five EAC members gathered in Nairobi on Monday to appeal to the EAC partner states to go through the proposals of the treaty with a fine comb.

Outstanding issues in the negotiations include trade in services, agriculture, and economic development cooperation. Trade in services has been particularly controversial in the East African region as all EAC members except Kenya have Least Developed Country (LDC) status.

Under modalities of the World Trade Organisation (WTO) and the General Agreement on Trade in Services (GATS), LDCs are exempted from binding commitments that the EU has been pressing for.

With regards to agriculture, the EC negotiators have thus far refused to discuss the bloc’s domestic support to farmers with the EAC although they insist that the regional economies should remove all their tariff barriers for agricultural produce from Europe.

Meanwhile, negotiators from both sides have agreed on the need for development cooperation in the region, although the EAC negotiators are not comfortable with the EC’s view that development is a process of trade liberalisation and of adopting rules that prohibit discrimination against foreign investors and foreign bidders for government contracts.

“We know there is pressure to conclude the EPAs negotiations within the scheduled timeline but with these many unresolved issues, I would rather we ignore the deadline and sign what we clearly understand than sign in a hurry and later call for support against the very treaty”, said Victor Ogalo, a programmes officer with Cuts International.

Kenyan Trade Minister Amos Kimunya earlier said that the rules of origin under the interim EPAs are seriously hampering the benefits of duty-free and quota-free market access promised under the treaty with EU countries.

While regulations have been relaxed for textiles, clothing and fisheries products, he said that a lot more needs to be done if the EAC member states are to receive the full benefits of the free trade accord with Europe.

The EAC members began implementing a customs union in 2005, and are already enjoying a common external tariff (CET), giving them muscle to approach the EU with a unified market standard which is also a major demand in the EPA negotiations.

However, a joint study by a coalition of non-governmental organisations (NGOs) recently found that the EU member states would gain much more from the EPAs than their African counterparts.

Conducted by the Southern and Eastern African Trade Information and Negotiations Institute (Seatini), Traidcraft and EcoNews Africa, the study found that the trade deal would enable Europe to export Sh81 billion worth of goods to the Common Market for Eastern and Southern Africa (COMESA) alone.

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