Major concerns of East African countries must be addressed before the regional bloc signs the Economic Partnership Agreement (EPA) with the European Union (EU), Industry, Trade and Marketing Minister, Dr Mary Nagu, said yesterday.
“We (EAC) did not sign the Framework Economic Partnership Agreement (FEPA) last month because our partners (EU) refused to incorporate our important development and trade issues in the document,” said Nagu in an exclusive interview with The Guardian.
Before signing comprehensive EPA, the partners—EAC and EU were supposed to sign an initial agreement, FEPA.
This document was expected to be signed in June, this year an exercise which did not materialise after the partners disagreed on certain issues.
“We did not sign the document because we realised that the agreement (FEPA) would not benefit us (EAC),” Nagu maintained.
She said EAC had wanted development component to be included in the FEPA but EU did not oblige.
According to the minister, development component require the EU to assist EAC countries in the development of trade and related infrastructures including road construction.
The EAC also wanted the EU to financially support the regional bloc in the setting up and revamping of business and trade institutions so as to benefit from trade agreement with EU.
“It is not possible for us to develop and benefit from EPA agreement if we are not assisted in these development components,” the minister said, adding: “But EU pushed us to sign FEPA in June, this year without incorporating these issues clearly in the document…that was impossible.”
According to Nagu, EU had also wanted EAC to remove taxes on raw material exports, which she said was impossible because the move would stall development of the countries.
“We asked them to leave the decision on whether to remove the tax on raw agricultural produce and other related exports to us (EAC). They (EU) should not interfere in our decisions,” she said.
Countries in EAC, she said, had introduced taxes on raw material exports for various reasons, one of which was to prevent massive exportation of raw materials which were needed for the development of domestic industries.
“If you tell us to remove taxes on such exports, you are automatically stalling development of our domestic industries and development of our countries,” she said.
She further said signing of FEPA by the partners had failed because the EU had wanted to interfere with trade agreements between EAC countries and other countries in the world.
“They want to enjoy all trade advantages which our countries enjoy with other countries under certain agreements. But this is interfering with our trading freedom…that’s why we refused to sign FEPA in June, this year,” said Nagu.
She said after failing to reach agreement and sign the document, the two parties (EAC and EU) had agreed to shelve negotiations and signing of FEPA, and move directly to the negotiations of comprehensive EPA.
“We also agreed that all these unsolved issues will be discussed in the EPA negotiations,” she said, insisting that EPA would be signed as scheduled in November, this year.
The EAC partner States - Kenya, Uganda, Tanzania, Burundi and Rwanda - and the EU initialled a Framework Economic Partnership Agreement (FEPA) on November 27, 2007 undertaking to continue their negotiations with a view to concluding a comprehensive EPA.
During a one-day discussions on FEPA last month, both parties indicated they appreciated the progress made, especially with regard to technical barriers to trade as well as customs and trade facilitation.
''While some progress has been made, there remained areas where further discussions is required in order to reach consensus,'' said a communiqué signed by Minister Nagu, on behalf of the EAC and Karel De Gucht, who led the EC delegation representing the EU Commissioner of Trade.
Both parties had identified two broad categories of issues where further discussions were needed -- a number of articles where there was consensus on the wording but divergence on whether they could be incorporated into the FEPA or the Comprehensive EPA.
The other category of divergence, the communiqué said, was on articles where consensus had not been reached on the reformulations.
The initialled FEPA comprise market access on trade in goods, development cooperation issues and fisheries. Under this deal, the EAC offered to liberalize 82.6 per cent of its trade with the EU, and retained an exclusion list accounting to 17.4 per cent of the trade with EU.
On its part, the EU offered quota-free-duty-free market access with exception of ammunition and transitional arrangement for sugar and rice.
But EAC and the EC have agreed to accelerate the negotiations for a Comprehensive EPA with a view to striking the final deal by the end of November and before the African Union-EU Summit in November in Libya.
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