EU-EAC trade talks hang in balance

East African Business., November 01, 2010

Three years since it was initialed, the future of the trade negotiations between the European Union (EU) and East African Community (EAC) remains in balance as the set deadline fast approaches.

Referred to as the Economic Partnership Agreements (EPA), the EPA, is the only World Trade Organisation (WTO) compatible trade agreement that can guarantee 100% duty free and quota free market access while very importantly ensuring uniformity of EAC external trade policy.

However, the agreement today remains unsigned. This has put economic operators in an unpredictable and uncertain environment.

The Head of the Political and Trade Section of the EU Delegation in Uganda, Mr Harvey Rouse, said last week that It is important that negotiations of the final EPA are brought to a successful conclusion as expeditiously as possible.

"The legal vacuum that prevails cannot be sustained in the long run," he said.

Unfortunately EAC has not followed up on June 9 ministerial meeting in Dar es Salaam".

Harvey contends that the EU remains committed to delivering a pro-development WTO compatible EPA.

"We believe that even now, if we work hard together, we can deliver such a result by November. But this requires commitment from both sides. The EU can not want the EPA more than EAC. We must work together to find a mutually satisfactory solution", he said in a statement sent to East African Business Week.

But trade analysts are arguing that the EAC should be cautious in signing EPA until they are satisfied with its content.

The Director Consumer Unity and Trust Society (CUTS) International Geneva Resource Centre, Atul Kaushik, says fostering research discovered that while the situation varies among countries and different stakeholders, the research affirms that much still needs to be done before the actual signing.

"Unless proper agreements are adhered to, it is better to delay signing an agreement than sign and get to understand the content. EAC states still have time to sign the EPAs," Kaushik said.

The EAC-EU Framework EPA was initialled in Kampala on 27 November 2007. The two are supposed to sign a comprehensive EPA mid November. Speaking during a national dialogue organized by the Southern and Eastern African Trade Information and Negotiations (SEATINI) in Kampala, Kaushik said most parties still believe EPAs are a promotion of the neo liberal policies of deregulation, liberalization and privatization.

While responding to issues of concern during the National Trade Sector Review conference organised by the Ministry of Tourism Trade and Industry (MTTI), the Permanent Secretary MTTI, Julius Onen, said while Uganda appreciates the developments being undertaken by the negotiations, it needs two parties to sign.

SEATINI Uganda Country Director Jane Nalunga said the mounting pressure from donors especially the EU, will not warrant proper signing of EPAs.

"There is too much pressure to seal the deal and yet we still don't know what to sign," Nalunga said.

Citing the EAC Trade Ministers meeting in Dar es Salaam in June, Nalunga said: "We failed to sign the agreement in the last meeting that we had in Dar Es Salaam in June because we could not agree".

On June 9, 2010, European Trade Commissioner Karel de Gucht met EAC Trade Ministers in Dar es Salaam, Tanzania to discuss the way forward.

Both Parties agreed to accelerate and intensify negotiations with a view to concluding a full and comprehensive EPA for mid-November 2010.

The EU had considered it in EAC's interest that the five EAC countries establish a joint roadmap. Unfortunately EAC has still not responded to this request.

This is likely due to internal reasons - such as the holding of elections in some EAC countries.

Currently about one third of Uganda's exports go to the EU Market compared to less than 2% to the US and less than 1% to China and India.