EAC states to build new economic partnerships

Kenya and other member states of the East African Community (EAC) are expected to negotiate new economic partnership agreements with the European Union before expiry of an interim deal at the end of next month.

Eric Van Der Linden - the head of the European Union delegation in Nairobi has said that he expects the five member states to come up with a common position when the interim one year EPA deal expires on December 31 , this year.

Technical level

“We have had active consultations at the technical level. What remains is the signatures,” said Mr Linden.

Initial indications were that the EAC countries would sign a framework on the economic partnership agreements (FEPA) by end of July this year.

Most African, Caribbean and Pacific (ACP) countries, Kenya and its EAC partners among them, were however unable to beat this deadline.

According to EAC officials, certain contentious issues, especially with regard to development and aid to trade, were yet to be satisfactorily addressed.

As the deadline looms, top officials from the five EAC states are currently meeting with the hope of ironing out the outstanding issues to pave the way for a full EPA, to be effected from January 1, 2010.

Kenya is represented at the Arusha talks by officials from the ministries of Trade and East African and Regional Co operation.

If Kenya does not sign the FEPA, its trade terms with the Europe will revert to the less generous market access terms available under the General System of Preference (GSP).

This would mean that some of the products it has been exporting to the EU at duty free will attract duty of between 8.5 and 15.7 per cent costing the country billions in revenue.

“Kenya cannot negotiate alone. It is up to the EAC secretariat to own the process,” said Mr Linden.

The ACP states and the EU agreed in Cotonou in 2001, to establish a new trade regime in the form of EPAs to be signed between the EC and countries willing and ready to do so by December 31, 2007, before the extension was granted.

The EU undertook to provide non-reciprocal, duty free market access to all ACP countries except South Africa during the intervening period.

Trade relations between the ACP countries and the EU had, since the 1980s, been guided by non-reciprocal trade preferences which granted nearly all products originating from this ACP states duty free access to the European market.

The non-reciprocal trading arrangement was based on a WTO waiver, granted at the 4th ministerial conference in Doha in November 2001 which was set to expire at the end of 2007 on the assumption that it would not be necessary after that.

But despite this preferential treatment, the ACP states were hampered by a narrow export product range and other challenges.

Their share of total EU imports fell steadily over the years.

To remedy the situation, the two regional blocs sought to negotiate an alternative trade agreement that took not only north-south trading opportunities into account, but factored in south-south trading and regional co-operation as well.

This shift took place against the backdrop of increased pressure from the World Trade Organisation (WTO) to move away from non-reciprocal trade.