Europe warns EAC over delayed trade pact

Brussels on Thursday said its patience in the long-drawn out negotiations for a new trading pact with East Africa had run out, signalling that the flow of goods from the region to Europe may soon hit a rocky path.

The European Union said it will no longer tolerate indecisiveness on the economic partnership agreements (EPAs) and demanded that the Council of Ministers meeting in Arusha this morning resolve the matter.

“More than two years after initialling the framework EPA with the EU, the East African Community has not signed it yet, a situation that cannot be sustained,” said the EU head of delegation in Tanzania, Mr Timothy Clarke.

“We would like to convey a clear message to the EAC ministers that it is now time to follow through with the clear forward-looking agreement of 2007, when negotiations on a framework EPA were concluded, and turn this new trade and development partnership into reality,” he added.

The warning means the EU could fix a deadline by which East Africa must sign a new EPA or risk restricted access of its goods to Europe.

Failure to conclude the deal could, for instance, mean that all EAC member states be forced to trade with Europe under the less attractive market access terms provided for in the General System of Preference (GSP).

For Kenya, such a move would mean that key exports to Europe such as cut flowers would start attracting duty at between 8.5 and 15.7 per cent scheming off an estimated Sh10 billion in lost revenues. They currently attract none.

EAC and EU have since 2007 been holding high-level negotiations for a new deal following the expiry of the one in which Europe granted duty-free market access to goods from all the African Caribbean and Pacific (ACP) nations except South Africa.

The old deal was based on a non-reciprocal trading terms with Europe and was discarded on the grounds that it failed to yield much fruit for the ACP countries because of its narrow export product range and the failure to comply with World Trade Organisation rules.

The two blocs have been negotiating an alternative agreement that opens trading opportunities between them without blocking the growth of south-south trade.

The new EPA was to have been signed by December 31, 2007 when the old Cotonou agreement expired but disagreements over key aspects of the deal forced the EAC to sign a temporary agreement to prevent a fallout and loss of access to the lucrative European market.

Failure to beat the deadline was also linked to the EAC’s opposition to the development assistance and trade in services clauses of the pact.

“We are keen to come up with an agreement that is acceptable to both sides. It would be foolish for us to rush discussions for purposes of completing without getting a good deal for our people,” Kenya’s Trade minister Amos Kimunya told journalists in Nairobi.

He said the EAC was still monitoring changes in the EU’s team of negotiators.

“There were changes on the EU side at the commissioner’s level and we have been following that to see how they affect our ongoing negotiations. The important thing for us to remember is that all these negotiations must in the long run serve East Africa in the best possible way,” he said.