Wednesday, 1 October 2014

EAC in focus as EU market access rule takes effect

QUESTION: When will the EPA agreement between the EU and the EAC be signed?
ANSWER: The EPA negotiations will be concluded when we have reached mutually acceptable solutions on the few remaining outstanding issues. Both parties consider that the agreement is nearing conclusion but some work still remains to be done on the unresolved points to bridge the gap between EAC and EU positions. The bulk of the agreement is already there and the distance to fill the gaps does not seem excessive.
The EU has recently concluded EPA negotiations with West Africa and the Southern African Development Community (Sadc) EPA Group – major milestones in EU-Africa trade relations.
The EU commitment to the EAC is as strong as with those two regions and we are confident that a deal can be achieved with the EAC as well. This would be a further step to take forward our joint EPA agenda, in line with the objectives set out in the Cotonou Partnership Agreement between the African, Caribbean and Pacific Group of States (ACP) and the EU in 2000. Trade has indeed an increasingly prominent role in this partnership, which was clearly shown at the Fourth Africa-EU Summit last April where the parties declared that it is time for a fundamental shift from aid to trade and investment as agents of growth, jobs and poverty reduction.

And why has it taken so long to finalise the agreement?
EU and EAC have, since the beginning of the negotiations in 2002, been determined to conclude an EPA. However, negotiating a trade agreement is in general a time-consuming process, not the least when there is a significant difference in the level of development of the parties. Specific national interests are at stake, giving a political sensitivity to EPA negotiations. Moreover, certain regional or national issues in the region have, at times, taken the countries’ focus elsewhere. Finally, it is also a question of incentives, as the EU has provided generous access to its market under unilateral arrangements. The EPA requires countries to take a step further and to look beyond market access and integrate the EPA in their own development plans.

How can the deadline of October 1, 2014, be respected and what will be the consequence of a late signature for the EAC countries?
October 1 is not the deadline for EPA negotiations. It is the date when the Amendment of the so-called Market Access Regulation takes effect. This regulation advances free market access to countries with an EPA. It was always meant to be a temporary bridging measure while the ACP countries were proceeding with the signature and ratification of the interim EPAs agreed in 2007. It is therefore only normal that the EU is withdrawing free market access from those countries that have not seen through these agreements seven years later.
In the EAC, this will not change anything for the Least Developed Countries (LDCs) such as Tanzania, Burundi, Rwanda and Uganda, which will continue to export their products to the EU duty-free quota-free under the Everything But Arms scheme. Kenya as a non-LDC, in turn, will move from the Market Access Regulation to the EU’s standard Generalised Scheme of Preferences for developing countries, which means that there will be tariffs on some products originating in Kenya (e.g. cut flowers, vegetables) but those tariffs will be lower than normal third-country tariffs. Once the EPA negotiations are concluded, Kenya will be able to return to the free access regime. We hope this will happen quickly.