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EAC and EC sign crucial trace pact
2007-11-28 09:05:32
By Guardian Reporter
East African Community partner States have concluded negotiations with the European Commission on a pact that will guarantee duty and quota-free access of goods from the latter to EU markets.
The agreement, which Industry, Trade and Marketing minister Basil Mramba signed on behalf of Tanzania, is in respect of goods exported by the five EAC member States – Tanzania, Burundi, Kenya, Rwanda and Uganda.
According to the agreement, signed in the Ugandan capital Kampala yesterday, the only significant transition arrangements will be in respect of sugar and rice.
`This is a truly historic day as it is the first international agreement concluded by the EAC as a bloc as well as the first trade agreement concluded by the European Union with another customs union,` reads part of a statement issued by the Delegation of the EC in Dar es Salaam yesterday.
The statement says that, to ensure that the agreement complies with both parties` commitments in the World Trade Organisation, the EAC partner States will also gradually open their markets to goods from the European Union over a period of 25 years.
`After 15 years, 80 per cent of the exports from the EU will enter the EAC market free of duties. This covers mainly industrial inputs and capital goods. About one fifth of EAC trade will be completely excluded from any market liberalisation requirements,` it says.
The EC has described the pact as a first step towards a full Economic Partnership Agreement (EPA) that should lead to the establishment of `a strategic trade and development partnership with the objective of promoting regional integration and also the integration of the EAC into the global economy`.
`The negotiations will continue next year, with a view to concluding a comprehensive EPA not later than July 2009.
The parties have agreed to work together to define and address the development needs associated with the EPA in order to promote sustained growth, strengthen regional integration and foster structural transformation and competitiveness to increase production, supply capacity and value addition of the EAC,` notes the EC in the statement.
The EC has committed itself to contribute towards the resources required for development through the European Development Fund, Aid for Trade and the EU budget.
Meanwhile, the EC yesterday announced the signature of an agreement with the EAC and the Common Market for Eastern and Southern African countries that should lead to the introduction of a euro 78 million regional integration support mechanism.
The mechanism will help countries to deal with fiscal losses arising from tariff reductions and will also be used to address some key non-tariff barriers to trade, according to the EC delegation statement issued yesterday in Dar es Salaam.
`These developments are excellent news for Tanzania and for East Africa,` Enrico Strampelli, Acting Head of Delegation of the EC in Tanzania, observed yesterday in connection with the Kampala agreement.
He noted that the EAC and the EU had shown the commitment and mutual engagement to place their trade relations on a firm and legally enforceable footing.
`The challenge now is to follow up this important breakthrough with a targeted programme to help EAC states benefit from open access to EU markets: this will be a top priority for the EC in the near future and the announcement of the Regional Integration Support Mechanism is a very useful first step,` added Strampelli.
According to the EC official: `The EPA process will not end with the signature of market access agreements…but will continue with intensive discussions on the supply-side constraints such as transport and energy, and on trade-related issues such as investment and services which are crucial to growth and development.`
He insisted that EPAs need to build a solid trading platform for traders and investors and, in so doing, for development.
For the last few weeks, following an agreement by the ministers of all its five partner States, the EAC has been preparing a proposal on future market access conditions for European goods entering markets in the region.
Tanzania is yet to sign the EPAs but has played an active role in all these discussions.
Earlier story on page VI of Business and Foreign section.
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