Status Of The EPA Negotiations As Per The 12th Regional Negotiation Forum In Mauritius

Following the 12th Regional Negotiation Forum (RNF) for Eastern and Southern African countries on Economic Partnership Agreement to be signed with European Commission by 31st December 2007, held in Mauritius from 1st to 3rd August 2007, some areas of concern that were discussed during the negotiations include:

Market Access (Trade in Goods)

• EU has offered ACP quota free, duty free market access to all APC countries.
• Sensitive list of products not to be liberalized is still under negotiation. Kenya has 1647 tariff lines which she has forwarded to ESA Secretariat for incorporation in the sensitive list. Kenya and other non-LDCs have each to reduce their list by 10% as agreed in Mauritius. The threshold for cumulative regional list will be about 30% of value of total imports from EU.
• Calculations of value of sensitive list will be based on an average of a three year period from 2004 – 2006.
• Products subsidized by EU will be put in the sensitive list as appropriate.
• Business communities should be consulted on rules of origin.
• Rules of origin will be approached on a two-phased basis i.e. developing a Cotonou plus approach targeting products of export interest to ESA with simple and development friendly rules.
• ESA countries are concerned with EU unequal treatment by EU with regards to SPS application and enforcement of SPS rules including private sector standards.
• There is transitional period of 25 years inclusive of a 10 year grace period before initiating the process of liberalization.
• There is need for consultations between COMESA and EAC on COMESA Common External Tariff.
  

The meeting decided that ESA will prioritize negotiations on trade in goods and development cooperation as well as general provisions, dispute settlement, institutional and final provisions in the EPA text.

KAM’s Position:

EC must be pressurized to continue with the current tariff preferences come January 2008. Current trade regime with EU must not be disrupted at all costs. Kenya has a Kshs.49 billion per annum horticulture earnings at stake which has a link to other sectors such as transport, irrigation machinery and equipment manufacturers, chemical and Carton manufacturers.etc. ESA countries total exports to EU were US$ 5.6 billion in 2006 and ESA – EU turn over (exports plus imports was about US$15 billion in 2006 compared to US$ 8 billion in 2002).

Kenya’s exports to EU were Kshs. 66.3 billion while export to COMESA stood at Kshs. 75.7 billion in 2006. EU is therefore an important market and we can’t afford to lose it. In Kenya, we expect competition from subsidized EU dairy and agro processed products, paper and paper products, juices and food cereals, pharmaceuticals etc. We need to factor these products in the regional sensitive list based on our economic fundamentals. EU must address subsidies under CAP for those products where we have export interest.

We need political will by European Commission and the ESA countries to ensure that transitional measures are put in place with or without conclusions of the EPA’s by December 2007. Political Commitment is necessary from the EU as orders by EU importers for delivery in January 2008 will be done in October 2007 (Normal 60 days to deliver an order in most cases). Thus formal communication by EC officials to EC Customs of member states for transitional measures is a critical requirement in order for trade between EU and ESA countries not to be disrupted.

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