Kenya: ESA States Okay Interim Trade Deal With EU
Kenya has joined Eastern and Southern African (ESA) countries in agreeing to a one-year interim trade deal with the EU to avoid disruption of trade with its top trading partner upon the expiry of the current pact on December 31.
The deal agreed on in Brussels yesterday during the Fourth ESA/EU Ministerial meeting now means negotiators from the two trade blocs have up to December 2008 to sign a comprehensive Economic Partnership Agreement (EPA).
It ends earlier fears that the December 31 deadline would force ESA negotiators to sign rushed pact that is detrimental to the developing economies.
"We reached a major milestone and we shall not be having any disruptions in trade both at the ESA and East Africa Community levels," Trade and Industry Permanent Secretary David Nalo told Business Daily moments after the pact was agreed.
Prior to the deal on interim trade pacts, several countries under the Africa Caribbean and Pacific (ACP) bloc including Kenya,South Africa and Nigeria had accused the EU of trying to invoke the deadline to "arm-twist" them into signing bad agreements that would hurt their economies.
They instead proposed that the EU seek an extension of a special World Trade Organisation (WTO) waiver that allows for the current preferential trade arrangement between the two blocs ahead of a satisfactory completion of EPA.
The non-reciprocal trading arrangement is based on the WTO waiver, which was granted at the fourth Ministerial Conference in Doha in November 2001 and was granted until the end of 2007.
However, in a swift reaction to those opposed to the interim deals EU trade commissioner Peter Mandelson last week said the proposals on stop-gap arrangements were in good faith to avoid disruption of activities come January 1,2008 even though developing nations had an option to by pass them and instead trade under the less generous General System of Preferences (GSP).
He ruled out an extension of the WTO waiver arguing its not within the law.
But during the Ministerial meeting attended by Mr Mandelson yesterday, it was agreed that a framework agreement be signed by November 23 to provisionally guide trade arrangements between ESA countries and the EU after December 31 because it is not possible to have an EPA within the remaining 48 days.
Zambia's Minister for Commerce, Trade and Industry led the ESA delegation while EU Commissioner for Development Louis Michel joined Mr Mandelson in the talks.
The framework agreement would have emphasis on trade in goods, development cooperation, and fisheries. "ESA countries have agreed on a tariff liberalisation schedule compatible with article XXIV of GATT will benefit fully from the Framework Agreement that will be applied provisionally from January 1 2008," the deal reached on trade in goods read in part.