Saturday, February 21, 2009

EAC may seek deadline extension on EPA with EU

Odhiambo, Allan (Business Daily, Nairobi) 2009-02-13 

Kenya and other partner states in the East African Community (EAC) may push for an extension of the deadline of signing new trade deals with the European Union (EU) to allow for comprehensive agreements.

Trade Permanent Secretary Cyrus Njiru said that although discussions for the economic partnership agreements (EPAs) between the EAC and the EU are progressing well, they require sufficient time to review all forms of engagement to guard against sloppiness.

“There is a lot of good will from both sides and things are progressing well. But should we fail to iron out all issues on time we could ask [for] an extension”, Njiru said on the sidelines of a trade conference in Nairobi yesterday.

Seeking a possible extension of the deadline reflects growing pressure for sound deals that ensure regional economies are not exposed to harmful competition from the much more advanced EU.

Last week, the leadership of the African Union (AU) sounded a warning against flawed deals, urging for stronger participation of regional economic communities (RECs) in the ongoing negotiations for trade pacts with Europe.

“The Assembly has requested the AU Commission to ensure the effective involvement of the RECs and other stakeholders in the implementation and monitoring processes”, African Heads of State said in a resolution at the recently concluded 12th ordinary summit in Addis Ababa, Ethiopia.

In a bid to enforce this decision, the Assembly further requested that the Commission submit a special report to each session of the executive council on the progress made on the EPAs with Europe.

Njiru said yesterday that they are already in compliance with the order of the AU leadership and will work closely with them to deliver sound deals.

Kenya is one state in the Africa, Caribbean and Pacific (ACP) bloc currently engaged in crucial negotiations with the European Union on the new partnership agreements.

For over 20 years, trade relations between ACP countries and Europe have been based on non-reciprocal trade preferences which granted most products originating within the ACP region duty-free access to the European market.

However, ACP countries have seen their share of the EU’s total imports decline over the years amid marginalisation at the global level while their exports have remained narrowly diversified.

In an attempt to address this anomaly, the two blocs have sought to create an alternative arrangement with pressure from the World Trade Organisation (WTO) to shift from non-reciprocal trade. ACP countries and the EU had to this end agreed in the Cotonou, Benin in 2000 to establish a regime in the form of the EPAs which were ready to be concluded with the European Commission by 31 December, 2007.

Most ACP countries were, however, unable to beat the end of 2007 deadline, forcing them to sign interim agreements with the EU to avoid disruption of trade.

Several countries agreed to sign the temporary accords with Europe within the context of smaller blocs, prompting protest from the AU on the basis that such moves weaken their bargaining position and expose their economies to harm.

The former AU leadership under Alpha Oumar Konaré, Senegalese President Abdoulaye Wade, and former South African President Thabo Mbeki were the first to voice concern in 2007.

“We did initialise the deals because the damage that would have resulted from the failure to do so would have been larger. Key sub-sectors such as our horticulture industry would have been wiped out”, said Njiru in defence. “Nonetheless we have our eyes on landing bigger and better deals going forward. We are positive of finding a good deal.”