Thursday, July 1, 2010

East Africa: Fails to Sign EPAs Due to Disagreements

Stephen Wandera, The Monitor, 30 June 2010

The signing of the Economic Partnership Agreements (EPAs) between the East Africa Community and the European Commission has been pushed to November.

Mr Silver Ojakol, the commissioner International Trade at the ministry of Trade, announced at a meeting organised in Kampala last week by the Southern and Eastern African Trade Information and Negotiations Institute (Seatini). Both the EU and EAC referred the signing to November after failing to agree on article 15 and 16 in Dar es Salaam, Tanzania.

The two articles limit EAC member states from instituting taxes on exports.

Export taxes function as an important development tool that can be used for revenue generation. But most importantly it can be used to create incentives to add value to local products rather than exporting them in their raw form; thus an instrument for promoting industrialisation and employment creation.

The agreements that seek the creation of a free trade area between the EU and EAC, have come under heavy criticism from Civil Society Organisations for being non committal on sensitive issues like intellectual property rights and movement of labour among others.

Mr Nathan Irumba, the chief executive officer of Seatini told Daily Monitor on the sidelines of the meeting that the pacts' call for the 80 per cent liberalisation is untenable since African firms cannot compete with the largely industrialised Europe.

Liberalisation vs growth

He said: "Liberalisation has to follow development and not the other way round adding that all big economies opened their markets after reaching a certain level of development." Mr Irumba cautioned EAC member states to be concerned by demands of extensive and premature liberalisation policies being pushed by the European Union.

In recent years, president Museveni has repeatedly voiced his aspiration to transform Uganda from a peasant to an industrialised economy, which as he says can only be achieved with improved trade both within and outside the country.