Africa: Continent Rejects Sections of Trade Deal With Europe
Negotiations for comprehensive trade deals between Europe and Africa are headed for another bumpy stretch as finance and trade ministers from Africa sought to remove certain clauses from interim pacts signed between the two blocs.
They claimed the interim Economic Partnership Agreements(EPAs) were signed under duress leading to the adoption of certain "injurious clauses" that undermined their sovereignty . They said the clauses needed to be expunged before the negotiations could continue.
"We believe that trade liberalisation should be against a certain development benchmark which should relate to a specific country development strategy if it is to serve our development agenda," Ethiopia's minister for Trade and Industry, Ato Girma Birru, told the just concluded summit for Africa's finance and trade ministers in Addis Ababa.
Several nations, including Kenya, have signed the interim pact to avoid trade disruption between them and Europe in line with a WTO requirement.
Kenya and other states under the Africa, Caribbean and Pacific(ACP) fold had for 25 years operated on a non reciprocal trade preferences which granted nearly all products originating from the poor countries duty free access to EU market.
But this changed on December 31, 2007 after the expiry of a WTO waiver that meant duty free market access and other trade relations between the two blocs would now be non reciprocal under new EPAs.
Most poor nations were unable to beat the December 31 deadline and instead signed patch-up temporary deals with the EU as they pursued comprehensive EPA in a year's time.
But several months later, most African government have taken issues with the interim pacts, saying rushed negotiations had left them exposed to economic backlashes, besides suppressed sovereignty as nations.
Of greatest concern to them in the interim pacts are the operational clauses on development and special concessions made under the Most Favoured Nations(MFN).
According to the WTO, the MFN clause binds its members such that countries cannot discriminate between their trading partners by granting special favours such as lower customs duty rate for one of their products. If such special favours are to be granted they must apply across all other WTO members.
"The interim agreements contain some elements, such the MFN clause, elimination of export subsidies and standstill clause which have the effect of reducing the policy space for African countries.
They have focused mainly on trade in goods and based on the European Commission's rather restrictive interpretation of Article 24 of GATT(General Agreement on Tariffs and Trade) 1994.
This is in relation to the definitions of substantially all trade and the transition period for reciprocal trade liberalisation," AfricaUnion(AU) commissioner for Trade and Industry Elizabeth Tankeu told the ministerial summit.
Her sentiments were supported by Mr Birru who said some of the tariff concession structures contained in the interim pacts were unrealistic.
"Tariff reduction has no significance for the EU especially for their industrial products.On the contrary tariff means a huge source of revenue for most of our countries and it is critical for our development," he stated.
At a meeting in Nairobi, representatives of poor nations said the budgetary support programmes were not enough to help them cushion their economies as they moved to implement the new EPA and accused Brussels of not making a binding financial commitment for additional resources.
"The region is already experiencing financial difficulties in securing resources from EU and what has been awarded is a far cry from the real needs" Mr Eriya Kategaya, the chairperson of the East Africa Community (EAC) Council of Ministers told the meeting.