The East African Community and the European Union signed a provisional agreement on trade partnerships last week on Tuesday in Kampala, Uganda.

The agreement will remove trade barriers between the EAC and EU and will also provide a mechanism for the continuation of negotiations on a permanent agreement beyond December 31, 2007.

‘This framework agreement signed will be provisionally applied from January 1, 2007 until such a time that a comprehensive and full Economic Partnership Agreement (EPA) is negotiated and signed by both parties,” the document read.

The two trading blocs will notify the World Trade Organisation once a final agreement is reached.

The current one consists of deals related to trade in goods, market access, development cooperation, and fisheries, according to a statement released by the EAC Secretariat.

Under the deal, the European Commission granted the EAC access to the EU market without having to pay duties or respect quotas.

The EAC partner states will also gradually open up their markets to goods from the EU over a period of 25 years.

About 80 per cent of exports from the EU are expected to enter the EAC market free of duties after 15 years.

Imports that will remain subject to duties will include industrial inputs and capital goods.
On economic cooperation, both parties affirmed their recognition of development needs for the EAC region.

The parties agreed to work together to define and address the development needs associated with the both the provisional and final EPAs in order to promote sustained growth, strengthen regional integration.

They will also work to foster structural transformation and competitiveness to increase production, supply capacity and value addition of the EAC countries.

Discussions have gone on for the last 15 years. The EU has been criticised in the past by African countries for being unjust and stalling the negotiations.

The EAC is one of a number of groups under the African Caribbean and Pacific bloc that have been separately negotiating with the European Union. Recently, it broke away from East and Southern Africa to negotiate on its own.

Economists and governments alike have criticised the provisional EPA, which critics suggest is a deal made at the expense of African businesses.

Officials from the International Monetary Fund said the EPAs could damage developing African countries by cutting their customs revenues. Many developing nations rely on customs duties for revenue because they are easier to collect than other taxes. 

"The long-term impact of the discussion will certainly be positive to the Africans but you need to address the short-term concerns that are being raised by the Africans as well,” the IMF’s Africa director Abdoulaye Bio-Tchane told the BBC.

Although the EPAs will allow most products to be traded duty-free between the EU and the other blocs, there are expected to be exceptions for particularly sensitive products such as sugar and rice, the trade of which will be liberalised more gradually.

A British international organisation has also warned that the recently signed EPA could result in unemployment and loss of revenue for countries in the African economic bloc.

Oxfam International in a statement to New Times advised that other developing countries should ‘take heed of the range of voices raised against these deals and continue to ask the (European) Commission for more time to negotiate a pro-development deal, and for feasible alternatives to be considered.’

Luis Morago, Head of Oxfam International’s EU Office said, ‘Developing countries have been placed under enormous pressure to sign. Despite concerns raised by many, the Commission has ignored possible alternatives and insisted on the deadline.

‘They have essentially forced the EAC to choose between guaranteeing markets for their agricultural exports today, and maintaining a degree of protection to promote future industrial growth - which all developed countries have done in the past.’ 

He said that the deal signed will oblige the ‘East African region to remove 80 per cent of its tariffs on EU goods over 15 years, possibly more quickly, which could lead to unemployment and loss of vital government revenue that might otherwise be spent on health and education.’

‘It suits the Commission to spread the impression that regions are falling into line and the rest should do so too. But we would urge other countries to take heed of the range of voices raised against these deals and continue to ask the Commission for more time to negotiate a pro-development deal, and for feasible alternatives to be considered,’ he was quoted as saying.

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