EAC external trade deficit gap could be narrowed with EU pact

Trading with the European Union (EU) as a regional bloc will enable East African Community (EAC) states reduce on their external trade deficit, Amb. Valentine Rugwabiza, the Minister for EAC affairs, has said. Amb. Rugwabiza was explaining the benefits of the long-awaited EAC-EU trade pact to the regional economies. Over the weekend, EAC partner states reached a consensus on the contentious clauses in the Economic Partnership Agreement with the EU. This, the minister said, allows them to embark on the final negotiations with the EU which started in 2007. “The bilateral trade agreement will allow favourable tax regimes, guarantee market access for goods from both blocs, enable technology transfer to the region, create value-addition for products and services, and create jobs,” she told journalists in Kigali yesterday. Rugwabiza noted that the region’s low export earnings were mainly as a result of the low production levels of goods and services, high costs of exporting and the high quality standard levels required by European markets. “This pact will enable us diversify the level of exports, undertake the EAC infrastructure projects in order to lower transport costs, and gauge how much to invest in order for our businesses to be able to meet EU quality standards,” she said. The EU has for long been a good market for products and services from EAC and the reverse is also true. In the first half of this year, Rwanda’s total exports increased by 1.2 per cent in value to $ 293.53 million (Rwf202 billion) from $ 289.92 million (Rwf199.4 billion) in the same period last year, according to figures from the central bank. Tea, coffee, minerals, hides and skins and pyrethrum are still regarded as the country’s major exports which, in spite of the value increase during the period, their total export volumes declined by 1.8 per cent during the period. Amb. Rugwabiza said that increasing production volumes, maintaining consumer standards, streamlining transport costs and ensuring other trade operations go on smoothly in the bloc will allow goods from the region to become more competitive.

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EAC external trade deficit gap could be narrowed with EU pact