EU sets EPA deadline signing for October
Uganda seems not yet prepared to conclude the on- going EAC- EU Economic Partnership Agreement (EPA) trade, analysts have observed.
The Africa Caribbean Pacific (ACP) European Union EPA negotiations were launched in 2002 under the Cotonou Partnership Agreement (CPA) where parties agreed to conclude new World Trade Organisation (WTO) compatible trading arrangement, remove progressively barriers to trade between them and enhance cooperation in all areas relevant to CPA.
Despite negotiations spanning over 12 years with remaining contentious issues unresolved, the European Union has put 1 October 2014 for concluding the negotiations. This means countries that have not signed or ratified EPAs by October 1 2014 will be removed from the list of beneficiaries of the duty Free Quota free market access.
Jane Nalunga the SEATINI- Uganda country director noted that much as the five partner EAC states- Kenya, Uganda, Rwanda, Burundi and Tanzania- decided in 2007 to strengthen their regional integration agenda and negotiate EPA as a bloc under the initial Framework Economic Partnership Agreement (FEPA) nothing much seems to be effective as a bloc.
“The stated objective of EPA was to ensure sustainable development of ACP countries and to ensure smooth and gradual integration into the global economy and eradicate poverty but so far the negotiations have not addressed these objectives,” said Nalunga at the EAC-EU EPA review workshop in Kampala.
Nalunga said there were still contentious issues which are critical for the EAC future development and make EPA a tool for the EAC’s sustainable development.
She notes that during the January 30 2014 ministerial meeting in Brussels the EAC ministers and EU commissioner for Trade failed to agree on the three most important matters such as Duties and Taxes on Exports, article 16 the Most Favored Nation (MFN) clause and regarding the issue of Rules of origin and agriculture.
“The EAC states wont access European markets if we don’t sign EPA by October 1 but how prepared are we when some clauses are still not agreed upon?” she asked.
Ambassador Nathan Irumba a lead negotiator and former Ugandan envoy to Geneva said the preferences have not helped the EAC partner states to up their production. “Is the framework development friendly? I don’t think this EPA is helping regional integration. They are just about getting market for their products and get us out of business,” said Irumba.
Moses Ogwal the Private Sector Foundation policy and advocacy nanager said Uganda would lose out if it doesn’t sig the EPAs. “To us from the private sector, October is very near and something must be done before we lose out,” said Ogwal.
However, Emmanuel Mutahunga the senior principal commercial officer in the Ministry of Trade who has been at the forefront of the negotiations said some progress had been made.
“Our focus was to strengthen regional integration which is successful. The EAC and EU both agreed to create market access for their products. Some products had tariffs on them but are now zero rated,” he said.
He said signing of EPAs is geared towards avoiding trade disruption between ACP and the EU after the expiry of the Cotonou agreement. “The EAC market access offer constitutes 82.6 percent liberalization of imports from the EU over a 25 year period while raw material and capital goods attract zero tax rates under the EAC customs protocol,” he said.
Mutahunga said intermediate input attracts 10 percent import duty. He observed that 17.4 percent of the imports from the EU are not included under the liberalized regime.
He said areas that had so far been discussed include the economic development, agriculture, Rules of Origin, and Export taxes. He said areas still under contention include the Most Favored Nations clause, and the dispute settlement.
“We all agreed that further work is needed to conclude the issue of Rules of Origin and the Most favored Nation clause,” he said.
Mutahunga noted that the EU still remains an important market for the EAC. “The EU is the second major destination of Uganda’s products and one of the leading inflows of imports and investment,” he said. He acknowledged that the negotiations have taken long to conclude but is worth the wait.