Wednesday, 22 August 2007

EAC states avert major dispute over trade agreements with EU

The EastAfrican
A major dispute between partner states of the East African Community has been averted after the parties agreed that all the five members will now collectively sign one Economic Partnership Agreement (EPA) with the European Union when the current Cotonou pact governing trade between the EU and the ACP (Africa, Caribbean and Pacific) countries expires at the end of this year.

The decision to negotiate under one roof was reached at a meeting of permanent secretaries and technocrats for trade and regional co-operation held in Arusha last week, ahead of a crucial meeting of the presidents of the region to be held on Monday this week.

Last week’s meeting was held against the background of subterranean tensions — between Tanzania and Uganda on the one hand, and Kenya on the other — over the configuration of the bloc under which they will enter into an EPA with the EU.

Over the past six months — with the deadline for negotiating EPAs fast approaching — a perception had grown among government officials in Uganda and Tanzania that Kenya was leaning towards the so-called Eastern and Southern Africa (ESA) group, the configuration of Comesa member states that has been negotiating an EPA with the EU as a single bloc — and to which Tanzania does not belong.

The simmering disagreements came to the surface two weeks ago, when opposition Members of Parliament in Tanzania claimed that Kenya had decided to deal with the EU through the ESA Comesa grouping — with the Opposition MP Zitto Kabwe alleging that Kenya’s Trade Ministry had secretly written to Comesa informing them that Kenya would negotiate the new trade agreement with Europe under ESA.

A trade expert in his own right, Kabwe has been intimately involved in EPA negotiations on behalf of Tanzania.

Against this backdrop, pundits predicted explosive differences when the regional presidents gather at the summit meeting on Monday.

However, as it turned out, the potentially explosive situation was avoided by the pact hammered out by the permanent secretaries ahead of the meeting of the regional presidents.

As we went to press, the pact among the permanent secretaries was to be tabled before a meeting of ministers in charge of trade and regional co-operation for adoption on Thursday before being presented to the five presidents for final approval.

Insiders told The EastAfrican that tensions were high on Monday last week when the permanent secretaries gathered to discuss the matter in Arusha.

The mood only changed after the Kenyan delegation did a climb-down, assuring the meeting that it had never been Nairobi’s intention — even in the first place — to take a different approach from other member states of the East African Community on EPA negotiations.

Kenya reaffirmed that, like the other partner states of the community, it was bound to sign an EPA under the East African Customs Union as stipulated in the East African Customs Management Act.

“The question is what vehicle the EAC should use to conclude the EAC EPA,” the leader of the Kenyan delegation and the country’s Permanent Secretary for Trade, David Nalo, stressed.

Apparently, Kenya is of the view that the process of steering the EPA negotiations with the East African Customs Union should be left to the EAC secretariat.

Nairobi’s plea, however, is that member states of the community must understand that the country is too intimately involved with what is going on at the ESA level and should, therefore, be allowed to continue engaging at that level, as long as it does not compromise its commitment to the East African Customs Union.

President Mwai Kibaki is the current chair of the Comesa Authority, while Trade Minister Dr Mukhisa Kituyi is chair of the ESA Council of Ministers.

On their part, the Tanzanian delegation said that the country was in full support of an EAC EPA configuration, given that the community already has an operational Customs Union with a complete trade regime.

The Ugandan delegation also supported the ECA EPA configuration, as did Rwanda.

It was stressed at the meeting that at no time had it been suggested that Burundi, Kenya, Rwanda and Uganda leave Comesa, or that Tanzania leave the SADC EPA configuration.

At the end of it all, the following decisions were made: First, that the EAC EPA configuration be made open to other countries that are willing and able to comply with the provisions of the East Africa Customs Union.

Second, that the EAC EPA take into account the milestones reached under either ESA and/or SADC EPA in coming up with the new EPA for the East African Customs Unions.

Third, the EAC secretariat immediately open negotiations with the ESA EPA and SADC EPA configurations to agree on areas of joint negotiations.

Fourth, that the European Commission be requested to provide a formal commitment by October this year that there will be no disruptions to trade after December 31.

In a sense, this is first time countries of the region are waking up to the problem of overlapping memberships of regional economic groups.

Tanzania pulled out of Comesa in 2000 and joined SADC.

Thus, while the rest of the members of the East African Customs Union are members of Comesa, Tanzania is the only country with a Free Trade Area access to SADC.

Compounding the problem is the fact that SADC and Comesa have been negotiating with Europe separately.

The so-called ESA negotiating group comprises 16 of Comesa’s 19 member countries — the exceptions being Angola, Egypt and Swaziland.

On the other hand, the SADC negotiating group includes 7 of that bloc’s 13 member countries, namely Angola, Mozambique, Tanzania, Swaziland, Lesotho, Botswana and Namibia.

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