Thursday, 6 September 2007

EU’s stalling on trade deal leaves exporters anxious

Special Correspondent
The European Union’s failure to commit itself on whether trade between the bloc and the African Caribbean and Pacific countries will be disrupted when the Lome Convention expires in December has sent negotiators on one hand, and traders on the other, into renewed anxiety.

Last week, horticultural export associations from eight African countries met in Nairobi and expressed concern that despite reports trickling in from different quarters that an agreement had been reached not to disrupt trade until a new trading dispensation is concluded, the EU has not given its assurance.

Chairman of the Horticultural Council for Africa (HCA) Hasit Shah said they have recommendations that they want the EU to commit to by October to clear the uncertainty over the future of trade.

The HCA concerns come just a week after the Common Market for East and Central Africa secretary-general Erastus Mwencha said that, under the East and Southern Africa (ESA) grouping through which 16 African countries have been negotiating with the EU for an Economic Partnership Agreement to replace the Cotonou pact which comes to an end January next year, both parties had settled on a raft of agreements which would see trade continue pending conclusion of the EPAs.

Kenya’s Ministry of Trade, last month expressed similar sentiments, with the director of External Trade Peter Mwaniki saying that both ESA and the EU had come to an agreement on how trade would be conducted in the absence an EPA.

But neither Comesa nor the government have been forthcoming on what the agreement entails, the common denominator being that a list of sensitive products has been drawn and is at an advanced stage of discussions.

Two weeks ago, the list contained over 2,000 products, which the EU said was too long and wanted revised. As at last week, it had been reduced to 1,700 — still considered too long — and has since been returned to members for further reduction.

According to Rod Evans, the deputy chairman of the Kenya Flower Council and a key member of the EPA negotiating team, Trade Minister Dr Mukhisa Kituyi has written to the EU, asking for a firm commitment that there will be an interim arrangement for continued preferential trading with Europe.

Dr Kituyi confirmed writing to the EU and expressed confidence that a commitment would be granted soon.

He added that pushing for the interim agreement was now a priority.

HCA said that the fresh produce sector stands to lose most because growers have contracts extending beyond January 2008, and these contracts, to supply supermarkets at fixed prices are based on the existing trade regime.

“Should things change in January,” Mr Shah said, “Our produce will be subjected to price rises, which could lead to immediate loss of markets. With increased cost of produce, we may not be able to sell what we have already planted leading to massive losses.”

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