East African states to shield domestic industries in EU trade pact
Angola Press | 13 October 2007
East African states to shield domestic industries in EU trade pact
Nairobi, Kenya,10/13 — East African Ministers of Trade on Friday agreed to sign the Economic Partnership Agreement (EPAs) with the European Union as a bloc before embarking on detailed negotiations with the Eastern and Southern Africa states.
But the ministers stated categorically that the regions common taxation regime of zero tax for all raw materials, 10% tax on semi-processed goods and 25% for finished products such as cars and machinery would be retained after the signing of the EPAs.
The Ministers of Trade took the decision at a meeting in Nairobi during which they agreed to sign the trade deal with the EU but maintained that the regions common taxation regime would not be interfered with when the trade deal is signed.
The ministers also demanded more money for trade, saying European support to African producers should not be a matter adopted in an ad hoc manner but should become a long-term partnership to guarantee development.
The East African Community (EAC) has five member states, Burundi, Kenya, Rwanda, Uganda and Tanzania. The five countries are members of the EACs Customs Union, a common taxation regime in which all goods are subjected to equal treatment.
The ministers, in a statement issued on Friday through the Arusha-based EAC Secretariat, said they would sign the accord provided it was harmonized with the EAC Customs Union provisions, which contained the three-band taxation system.
"This harmonized common market access proposals take into account that EAC Customs Union provisions will be protected and promoted and that it will provide scope for the necessary negotiations for space for EAC states and the European Union," they said.
"The EAC Partner States will also present this harmonized EAC-EPA text as the common text to be finally agreed upon with the EU," the ministers added.
The EU is pushing African states to grant tax-free entry to its goods in exchange for access to its markets under the new EPAs, which differ from the non-reciprocal trading regime adopted in 1975 known as the Cotonou agreement.
The Cotonou agreement is due to expire this year and the African, Caribbean and Pacific (ACP) states, which include all countries in Africa except South Africa, are expected to renew the accord.
African trade organizations, lobby groups and international development organizations have accused the EU of pushing weak African states to compete with industrialized goods without the option of subsidies such as those enjoyed by their producers.
The development groups say the move would wipe out Africas bid to become industrialized and would eventually lead to the collapse of infant industries in the continent with its long-term effect of making Africa dependent on the west.
The ministers said the harmonisation of the EAC proposals includes sensitive lists, tariff phase down period, trade defence instruments and the rules of origin.
"The Ministers were further unanimous that the issue of development needs should be uploaded into the current EPA negotiations framework in order to address the supply side constraints. These development issues should be leveraged with clear benchmarks and budgeted priorities so as to establish a clear and long term partnership," they said.
"In adopting this parallel approach, the EAC will ensure that its harmonized common proposals will be part of the negotiating process."
