EU Warns Continent Over Sluggish Pace of New Trade Deal Talks
Business Daily, Nairobi
EU Warns Continent Over Sluggish Pace of New Trade Deal Talks
25 February 2008
By Mwaura Kimani
The European Union has raised concerns about the speed at which African countries are moving towards negotiating for a comprehensive trade deal with Europe, which is expected to fast-track economic integration in the region ahead of the December deadline.
EU officials have warned that African nations could find themselves in trouble similar to what they faced in December when they almost lost preferential access to the European market, which holds a key economic lifeline to many countries, including Kenya.
This is because of failure to beat an end-of-year World Trade Organisation deadline on negotiating a comprehensive trade deal. The crisis was averted when Kenya and other nations signed interim pacts to avoid possible trade disruptions.
This is the first time that the EU is speaking out against the threat to its trade relations in Africa in the face of growing pan-Africanism pushed by rich nations in the African Union opposed to the kinds of interim deals that the European regional bloc signed with Kenya in December as the continent struggles to forge a united front in global trade negotiations.
Countries like Kenya have been seen to be undermining the continent’s zeal for a more radical position-which is being pushed by South Africa’s President Thabo Mbeki and Senegalese leader Abdoulaye Wade- by negotiating sweetheart deals in its national interest as it did late last year with the interim Economic Partnership Agreement (EPA).
Nairobi’s decision ruffled diplomatic feathers in many states, including neighbouring Tanzania. Kenya has been a key ally of the European Union and the US after it took a more pragmatic route in trying to resuscitate the troubled World Trade Organisation (WTO) Doha trade round together with other smaller nations.
The Doha Round has been on the skids for the better part of this decade because of opposition by countries such as India, South Africa and Brazil, which are about to get into the rich nations club.
Mr Stefano Manservisi the European Commission director general for Development and Relations with Africa, Caribbean and Pacific States , says African states must speed up the negotiation process or else they could face disruptions in 2009.
A delay in the implementation of a comprehensive EPA by December may see most African countries such as Kenya face the risk reverting to the less generous general system of preferences (GSP).
Statistics show that should Kenya’s trade regime with the EU revert to GSP, some products that have been entering the European market at zero duty would attract a levy of between 8.5 and 15.7 per cent - an issue that most producers have argued would jeopardize chances of remaining competitive in their traditional main export markets in Europe.
"Its time to look at the actual contents of the interim agreements and move forward with speed to craft a comprehensive deal." The quicker the better for them," he said.
Though African trading blocs and the EU are supposed to have signed a comprehensive Economic Partnership Agreement (EPA) by December 31 this year, Mr Manservisi expressed fears that this could not be done within the year, citing wrangles within the various blocs.
"There are differences among and within the trade blocs, but they can share experiences towards a common regional bloc. There will be no Pan Africa integration without first setting strong pillars of regional co-operation."
But representatives from various regional trade blocs in Africa say the trade concessions being offered by Europe were not good enough given that many poor countries were opening up their economies to fierce global competition from big foreign firms.
They say that budgetary support programmes were inadequate to help them cushion their economies as they moved to implement the new EPA and accused Brussels of not making a binding financial commitment for additional resources.
"The region is already experiencing financial difficulties in securing enough resources from EU and what has been awarded is a far cry from the real needs" said Mr Eriya Kategaya, the chairperson of the EAC Council of Ministers.
Mr Kategaya says only €2 million had been made available for sharing under the Inter-Regional Coordinating Committee (IRCC), which brings together Comesa, EAC and IGAD.
"They are not willing to talk of any extras on development and instead cite the EDF (European Development Fund) which has always been in existence. There is nothing new," he said.
Trade between 80 African, Caribbean and Pacific (ACP) nations, including the EAC member states and the EU has been based on a preferential framework that grants nearly all products originating from the ACP duty-free access to the European market.
A recent African Union summit in Addis Ababa resolved that any trade deals with Europe must be ratified by the AU, blocking countries from signing interim trade deals with Europe.
Trade experts said the pacts, which were signed between some regional trading blocs and Brussels, are against the drive for Africa’s unity.
Of interest to the AU will be the exclusion from the final agreement certain clauses that are deemed to work against regional integration efforts in Africa.
Besides, the AU is also said to be keen on a final pact that will ensure that all members duly benefit from development assistance packages that comes with the EPAs.
Although Comesa has been pursuing joint trade deals with the EU under the Eastern and Southern Africa (ESA) platform, only nine of the 16 member states have signed new pacts with Brussels- under separate platforms.
"We have come to a critical juncture where we have to move fast. It is a shame for us to be lectured by the EU over the delays, whereas it’s us who will eventually benefit," Comesa secretary-general Erastus Mwencha told the Business Daily.
Mr Mwencha, who is also the AU deputy chairman, said although the interim deals had helped countries like Kenya to avert disruption of trade, they had failed to address the critical aspect of development and instead driven a wedge among African states
