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Uganda: Now EU courts country to sign EPAs

The East African (Nairobi)

February 20, 2007

Now EU Courts Country to Sign EPAs

By Julius Barigaba, Special Correspondent

As debate on the contentious Economic Partnership Agreements (EPAs) rages on, the European Union now wants Uganda to sign the trade pact and continue to negotiate for tariff waivers while on board, according to EU trade experts.

The EPAs are at the centre of a markets war, as the World Trade Organisation (WTO) seeks to end poor countries’ preferential access to EU markets by 2008.

The EPAs are intended to force 77 least developed African, Pacific and Caribbean (ACP) countries to offer reciprocal market access for their EU trade partners - and eventually to all WTO members. This will be enforced at the expiry of the Cotonou Agreement, which was signed in 2000, giving the ACP preferential and non-reciprocal EU market access.

Uganda has benefited from this window since 2001, exporting mainly agricultural products, while the EU exports consumer goods to Uganda.

ACP countries, Uganda included, have remained sceptical about the EPAs because of the likely competition from EU member countries. Uganda has made very little progress in the negotiations towards an EPA, and officials say the country needs more time before it signs on.

Dr Sam Nahamya, Permanent Secretary in the Ministry of Tourism, Trade and Industry, told The EastAfrican that it is in the interest of the EU to give ACP countries more time to complete the negotiations.

"Why do you think they are pushing us to sign? It is also in their interest to give us more time. How can we sign something which is incomplete?" asked Dr Nahamya.

However, time is not on Uganda’s side, as the negotiations to sign the EPAs are nowhere near conclusion, while the Cotonou Agreement window expires at the end of this year.

Uganda wants the EPAs to have a clause that gives the country preferential access to the EU for another 10 years. At the same time, it wants assurances that products from elsewhere will not immediately flood the local market, a situation that can only be guaranteed by the WTO, according to Tom Vens, EU’s head of trade section at the Kampala mission.

If Uganda does not sign by December 31, the EU will come under pressure from the WTO to either cease trade relations with Uganda or to open its markets for all WTO members.

This means that Uganda will lose its largest export market, worth over $380 million as of 2005 from exporting mainly fish, flowers and other agricultural products to the EU.

During a video conference between EU officials in Brussels and journalists in Kampala, the former said Uganda will not be subjected to the new tariffs immediately.

"Signing the EPAs does not mean Uganda will start to implement the new tariffs," said Peter Thompson, EU’s Director of Trade Development. "The EPA doesn’t say there is a single penny that has to be cut from tariffs immediately. But if Uganda does not sign we are in a legal void."

The officials said once on board, Uganda can then negotiate for a period of time within which its exports to the EU can start to attract taxes under the tariff regime that will be ushered in on January 1 next year.

The EU blames the delays, particularly in the East and Southern African (ESA) region on the many regional economic blocs. But Uganda’s Permanent Secretary the Trade Ministry has for the first time said blame for the delayed negotiations should rest on the EU as well over its slow disbursement of funds for EPA studies within the ESA region.

Mr Vens declined to comment on the issue of funding but advised that Uganda should concentrate on meeting its obligations towards the deadline. Uganda’s negotiating team will travel to Brussels at the end of this month to push for an extension, a source said. and is positive that the EU will offer one.