Business Daily | Tuesday, September 29 2009
Africa sets terms for granting EU full market access
By Steve Mbogo
Africa is asking its team of trade negotiators working on the Economic Partnership Agreement to focus on economic development before deciding on opening up markets to the European Union.
Mr Erastus Mwencha, the deputy head of African Union Commission, says the continent should not be tied to timelines on the deal that envisages full access to African markets by 2025.
Mr Mwencha on Monday told the EU-Africa Business forum in Nairobi that the proposed date was unrealistic.
Africa will wait for national incomes and the efficiency of its industries improve to compete with the EU, the official said.
“It is not practical. It is not possible because we don’t know how the level of our economic development will be by 2025,” said Mr Mwencha.
The EPA deal guarantees Africa unrestricted access to EU markets but unlike the previous pact that expired in 2007, African countries must open up their markets to the EU products and services.
If the trade deal is agreed, African countries will continue to have unrestricted access to EU market.
The full access to African markets by the EU is envisaged by 2025, said Stefano Manservisi, the European Commission director general for development.
Mr Mwencha said new developments like the financial crisis may affect the pace of Africa’s economic growth. He said African negotiators at the EPA talks have been instructed to go for socio-economic development and industrial competitiveness as parameters for full market access by the EU.
“Our interest is for a long term, stable and predictable relations. That is what we are going for,” Mr Mwencha said.
The opening up of the African market to EU goods has been contentious with the civil society saying it could wipe out prospects for the continent’s industrialisation. The opening up of the market will also mean an end to the customs duties or taxes that Africa levies on EU imports.
An earlier study done by civil society groups in East Africa Community found that the five countries would lose about Sh12 billion in uncollected taxes.
Trade activists also said opening up of African markets will reduce the pace of intra-Africa trade. As a result, the continent has lobbied for the EU to support the integration of regional trading blocs as a prerequisite for its continued participation in the EPA talks.
Mr Manservisi said EU has committed 650 million Euros (Sh65 billion) to help the eastern Africa countries including Comesa members to improve conditions for regional integration like setting up of regional institutions.
Sindiso Ngwenya, Secretary General of the Common Market for Eastern and Southern Africa (Comesa) said another critical issue in the EPA negotiations is the Most Favoured Nation (MFN).
In MFN, Europe wants same bilateral preferences the EAC extends to any country with a more than one per cent share of global trade.