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MPs want Uganda out of EAC-EU trade deal

East African | 5 May 2008

MPs want Uganda out of EAC-EU trade deal


Parliamentarians are pressurising Uganda to revoke the interim trade agreement signed between the European Union and the East African Community.

The Ugandan MPs claim the partial Economic Partnership Agreement (EPA) signed at the close of last year entrenches “unfair treatment” of the five-member bloc. Uganda currently chairs the Community, and it is believed that Kampala spearheaded the negotiations that led to the agreement, also signed by Kenya, Tanzania, Rwanda and Burundi.

Last November, as part of the Economic Partnership Agreement negotiations, EAC initialled - without parliamentary debate - an interim framework agreement with the EU ostensibly to avoid disruption of exports to the latter bloc following the World Trade Organisation-mandated expiry of the Cotonou pact with the ACP (Africa, Caribbean and Pacific) countries.

The interim agreement covers areas of market access, development and fisheries and contains a commitment to negotiate a wide range of trade-related issues by July 31, 2009.

“It is a bad agreement. It does not favour East Africa. Uganda should pull out. We have to revoke the agreement and renegotiate. That is what we are recommending,” said Felix Okot Ogong, a member of the Parliamentary Committee on Trade, Industry and Tourism.

The committee is presently evaluating the significance of the trade relationship with EU. This follows a petition from over a dozen civil society groups.

“We are negotiating for permanent poverty for our people,” MP Charles Agiro, also a member of the parliamentary committee, reiterated at the end of April.

The MPs have particularly expressed concern that opening up the regional market fully will attract dumping that could undermine local producers.

The MPs are expected to adopt a common position that will soon be debated by the whole House, whose recommendations are bound to be adopted and implemented by the executive.

Oxfam, one of the petitioners, claims the new trade deals between Europe and the Africa, Caribbean and Pacific countries will fracture regional integration, exacerbate poverty and make it harder for countries to break away from commodity dependence.

“Despite massive pressure, many ACP countries are holding out for a fair deal. Europe needs to rethink and agree to change course.”

EU and ACP member states have been holding trade talks on the EPAs since 2002. But out of the 78 countries, fewer than half had initialled any form of deal with Europe by the deadline of December 31, last year.

Initially, the aim of the talks was to conclude EPAs, which would promote poverty reduction, sustainable development and gradual integration of ACP countries into the world economy and further bolster regional integration.

But Oxfam argues that ACP countries are currently trapped in a vicious circle of selling products of low value and buying products of high value.

Benson Obua Ogwal, another member of the parliamentary committee, urged the government to scrutinise the trade deals the country is getting itself into.

“We want you to be mindful of the fact that EU coerced you into signing the agreement,” he said.

The Trade Ministry officials, however, have assured the MPs they will first consult the other EAC member states in Arusha on the impact of the interim and final agreements before taking a comprehensive position.

Trade Minister Nelson Gagawala Wambuzi, who together with the ministry’s technocrats appeared before the Committee, said they had rushed into signing the agreement for fear of losing “our potential market for flowers and fish.”

Said the minister: “There was a deadline and we had to be part of world trade. In good faith, we didn’t want our fish to rot and our flowers to be stranded at Entebbe Airport.”

Trade Ministry Under Secretary Orone Atipo repeated his minister’s position that they signed the interim agreement to create an enabling environment for private-sector growth by putting in place a predictable and transparent regime climate.

The ministry has scheduled development of a National EPA Response Strategy, with most issues already contained in the National Trade Sector Development Plan 2008/09-2012/13.

By July 2008, the EU wants all the 35 ACP countries that initialled deals to sign them. During 2008 and 2009, it wants all 78 to complete negotiations on full EPAs.

Oxfam says the ACP countries are home to more than 12 per cent of the world’s population, but earn only two per cent of global income.

“In Africa, despite the highest levels of growth for 30 years, the number of people living in poverty or without a job is increasing,” says Oxfam.

The talks have been criticised by the African Union, the UN, the World Bank, farmers and the business community, who claim that in practice the trade deals will strip ACP countries of the very tools they need to develop.

Under the trade agreement, the EAC commits to open its market to goods from the EU in three phases over a period of 25 years. In the first phase (2008-2010), the EAC will liberalise 64 per cent of imports from the EU; while in the second phase (2015-2023), 16 per cent of imports will be liberalised.

In the last phase, (2020-2033), the EAC will liberalise two per cent, making a total of 82 per cent of imports from the EU being liberalised.

Temporarily, 18 per cent of EAC trade with the EU, which covers sensitive products, is supposed to be excluded from market liberalisation requirements.

But the civil society groups assert that the provision is rendered nurgatory by the “standstill” clause whereby EAC has agreed not to increase the applied duties on all their products.

That implies that should the East African states decide to raise tariffs in sensitive agricultural areas such as dairy products, they will be unable to do so.

The Ugandan MPs have argued that despite the EU’s offer of duty free and quota free market access for all products originating from the East African Community, under the previous arrangement of Everything-But-Arms (EBA), the EAC, apart from Kenya, had already been benefiting from similar market access without strings attached.

 source: East African