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Tanzania hindering regional trade talks with Europe

Rwanda News Agency/Agence Rwandaise d’Information (Kigali) | 23 August 2007

East Africa: Tanzania Hindering Regional Trade Talks With Europe


The East African Community (EAC) is set to sign an economic pact with the European Union (EU) ahead of a December 31 deadline to avoid losing the lucrative export markets in Europe, but Tanzania is yet to agree to the plan, Kenyan official has disclosed.

Kenya’s Permanent Secretary in Trade Ministry David Nalo said the region would sign the new trade pact with EU despite obstacles posed by other EAC states because time was running out, which might jeopardize the region’s exports.

"This is not an accident and for us it is not surprising because the EU was going to sign the agreement with us (EAC) since we are already considered as one customs territory," Xinhua news agency quotes Nalo to have told journalists in Nairobi on Wednesday.

The Economic Partnerships Agreements (EPAs) should be signed before early 2008 between the EU and African, Caribbean and Pacific (ACP) states, including the Southern African Development Community (SADC) and the East and Southern African grouping COMESA.

Officials say about 70% of the components in the EU-ACP deal have been finalized and will be signed as the others are ironed out later. The 2007 deadline marks the expiry of the waiver authorizing the EU to offer preferential access to ACP products.

Kenya is Europe’s leading exporter of horticultural crops, supplying about 65 percent of the EU flower market, while Uganda is also a leading exporter of bananas. Tanzania exports huge tonnage of fish stocks to the European market.

However, Kenya risks losing the market if it fails to beat the Dec. 31 deadline for signing the draft text with European nations on market access terms following the expiry of a 1975 pact with Africa, called the Lome Agreement, which guaranteed entry.

Speaking after holding talks on expanding Africa’s agricultural exports to the rest of the world under the World Trade Organization (WTO) framework, Nalo regretted that Tanzania had abandoned the rest of the EAC members in negotiations.

"If we have done something with you, you cannot run away and abandon us," he added.

The EAC, grouping Burundi, Kenya, Rwanda, Uganda and Tanzania, recently agreed to sign a new Economic Partnership Agreement (EPA) - a new trade arrangement which will allow Europe to also access African markets without taxation obstacles.

Tanzania backed out of the consensus deal on the EPAs, struck during a ministerial meeting in Arusha, Tanzania, on Aug. 13, throwing the negotiations into confusion.

The EAC leaders met in Arusha on Monday this week and referred the EPAs back to the ministers following Tanzania’s reservations on the signing of the draft negotiating text with the EU ahead of the Dec. 31 deadline.

"The issues (EPAs) are very important for us. We have to be sensitive to the timeframe," Nalo said.

No EAC, Tanzanians say

A Social, Political Economic and Cultural Barometer, conducted by research firm Steadman Group from June 26-July 3, shows that although support for the EAC among residents in Nairobi and Kampala is high, their counterparts in Dar are not as supportive.

Whereas a minority rejected the EAC formation in Nairobi and Kampala - 10 per cent and 16 per cent respectively - nearly half (46 per cent) of residents in the Tanzanian major coastal city oppose its formation.

Steadman conducted the survey to establish awareness levels about the EAC among residents within these capital cities; support levels regarding the formation of the EAC and support levels towards admission of Rwanda and Burundi into the community.

The survey further found that one out of every 10 adult residents in the capital cities has not heard of the EAC.

Not forced deal

Mr. Nalo said the EU will sign the pact with regions already implementing a common taxation agreement like the EAC and there was no need for the EAC countries to delay the signing of the agreement.

Rwanda is set to host the region’s private sector players during a meeting next week to further expand the negotiations.

Early this month, Mr. David Nalo also refuted allegations that Europe had forced the December deadline on the ACP - that are mainly poor countries.

"Europe has not pushed the December 31 2007 deadline on us. It is part of the Cotonou agreement that we all agreed to and signed", said Nalo.

Although the European and African NGOs acknowledge that in principle regional integration can promote growth, they point out that the process is still at an early stage in most ACP regions and warn that therefore opening to EU imports before these markets are consolidated will undermine integration rather than support it.