The Nation | Monday, 26 July 2010

Malawi maintains ‘no’ stand on EPAs

Taonga Sabola

Industry and Trade Minister Eunice Kazembe on Monday reiterated the need for the European Union (EU) to address institutional, infrastructure and capacity factors that have stopped Malawi from taking advantage of previous preferential access to the EU before it can sign the controversial Economic Partnership Agreements (EPAs).

Kazembe was speaking in Blantyre at the start of a high-level meeting on the role of Malawi in ESA-EPA negotiations. The meeting has attracted government officials, business captains, civil society players and media gurus to discuss some of the challenges affecting Malawi’s signing of the trade pact.

She said Malawi’s ability to trade in a way that promotes development is negatively affected by crippling supply-side constraints.

“As an LDC [Least Developed Country] and land-locked country, transport costs are extremely high, accounting for up to 50 to 60 percent of total export value.

“The country also faces other challenges that include poor public infrastructure, unreliable public utilities, low labour productivity, standards requirements, sanitary and phyto-sanitary measures and inadequate technological capacity to add value to its products.

“Malawi anticipates that these challenges will be addressed before full liberalisation,” said Kazembe.

In his remarks, EU Ambassador to Malawi Alexander Baum called for the need for more open debate on the country’s trade policy if the country is to forge ahead.

He observed that debate on EPAs has been emotional, calling for a need for a more sober debate in as far as EPAs are concerned.

EPAs are a scheme to create a free trade area (FTA) between the European Union and the group of Africa, Caribbean and Pacific (ACP) countries like Malawi. The trade agreement is a response to continuing criticism that the non-reciprocal and discriminating preferential trade agreement offered by the EU are incompatible with the World Trade Organisation (WTO) rules.

EPAs are seen as key to boosting economic and trade cooperation as set out in the ACP-EC Cotonou Partnership Agreement, and aim at fostering the smooth and gradual integration of ACP States into the global economy.

Currently, 27 out of 78 ACP countries have signed the EPAs.

Despite mounting pressure from private sector players, President Bingu wa Mutharika has on a number of occasions made it clear that Malawi will not sign the EPAs until the country improves its manufacturing base to compete on an equal footing.

Malawi also needs some constraints addressed including increased public investment in research and development, rural infrastructure such as roads, health and education facilities.