EAC States Puzzled Over EU Trade Deals

A controversy appears to be raging between Kenya and Tanzania over the approach to be adopted in negotiating the new trade arrangement that will govern the relationship between the EU and African Pacific and Caribbean (ACP) countries when the new World Trade Organisation regime takes effect.

Bernard Membe, Tanzania's Minister for Foreign and International Affairs, reportedly told the press last week that EAC member states have agreed to negotiate an EPA collectively, building on what has already been achieved under ESA and SADC.

This would represent a parting of the ways with ESA - which is de facto the Common Market for Eastern and Southern Africa (COMESA), including all the 16 COMESA member states - which suits Tanzania, the only EAC member that also belongs to SADC. Tanzania pulled out from COMESA in 2000, and so feels that to enter into an EPA as part of ESA would effectively "force" it to rejoin COMESA.

Tanzania argues that with the recent accession of Rwanda and Burundi to the EAC, the Community is now big enough to engage the EU in negotiations, and that the EU should treat the Community just like it treats the South African Customs Union (SACU), which also has five members - namely Botswana, Lesotho, Namibia, South Africa and Swaziland.

Tanzania also accused Kenya of sabotage, alleging that a Kenyan trade minister had "secretly written to the EU informing them that Kenya would negotiate EPA under ESA" thus compelling the EAC member states to negotiate as a bloc.

Kenya, Uganda, Rwanda and Burundi, all members of COMESA, have been negotiating EPAs with the EU collectively under ESA, while Tanzania has been negotiating under SADC - which however excludes South Africa, with which the EU is pursuing a separate EPA under the narrower SACU.

Mr Membe said, "the issue will be at the centre of discussions by EAC heads of state when they meet in Arusha on August 20".

The controversy began in 2003, when all the EAC members reneged on an agreement stipulating that matters relating to participation in the World Trade Organisation and ACP-EU arrangements would be negotiated as a bloc. This would have solved the problem of overlapping membership that continues to plague the trading blocs in the region.

It was not until April 13 this year that the Community announced that it intends to negotiate its own agreement with Europe as a separate regional bloc.

According to WTO rules, a country cannot be a member of more than one Customs Union.

To complicate matters, Kenya is the current chair of the COMESA trading bloc, while Tanzania fears that if the COMESA states are part of its EPA, its position and strategic interests will be undermined.

Meanwhile, The East African Business Council, the umbrella association of businesses in the region, has all along supported the view that the EAC should negotiate EPAs with the EU as one bloc to have homogeneity within the policies, procedures and mechanisms. He said such a scenario would positively affect the fundamental rules governing investment and regional co-operation.

Mr Mndeme-Yegella said that while it may be possible to align the COMESA common external tariff with that of the EAC, aligning it with SADC's is likely to be a major challenge.

The problem is compounded by the fact that COMESA and SADC will acquire Custom Union status at different times. This would be long after the conclusion of the EPAs deal.

Resource: www.allafrica.com
Released on: 14 August 2007