Wednesday, 28 November 2007

EU: Far-reaching trade deal with East Africa

On 27 November in Kampala, the East African Community (EAC) initialled a goods-only trade agreement with the European Union (EU). According to a joint statement, the EAC will open their markets to 80% of EU goods within 15 years. This covers mainly industrial inputs and capital goods. About one fifth of EAC trade will be completely excluded from any market liberalisation requirements. The deal is seen as an interim step towards agreeing a full Economic Partnership Agreement by mid-2009. Luis Morago, Head of Oxfam International's EU Office stressed the developing countries “have been placed under enormous pressure to sign. Despite concerns raised by many, including the IMF, African civil society, trade unions, and academics, the Commission has ignored possible alternatives and insisted on the deadline. They have essentially forced the East Africans to choose between guaranteeing markets for their agricultural exports today, and maintaining a degree of protection to promote future industrial growth - which all developed countries have done in the past.”

This agreement could lead to unemployment and loss of vital government revenue that might otherwise be spent on health and education. It suits the Commission to spread the impression that regions are falling into line and the rest should do so too. But NGOs urge other countries to take heed of the range of voices raised against these deals and continue to ask the Commission for more time to negotiate a pro-development deal and for feasible alternatives to be considered.

Meanwhile, Peter Mandelson, the European commissioner for trade, strongly criticised the positions taken by Nigeria and South Africa in the EPA talks. Speaking to MEPs last week, Mandelson alleged that the big countries are holding back their neighbours in the regional groupings involved in the talks from signing deals by an end-of-year deadline set by the EU. His comments were sharply criticised by anti-poverty campaigners, who alleged that he is seeking to sow divisions among developing countries.

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