EU initials trade deal with East African nations
Updated: 2007-11-28 10:34
BRUSSELS -- The European Commission on Tuesday initialled an interim trade accord with five east African nations that will replace preferential tariff agreements due to expire this year.
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Under the accord, East African Community (EAC) states Burundi, Kenya, Rwanda, Tanzania and Uganda will enjoy duty-free, quota-free access to the EU for all products -- except sugar and rice -- from January 1.
A deal on services and investments, not covered in the interim agreement, will be negotiated next year.
"This is good news for the countries of the East African Community," said EU Trade Commissioner Peter Mandelson in a statement.
"It will prevent trade disruption and allow the EU to open its markets fully to EAC exports ... safe from WTO challenge."
The current trade deals giving preferential market access to the African nations have to be replaced by the end of the year because the World Trade Organisation (WTO) has ruled they are illegal.
"We needed to make sure that our special trading relationship was compatible with international trade rules so that other countries in the WTO could not challenge it," said Vincent de Visscher, the EU head of delegation in Uganda.
The deal covers mainly "industrial inputs and capital goods," but guarantees simplification of rules of origin for apparel products.
"Clothing companies established in the EAC will be able to source fabrics from all over the world and export their products to the EU free of duties and with no quota restrictions," according to the EU statement.
The EU had warned of imposing tariffs on goods from Africa, Caribbean and Pacific (ACP) nations if there were no agreement by December 31, raising fears of widespread losses and a collapse of local sectors.
The east African trade deal will in particular aid Kenya's cut flowers industry, Tanzania's fisheries and the coffee and tea trade in all five nations.
In exchange the African countries have agreed to open up 80 percent of their market to European products, a European Commission spokesman said.
The accord specifies that the EAC will gradually open its markets for EU goods over a period of 25 years. After 15 years, 80 percent of exports from the EU will enter the bloc free of duties.
The initialling of the deal is a technical step, signifying that the two parties agree to the contents of the text.
Normally it would have to be formally signed by all 27 EU member states before coming into effect, but due to the urgency, the measures will be applied from January under a special procedure.
The EU is pushing economic partnership agreements (EPA) with 78 nations in the African, Caribbean and Pacific group in a bid to clinch deals that replace the preferential accords.
The new deal is designed to help EAC countries develop while diversifying their economies and meeting WTO requirements that they allow some access to European goods and services, regional officials say.
Last Friday, the EU and four southern African states initialled a similar interim EPA aimed at liberalising trade ties.
That deal covers Botswana, Lesotho, Swaziland and Mozambique, with Namibia and South Africa to decide soon whether to add their names to the agreement.
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