Renewed scramble for markets

To an ordinary Ugandan the Economic Partnership Agreements EPA are a distant discussion but their implication will not take long to be felt, Jane S. Nalunga Country director of SEATINI-U examines what the EPA is all about.

The European Union (EU) and Africa, Caribbean and Pacific (ACP) countries have been negotiating reciprocal trade arrangements popularly known as EPAs since September 2002. The negotiations were slated to be completed by December 2007 and the new arrangements to come into effect on 1st January 2008. Due to the complexity of these negotiations, a comprehensive agreement has so far not been concluded, although some countries have initiated an interim agreement.

Basket weaving - Ongura Womens Group in Lira, northern Uganda

EPA is about liberalisation
Since 1975, the cooperation between the ACP countries and the EU has been governed by the Lome Conventions. It granted the EU a preferential trade regime with ACP countries through trade preferences, commodity protocols, and other instruments of trade cooperation i.e financial and technical aid.

However ACP countries did not benefit from the trade preferences since ACP exports to the EU declined from 8% in 1975 to 2.8% in 2000. This was mainly as a result of both internal supply capacity constraints i.e infrastructure and market entry barriers such as demandingly high standards in the EU. The preferences accorded to the ACP countries were incompatible with WTO rules which are against discrimination among member states. By giving preferences to its former colonies, the EU was discriminating against other WTO members. Therefore new WTO compatible trading arrangements had to be negotiated. The EPA negotiations can also be viewed against the background of a renewed scramble for markets among developed countries especially the EU and US as evidenced by the proliferation of Free trade Agreements (FTAs)1 of which the EPA negotiations are a part.

The underlying principle of the EPAs is the liberalisation of the economy through the reduction or elimination of tariffs. Under the interim agreement, Uganda together with other East Africa Community countries has agreed to eliminate tariffs on 82% of its imports from the EU by 2033. The extensive liberalisation will have an adverse impact on both the agricultural and industrial sector as subsidised and efficiently produced goods from the EU will displace locally produced and manufactured goods,leading to increased unemployment and poverty.

The EAC has also committed itself to negotiate a number of wide ranging and contentious areas like, competition policy, transparency in government procurement and investment amongst others, which will limit governments’ policy space to realise development strategies.

Way forward
The comprehensive EPA is expected to be concluded by 31st July 2009. At the national level the structures for stakeholder involvement in the negotiations are available under the National Development and Trade Policy Forum in the Ministry of Tourism Trade and Industry. The Forum is a multisectoral body which is responsible for formulating the national position in these negotiations. There is an urgent need for stakeholders to effectively participate in these negotiations to ensure that the outcomes promote poverty eradication and sustainable development.

The European Union (EU) and Africa, Caribbean and Pacific (ACP) countries have been negotiating reciprocal trade arrangements popularly known as EPAs since September 2002. The negotiations were slated to be completed by December 2007 and the new arrangements to come into effect on 1st January 2008. Due to the complexity of these negotiations, a comprehensive agreement has so far not been concluded, although some countries have initiated an interim agreement.

EPA is about liberalisation
Since 1975, the cooperation between the ACP countries and the EU has been governed by the Lome Conventions. It granted the EU a preferential trade regime with ACP countries through trade preferences, commodity protocols, and other instruments of trade cooperation i.e financial and technical aid.

However ACP countries did not benefit from the trade preferences since ACP exports to the EU declined from 8% in 1975 to 2.8% in 2000. This was mainly as a result of both internal supply capacity constraints i.e infrastructure and market entry barriers such as demandingly high standards in the EU. The preferences accorded to the ACP countries were incompatible with WTO rules which are against discrimination among member states. By giving preferences to its former colonies, the EU was discriminating against other WTO members. Therefore new WTO compatible trading arrangements had to be negotiated. The EPA negotiations can also be viewed against the background of a renewed scramble for markets among developed countries especially the EU and US as evidenced by the proliferation of Free trade Agreements (FTAs)1 of which the EPA negotiations are a part.

The underlying principle of the EPAs is the liberalisation of the economy through the reduction or elimination of tariffs. Under the interim agreement, Uganda together with other East Africa Community countries has agreed to eliminate tariffs on 82% of its imports from the EU by 2033. The extensive liberalisation will have an adverse impact on both the agricultural and industrial sector as subsidised and efficiently produced goods from the EU will displace locally produced and manufactured goods,leading to increased unemployment and poverty.

The EAC has also committed itself to negotiate a number of wide ranging and contentious areas like, competition policy, transparency in government procurement and investment amongst others, which will limit governments’ policy space to realise development strategies.

Way forward
The comprehensive EPA is expected to be concluded by 31st July 2009. At the national level the structures for stakeholder involvement in the negotiations are available under the National Development and Trade Policy Forum in the Ministry of Tourism Trade and Industry. The Forum is a multisectoral body which is responsible for formulating the national position in these negotiations. There is an urgent need for stakeholders to effectively participate in these negotiations to ensure that the outcomes promote poverty eradication and sustainable development.

Jane Nalunga is Country Director of SEATINI Uganda
Email: seatini@infocom.co.ug