PUBLISHED ON February 9th, 2015

EAC in trade deal with European states

The East African Community is looking to expand the European market for its horticultural products through a new trade partnership with Norway, Switzerland, Liechtenstein and Iceland.

The four countries, which are not members of the European Union, will start comprehensive free trade agreement negotiations with the EAC partners under the European Free Trade Association (EFTA) umbrella. The EAC and EFTA secretariats have already drafted a trade declaration in order to kick-start the negotiation process.

It is expected that the negotiations will be finalised by the two parties within five years before 2021, when Kenya raises its status to a middle-income country.

According to Norway’s Ambassador to Kenya Victor Ronneberg, the main thing the EFTA countries are interested in is the agricultural sector.

The EAC partner states export horticultural and other products to the EU duty-free but pay duty when exporting similar goods to EFTA countries.

Mr Ronneberg said the EAC countries will also benefit from the advanced technology used in the oil industry in Norway, which is among the largest oil-producing countries in the world.

The country is also rich in fish produce and although some of the salmon found in East Africa is imported from Norway, it is in small quantities and a trade agreement will boost imports.

“Both parties (EAC and EFTA) will negotiate a trade deal along the lines of the Economic Partnership Agreement signed between the EU and the EAC,” said Mr Ronneberg, adding that this will enable them to negotiate faster as they will use the existing deal as a guide.

Under the EPA, the EAC has committed to liberalising 80 per cent of its market for EU imports. This category of products includes raw materials and capital goods (65.4 per cent), which already enjoy duty-free status, and large intermediate products (14.6 per cent), which attract a 10 per cent import duty.

Products in this category are considered important in promoting competitiveness in the agricultural and industrial sectors.

Main challenge

The main challenge that delayed the conclusion of the text on agriculture was the clause that relates to the EU’s Common Agricultural Policy (CAP) and its perceived implications for production and trade competitiveness.

Under the CAP, production and trade-distorting subsidy support is estimated to account for about 23 per cent of total payments made by the EU.

Andrew Luzze, East African Business Council executive director, said the region’s private sector should be fully involved in the negotiations to help speed up the negotiation process.

Negotiations for the Economic Partnership Agreements between the EAC and the EU started in 2007 with the initialling of the Framework EPA on November 27, 2007. However, the two blocs have failed to agree on a number of issues, occasioning postponement of the deadline several times.

Source: The East African

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