PUBLISHED ON September 22nd, 2014

East Africa told to be wary of bad trade agreements

The East African Community partner states should choose who to trade with and shun ‘bad’ trade agreements in order to maximise benefits from inter-regional trade, Arancha Gonzalez, the executive director of International Trade Centre (ITC), has said.

Gonzalez was responding to a question posed during a media conference at the closure of the World Export Development Forum (WEDF) in Kigali on Wednesday.

During the three-day event that took place in Africa for the first time, a pledge was made by participants from 73 countries to work towards facilitating local small and medium enterprises (SMEs) to internationalise their operations through, among others, removing nontariff barriers, improving standards as well as building attractive brands.

However, it was observed that there’s a tendency to patronise African countries when they attempt to trade with economically more advanced regions such as Europe, especially during the process of negotiating trade agreements.

An ongoing example is the Economic Partnership Agreement between EAC and Europe, whose conclusion has failed because of what experts say are contentious clauses that don’t favour EAC partners.

Observers have noted that Europe’s failure to compromise or strike out the undesirable clauses is like holding the region at ‘gunpoint.’

However, Francis Gatare, the chief executive of the Rwanda Development Board (RDB), differed, saying, “there are no gunpoint agreements.”

Gatare, who was on the same media briefing, added that rather than rush to do business with Europe, there are unexploited opportunities closer to home.

“Agreements are signed between two parties and I don’t think East Africa is at gunpoint to sign any of them. The focus we have heard at this forum should be to promote intra-Africa trade before looking further from home,” Gatare said.

Gatare and Gonzalez concurred that what Africa needs to do is to clear non-tariff barriers that currently impede smooth trade on the continent.

“There are currently more barriers stopping African countries from trading among themselves than with Europe or Asia,” Gonzalez added.

Claver Ndayiragije, Burundi’s permanent representative to the United Nations, said trade barriers are a major challenge that African governments must address if they are to promote SME growth.

“This calls for more government de-regulation, we must work towards removing or reducing the red tape that currently impede trade amongst ourselves in order to encourage seamless trade,” Ndayiragije said.

According to Dr Abdulla Saadala, acting chair of the EAC Council of Ministers, intra-regional trading within the East African Community has grown from $2 billion in 2005 to $5.5 billion in 2013.

This has been directly linked to the implementation of the Customs Union Protocol.

Rwanda’s new WEDF record:

It was also announced on Wednesday that Rwanda set a new record for attracting the largest number of participants at the World Export Development Forum, with at least 1,200 participants from 73 countries in Asia, Africa, Europe and South America attending the event that was taking place in Africa for the first time.

Last year, the WEDF was hosted in Jakarta, Indonesia, and the turn-up was recorded at around 500 participants, but the highest attendance stood at 700 before WEDF Kigali.

“ITC had no fears in coming to Rwanda, we had no fears in coming to Africa and our confidence in both country and continent has been validated because we have over-achieved,” Gonzalez told The New Times.

RDB’s Gatare said the impact of Rwanda’s honour to be the first African country to host the event will be felt for years to come as it will become a point of reference for the pledges that have been made in Kigali to improve global trade through developing small scale enterprises.

“As a country, we have had the opportunity to showcase what the new Rwanda has to offer and I believe delegates have also seen for themselves the transformation that the country has undergone,” Gatare said.

Because of the record turn-up, Gatare revealed that some 200 local participants had to be left out as space for just about 300 of the over 500 local applicants was available.

“The next WEDF will be hosted by Doha, Qatar, and I hope they can meet the high standards that have been set by Rwanda,” the ITC chief said.

During three days of deliberations, over 600 business to business meetings were held with hundreds of letters of intent to do business, reportedly worth more than $5 million, signed.

Gonzalez said ITC, through WEDF, provides an opportunity for business community to express their problems and that in Kigali, challenges that continue to dog smooth trade had been noted and will be forwarded to policy makers of relevant national and international bodies to find solutions.

“We came here to talk trade and do business and we have just done that. Between now and the next WEDF, we shall be working to find solutions for the challenges raised here,” she pledged.

The event attracted high-profile speakers, including Ethiopia’s First Lady Roman Tesfaye Abneh, who was the guest speaker on the subject, “Empowered women powering trade.”

Source URL: The New Times

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.