Global Policy Forum

By Rosalia Omungo

While east Africans still hold reservations about the benefits of the economic partnership agreement (EPA) currently being negotiated with the European Union (EU), both government and civil society representatives seem to be accepting that it is the best option available. Miriam Omolo, trade programme officer of the non-governmental Institute of Economic Affairs in Kenya, told IPS that the EPA may not be the ultimate vehicle to economic independence. There is a degree of scepticism about the agreement. ‘‘How guaranteed are we to be developed, even with the EPAs? A foreigner cannot develop you,'' she pointed out. ‘‘Right now we are locked in primary production. EPAs should encourage us to add value to our products, for example coffee. We should find efficient ways to move into value addition. We should be moving our products up the global value chain.'' A significant challenge to exporting value-added products is tariff peaks, which refer to the escalation in EU tariffs on value-added goods from outside its borders. ‘‘It is like you are being locked up,'' said Omolo.

But, on the other hand, Omolo notes that EPAs may encourage healthy competition in some sectors, such as sugar (despite EU tariffs only being phased out over a transitional period). ‘‘We are still complaining about the cost of telecommunications. But look at what competition has done for this sector. There was a time when you could not buy a cell phone. Now, for as little as 2,500 Kenyan shillings (2,8 euros) you can own one. Competition is good--it just needs to be managed,'' said Omolo. Omolo termed EPAs on the whole as agreements that embrace development. She is optimistic that infrastructure and production capacities in Kenya will improve as market access to the EU increases.

In August, heads of states of the East African Community (EAC) agreed that all five members will collectively sign one EPA with the EU by the end-of-year deadline. This averted a looming regional crisis as Uganda and Tanzania were accusing Kenya of wanting to negotiate the EPA through the Eastern and Southern Africa bloc, which represents countries in the Common Market of Eastern and Southern Africa (COMESA). Tanzania does not belong to COMESA. This situation was created by what some regard as the arbitrary divisions of African countries into trading blocs in the EPA negotiations. In some cases, these blocs do not correspond with existing regional configurations. Kenya committed itself to signing the EPA through the EAC bloc but, as chair of COMESA, wishes to remain involved in the ESA negotiations insofar as it does not compromise its EAC commitments.

EU trade commissioner Peter Mandelson has expressed concerns about the progress made with the EPA negotiations in east Africa. The Kenyan government has since reiterated that it is committed to concluding the negotiations with the EU. The permanent secretary in the ministry of trade and industry, David Nalo, said that the talks are at an advanced stage. ‘‘In view of the critical level the negotiations have reached, and in light of the complex issues involved, I urge all stakeholders to remain on course until we steer the process to a successful conclusion,'' said Nalo while addressing a regional workshop in Naivasha, Kenya, on the trade and economic implications of the EPAs two weeks ago. An EPA will serve to sustain current market preferences and avoid macro-economic instability and disruption of economic activities. This is especially true in the agricultural sector, whose growth has come from EU market preferences over 25 years, he said. The Kenyan government's commitment to negotiating the trade arrangement with the EU is founded on informed analysis that the EPAs provide a better trading arrangement than the Lome convention, which held sway from the 1970s to 2000, according to Nalo. The EPAs are designed to deliver on the development agenda for Kenya, as well as for the east and southern African (ESA) region.

Nalo is also convinced that the EPAs will enhance the competitiveness of the ESA region's export sectors. However, COMESA secretary general Erastus Mwencha cautioned earlier this month that the focus of the east African region is not so much on Europe. ‘‘Even if we have duty-free, quota-free access to Europe, it may not be easy to export except where we have a strong niche.'' Alternatively, COMESA countries have to be able to ‘‘out-compete'' other producers from outside Europe, for example Asia, South America and Eastern Europe. ‘‘Kenya's number one destination is COMESA. Our focus should be to develop the regional market because that is the future. That is where we can have sustainable growth,'' Mwencha argued. He stressed the importance of the EPA delivering on both the promises of development and regional integration.