EU Signs Trade Agreement With Eastern And Southern Africa Countries

by Lorys Charalambous, Tax-News.com, Cyprus

03 September 2009

The European Union on August 29 signed an interim Economic Partnership Agreement (EPA) with countries from the Eastern and Southern Africa (ESA) regional grouping.

The EPA was signed in Mauritius, by EU Trade Commissioner, Catherine Ashton, and Swedish Deputy Trade Minister, Gunnar Wieslander, on behalf of the EU.

The countries in the ESA that have currently signed up to the agreement are Mauritius, the Seychelles, Zimbabwe and Madagascar. Zambia and Comoros have said that they will sign the EPA at some point in the future.

The EPA offers the ESA countries that have signed the agreement immediate and full access to EU markets (with transition periods for rice and sugar), together with improved rules of origin. The ESA countries, in turn, will open their markets gradually over the next 15 years, with a number of important exceptions reflecting their development needs.

Other ESA regional countries, such as Djibouti, Ethiopia, Eritrea, Malawi and Sudan are involved in the ongoing negotiations for the more comprehensive regional agreement, and may join the EPA later.

As ‘Least Developed Countries’, they have duty free access to EU markets under the EU ‘Everything But Arms’ trade arrangement. As such, they do not need to submit a market access offer to sign the agreement, and benefit from its development cooperation and fisheries provisions while negotiations towards the more comprehensive deal continue.

Commissioner Ashton met with ministers from a wider group of ESA states to discuss elements of this comprehensive trade partnership, which would cover issues like services, investment, agriculture, technical standards, trade facilitation and trade-related rules. Discussions covered key issues such as protection for infant industries and export duties and both sides agreed to press forward with negotiations without delay.

Under the terms of the EPA, all imports from the signatories to the interim agreement have benefited from duty and quota free access to the EU since 1 January 2008 (with short transition periods for rice and sugar).

These countries will now liberalise their markets to EU imports over the next 15 years, gradually removing tariffs on between 80% and 98% of imports from the EU, depending on the country. Among the products excluded from liberalisation are sensitive agricultural and manufactured products such as milk, meat, vegetables, textiles, footwear and clothing.

“We now have the foundation to build a more comprehensive trade partnership that will support the ESA region’s work to build diverse and sustainable economies,” observed Commissioner Ashton. “This agreement brings a diverse region together under a single trade arrangement with the EU, tailored to the specific needs of the region and recognising its diversity."

Sindiso Ngwenya, Common Market for Eastern and Southern Africa (COMESA) Secretary-General added that: “The challenge we face between now and the signing of the full EPA is to introduce the economic component, through improved market access, development and deeper regional integration and to make EPAs a true partnership.”

In 2008, total EU imports from the ESA group were approximately EUR3.2bn (USD4.5bn), or 0.2% of all EU imports, comprising mainly of textiles and clothing, sugar, fish products and copper. Last year, EU exports to the ESA Group consisted mostly of mechanical and electrical machinery and vehicles, totalling EUR4.3bn.

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