In November, 2007, the East African Community (EAC) initialed an interim Economic Partnership Agreement (FEPA) with the European Commission (EC) with the main objective of maintaining trade between EAC and European Union.

The East African Community initially negotiated EPAs in two different configurations: ESA – EC EPA and SADC – EC EPA. The East African Business Council noted this and was instrumental in lobbying for all the five Partner States to negotiate the EPAs as one block.

This was also justified by taking into account that EPAs are to be signed by custom territories and EAC has a well developed Customs Union.  This endeavour led to the EAC Summit directing the Community to negotiate as a bloc August 2007 hence the birth of EAC-EC-EPA negotiations.

The negotiations were supposed to end in July, 2009, with a signing of a comprehensive EPA between the two parties. EAC and EC have in principle agreed to extend deadline for completing FEPA to complete pending work. EAC  will sign the FEPA as soon as they agree with the EC on the way forward regarding  contentious/outstanding issues (Most Favoured Nation Clause, development cooperation, Agricultures etc).

Opportunities & Risks for business

In the context of EPAs, the agriculture sector has great potential through the EPAs considering the export opportunities in non-traditional sectors such as horticulture, and fruits and vegetables. To achieve this, the aspects of negotiations in EPA relating structural distortions in agricultural markets such as subsidies need to be addressed.

Furthermore, the EAC has significant opportunities in the area of trade in services particularly on the supply of services through movement of natural persons (Mode 4) and in certain categories of service suppliers often referred to as semi or low-skilled workers.

Market access in Mode 4 is a priority of the African countries in the EPAs and EAC is negotiating with Europe in this sector. In principal, a bilateral negotiation is more conducive to finding the right balance between the market access drive of the EAC and the concerns of Europe as the destination country for temporary workers. The private sector can work in partnership with governments in this area by contributing to monitoring the temporary movement of persons from the process of recruitment to the return of workers.

The challenges of EPA negotiations relate to the lop-sided development level between EAC and EU. For EAC to rip the potential benefits of the EPAs, it is of paramount importance that development dimension of the negotiations is well addressed. The development dimension should be reflected in the rules themselves, level of commitments and supportive mechanisms to allow local business ingenuity and private initiative to grow and prosper.

Contribution by East African Business Council

On EPA Trade in Services, with assistance from International Lawyers and Economist Against Poverty (ILEAP), EABC is in the process of finalizing EPAs study on Trade in Services with the view of information gathering to cover what is on the ground on the EAC side and potentials from the EU which will feed into the EPA negotiations.

EABC is currently working with TradeCom to inform the EAC Private sector of the EPA negotiations in areas of interests to the region with the view of strengthening the capacity of the private sector to follow and contribute to defining negotiating positions which are expected to lead to regional economic development.