EAC yet to start talks on trade agreement

By Benson Kathuri

East African Community (EAC) partner states are yet to start negotiations on trade in services with the European Union (EU), four months to the deadline set to sign a final trade agreement.

Under the ongoing Economic Partnership Agreements (EPAs) negotiations between the EU and the African, Caribbean and Pacific (ACP) countries, the two parties are expected to agree on how to trade in services by the end of July.

An agreement on trade in services would allow professionals from the EU to come freely into the region and offer services. Local experts would also be accorded similar treatment in the world’s largest trade block.

EAC partner states signed an interim EPA in December 2007 for locally produced goods to continue accessing the EU market duty. Photo: File

EAC partner states signed an interim EPA in December 2007 that provided the chance for locally produced goods to continue accessing the EU market duty and quota free. Trade in services was not included in the interim arrangement.

However, trade in services negotiations have not started though time is running out for the region that is yet to complete its own negotiations on free movement of people within the proposed common market that becomes effective next year.

Sources disclosed that a section of the stakeholders are opposed to the negotiations in trade in services that would put local professions into direct competition with their colleagues from the EU.

Services now constitute more than 50 per cent of the GDP in most African countries and have been the fastest expanding sector especially in ICT, communications and transport services.

Sensitive sectors

"The private sector in the EAC has never had the opportunity to come up with a harmonised position in relation to trade in services," says Charles Mbogori, the executive director of the Arusha-based East African Business Council (EABC).

"There is need for a regionally agreed sector prioritisation at a regional level, including agreement on sensitive sectors."

Mbogori said it would make more sense to first negotiate at home and reach a consensus on the regional level before negotiating with the third party.

The partner states: Kenya, Uganda, Tanzania, Rwanda and Burundi, are yet to agree on free movement of persons that would allow movement of professionals in those countries.

Only Kenya and Rwanda have allowed their nationals to move freely to their respectively countries to work or do business.

When EAC tried to jumpstart the negotiations in August last year, the negotiators realised that they lacked vital information on sectors likely to be affected should they open up the market to the EU experts.

They instead appointed some consultants to undertake a study to identify information gap that needed to be filled before the negotiators can present their requests and offers to the EU negotiators in Brussels, Belgium.

Free movement

"They (consultants) were of the view that there is not only inadequate information on legal and regulatory frameworks in the region in respect of services but also that liberalisation on services has taken place without sufficient legal and regulatory frameworks," said Gerald Ajumbo, principal trade officer, Directorate of Trade, EAC secretariat.

Considering that trade in services and especially under mode four that allow free movement of service providers has been controversial at the World Trade Organisation (WTO), the private sector cannot afford to leave the negotiation process to the EAC secretariat alone.

"Since the negotiations are being undertaken for and on behalf of the private sector, their interests must be fully taken on board and we must be involved in every stage of the negotiations," says Mbogori.

The WTO services sectoral classifications list contains more than 400 sectors and sub-sectors that would be subject for negotiations under EPAs though they are still being negotiated globally at the WTO Doha Round of talks.

These include professional services like legal, accounting, auditing and bookkeeping services, taxation, engineering, medial and dental services and urban planning and landscape architectural services.

Others are consultancy and related services like installation of computer software, data processing services and data base services.