Transcript Towards Equitable Agricultural Development in the EAC: An

An Analysis of the EPA
between the EU and the EAC

Agriculture Related Provisions in the Framework EPA

Potential for Equitable Agriculture Development in the
Framework EPA
› Investment for increased productivity
› Reform of international and regional disciplines in
agriculture
› Redressing agriculture related trade constraints
› Capacity building of small and medium sized farmers
› Multi-stakeholder consultation and coordination

Concluding Remarks and Way Forward

Chapter I - General Provisions

Chapter II - Trade Regime for Goods

Chapter III - Fisheries

Chapter IV - Economic and Development Cooperation

Chapter V - Areas of Future Negotiations
›

Including Special Chapter on Agriculture
Chapter VI - Dispute Avoidance and Settlement, Institutional, General and Final
Provisions

Protocol I - Concerning the Definition of the Concept of Originating Products and
Methods of Administrative Cooperation

Protocol II - On Mutual Administrative Assistance in Customs Matters

The FEPA provides for duty free and quota free (DFQF) market
access for all EAC exports to EU with special safeguard provisions for
sugar until 2015

The EAC will liberalise 82 percent of EU imports over a period of 25
years
Phase of liberalisaion
Percentage of total trade
liberalisation
Goods liberalised
2008 – 2010
64 %
Raw materials and capital
goods (CET 0%)
2015 – 2023
16 %
Intermediate goods used in
the production process (CET
10%)
2020 – 2011
2%
Finished goods (CET 25%)
Total liberalisation
82 %
Excluded from liberalisation
18 %
Mostly agricultural products
but also some industrial goods
Possibility of cumulation in the area of Rules of Origin
Moving up the value chain and diversifying the
production base by engaging in processing of goods
Cumulation with products from Algeria, Egypt, Libya,
Morocco and Tunisia possible (neighbouring developing
countries belonging to a coherent geographical entity)
RESTRICTIONS
No cumulation with ACP Countries who have not initialled
EPA negotiations
No cumulation with regard to certain products from South
Africa
Revision and loosening of restrictions is necessary
Export Taxes are prohibited under
the FEPA
EXCEPTIONS
foster development of domestic
industry
maintain currency value stability
Process to use exceptions is time consuming and deprives the
exceptions of their rapid reaction character
EAC proposal: allow the imposition of temporary
export duties or taxes and ONLY notify the EU party
Eliminate use of export taxes through binding
commitments of EU to replace revenue loss with foreign
aid / FDI or with scientific / technical assistance


The imposition of non-tariff
measures is prohibited
› Quotas
› Export or import licenses
Exceptions
› Measures are applied to
prevent or relieve critical
shortages of food
› Restrictions are necessary to
the application of standards
or regulations in international
trade
• Ensuring
transparency in
accessing the EU
market
• Increased access for
EAC agricultural
products in the EU
market
BUT
It is also necessary to
train and assist SMFs
so as to enable them
to comply with
standards and
regulations

The EPA allows for multilateral and bilateral
safeguards, and includes special provisions for
infant industries ...
....BUT
›
burdensome procedures
›
time limit after which clear elements are required
leading to the elimination of the measure
›
no special safeguards for agriculture
› only temporary distortions are addressed whereas distortions in
agricultural trade are rather of structural nature
EAC has drafted a Text on Agriculture (2009) and a Text on
Economic and Development Cooperation (2011)
Areas of development cooperation of both texts need to be
harmonised
 Chapter on development cooperation should allow for the retention
of mechanisms favourable to development and exclude mechanisms
hindering development
Revenue
loss due to binding
liberalisation shouldFund
be caught by
› 10th European
Development
binding development support
Until now only objectives
EU confirms to continue its financial
contribution to:
› Aid for Trade

No new specific commitments under
FEPA
› Development cooperation will be further
considered in the next phase of negotiations
DFQF Market Access
 Can create incentives for increased investment in the
agricultural sector leading to:
›
›
›
›
Improved productivity
Diversification
Import of capital goods
Spill-over of technology
Main target of
investment should be
small and medium
sized farmers
Rules of Origin
 simplified rules of origin provide more certainty
 Possibility of cumulation provides for value addition and
diversification and can increase export activity in agricultural
products


Chapter on Agriculture has to include provisions on
›
promotion of joint ventures and mixed investments in general
›
facilitation of access to credit facilities for small and medium sized
farmers
Chapter on Development Cooperation has to include
›
Binding commitments to achieve a better infrastructure and better
technological inputs
›
Binding commitments to compensate revenue loss as a result of
liberalisation through development support

Negotiating the FEPA as a bloc: strengthening regional
integration
›
creation of larger markets
›
generating small and medium sized farmers’ activity
›
Improved food security by allowing the movement of goods from surplus
to deficit areas within and outside the EAC

Safeguards address the essential issues but fail to be effective due to

The use of subsidies should be confined
time limitations and cumbersome procedures

Need for a specific development fund under FEPA aimed
at:
› Improving customs administration,
› building better infrastructure networks,
› capacity building of small farmers,
› harmonisation of the regulatory frameworks within the EAC
› etc.

Need for binding commitments aiming at improving the
agricultural private sector that go beyond traditional
technical assistance and include real transfer of knowhow and technology

the EPA fails to explicitly address:
›
Better access to production technologies, product
quality enhancements and direct linkages to the
market for SMFs
›
Better information of SMFs on how to use commercial,
technical, scientific and financial opportunities under
the EPA
As promoted in the Cotonou Agreement, some multi-stakeholder
consultations in EPA negotiations were conducted …
… BUT
›
no mechanism to ensure neither the taking into account of the
stakeholders’ views nor the information of stakeholders about
final outcomes
›
parliamentarians, consumer associations, trade unions, small
business, informal sector, and farmers are not always members
of these fora
›
multiplicity and sometimes ad-hoc nature of consultative
mechanisms hamper regular and effective participation

The East African Business Council (EABC)
›

smallholder farmers are not well represented thus they lack the ability to own
policy implementation let alone policy-making
The informal sector
›
›
should also be recognized as a stakeholder and its participation in
negotiations should be seized
Including the informal sector as a stakeholder in the EPA
negotiations would eventually
 transform informal activity to formal activity,
 increase government revenues
 enhancethe agricultural sector by making technology and finance
available for a greater number of beneficiaries.

National governments need to…
› provide stakeholders with information on how they can
›
›
›
›
effectively harness opportunities provided for under
the EPA
establish channels through which all stakeholders can
participate in consultations on the ongoing
negotiations and be informed about final outcomes
establish mechanisms which ensure that their views,
opinions and proposals are taken into account
harmonise regional and national strategies
allocate resources to sectors that are likely to benefit
most from the EPA
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