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

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

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

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

Until now only objectives EU confirms to continue its financial

contribution to: › 10th European Development Fund › Aid for Trade

No new specific commitments under FEPA› Development cooperation will be further

considered in the next phase of negotiations

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 should be caught by binding development support

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 time limitations and cumbersome procedures

The use of subsidies should be confined

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 know-how 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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