East Africa: Deadline for EAC-EU Trade Deal Missed Again

The East African Community (EAC) will miss the October 1 deadline for the completion of negotiations and eventual ratification of the all-important Economic Partnership Agreement (EPA) with the European Union, The Sunday Times has learned.
By mid last week, permanent secretaries from the five partner states were warming up for what was seen as the "final round of negotiations" on September 22-26, but by Friday, all had changed.
In Kigali, the Permanent Secretary Ministry of Trade and Industry, Emmanuel Hategeka and other colleagues were set to join their counterparts to face-off with the European Union in Nairobi.
"Hopefully, we can settle all the litigious clauses [and] conclude the negotiations and give way for the ratification process," Hategeka told The Sunday Times Thursday evening.
But the storyline changed at 8:26pm on Friday after a short email from the EAC Secretariat called off the week-long meetings.
"Dear Permanent/Principal Secretary, reference is made to the letter convening meetings on the EAC-EU EPA negotiations on 22nd - 26th September 2014 in Nairobi. Following the deliberations of the Coordination Committee on this issue during the ongoing 29th meeting of the Council, it has been decided that the above-mentioned meetings be rescheduled to the following week of September 29, 2014.
In this regard, the Secretariat is rescheduling the meetings from 2nd to 4th October 2014 in Nairobi," read the email.
That means that another deadline will be missed and with economic consequences to Kenya, especially, which stands to lose preferential treatment for its multi-million Euro horticulture products.
Kenya, unlike other EAC members, could lose most because while others can continue trading with Europe under the "Everything But Arms" trade arrangement meant for least developed countries, Kenya won't because it's regarded as a developing country.
For instance, Kenyan vegetables would be subjected to up to 30 percent duty, pineapples 22, tuna 20.5 and flowers 8.5 percent.
Moreover, Kenya can't sign a bilateral agreement with EU because it violets the EAC joint agreement protocol.
Long courtship
Europeans are aware that the EAC is a good market and the reverse is true for the later, but since 2010 parties have failed to agree on some clauses to strike a deal.
These negotiations started on November 27, 2007 with a framework agreement upon which negotiations would be based. The agreement is supposed to replace the Cotonou agreements signed in 2000 between the EU and 77 African, Caribbean and Pacific countries for 20 years.
Countries signed to the Cotonou agreement, including the current EAC member states, had a bilateral relationship with Europe.
However, by December 2007, a number of changes had taken place affecting many of the ACP members. Many of them had joined regional economic blocs such as the EAC which changed their relationship with Europe; hence the need for EPA.
For East Africa, actual negotiations started in June 2010 but four years down the road, there's still no deal.
In a recent interview, Trade Minister Francois Kanimba said that's not surprising.
"This is a multi-lateral agreement, the EAC is negotiating as a bloc of five states with the EU which is composed of 27 countries; the process is therefore bound to be complicated."
Given that background, the EU formulated a temporary Market Access Regulation 1528/2007 under which EAC would continue to enjoy preferential trade with Europe until the EPAs are concluded.
The expiry of the temporary arrangement has been set and postponed several times-the final one was October 1, but that too will be missed.
What happens next?
Observers note that Europe will certainly set a new deadline.
For Hategeka, the negotiations have come a long way and an agreement is a round the corner because the list of contentious clauses has reduced to just five. Moreover, the EAC has a common position to present to Europeans. Areas of disagreement relate to export taxes, domestic policy, good governance and consequences of the agreement on customs union.
It's not clear what exactly is wrong with these clauses, but those in the know say they "put EAC at a disadvantage."
Senator Jacqueline Muhongayire , the former Minister for EAC Affairs told The Sunday Times that partner states were doing the right thing not to rush into signing of an agreement with long term consequences.
Over five meetings have been held since January 2014 with little progress.
On January 30, ministers from the EAC partner states flew to Brussels to meet the European commissioner for trade, but consensus was not reached on taxes as well as the clause regarding rules of origin and agriculture.
On May 30, a meeting of the Sectoral Council on Trade, Industry, Finance and Investment took place in Arusha and directed the Secretariat to liaise with EU and organize a meeting of EAC-EU Senior Officials in July. That meeting took place on July 23 in Kigali.
No agreement
"In the course of the joint EAC-EU Senior Officials meeting, there was no agreement on the outstanding issues," says Richard Owora, EAC's head of corporate communication.
On September 9 - 10 the secretariat convened a Sectoral Council on Trade, Industry, Finance and Investment in Arusha, but Tanzania and Burundi did not attend saying it had been convened on short notice. Kenya, Rwanda and Uganda went ahead and met without the two and forwarded their notes to them.
Burundi concurred with what the trio had discussed but Tanzanians had reservations and requested to raise their concerns during 29th meeting that ended yesterday.
That position was expected to form the basis of the now rescheduled meetings with the EPA to nail a final deal.