KIGALI - A British international organisation has warned that the recent free trade agreement between the East African Community (EAC) and the European Union (EU) could result in unemployment and loss of revenue for countries in the African economic bloc.
Oxfam International urged in a statement sent to The New Times yesterday that other developing countries should ‘take heed of the range of voices raised against these deals and continue to ask the (European) Commission for more time to negotiate a pro-development deal, and for feasible alternatives to be considered.’
Luis Morago, Head of Oxfam International’s EU Office said in the statement: ‘Developing countries have been placed under enormous pressure to sign. Despite concerns raised by many, including the IMF, African civil society, trade unions, and academics, the Commission has ignored possible alternatives and insisted on the deadline.
‘They have essentially forced the East Africans to choose between guaranteeing markets for their agricultural exports today, and maintaining a degree of protection to promote future industrial growth - which all developed countries have done in the past.’
He said that the deal signed in Kampala, Uganda on Tuesday will oblige the ‘East African region to remove 80% of its tariffs on EU goods over 15 years, possibly more quickly, which could lead to unemployment and loss of vital government revenue that might otherwise be spent on health and education.’
‘It suits the Commission to spread the impression that regions are falling into line and the rest should do so too. But we would urge other countries to take heed of the range of voices raised against these deals and continue to ask the Commission for more time to negotiate a pro-development deal, and for feasible alternatives to be considered,’ he was quoted as saying.
The Goods-only trade agreement covers mainly industrial inputs and capital goods.
About one fifth of EAC trade will be completely excluded from any market liberalisation
The deal is seen as an interim step towards agreeing a full Economic Partnership Agreement (EPA) by mid-2009.
The EAC signed the agreement with the EAC to proceed with negotiations on EPAs beyond the initial deadline on December 31. A number of international and national groups have discouraged a rushed signed on the EPAs.
State Minister for Industry and Investment Promotion Vincent Karega represented Rwanda at the ceremony. The other EAC member states are Burundi, Kenya, Tanzania and Uganda.
There are worries that waiving tariffs on imports from EU would seriously hurt the already struggling economies of developing countries, adding to the already existing unfairness on the world market due to the highly subsidised western products.