State minister for industry and investment promotion, Vincent Karega has said government is positioning Rwanda to embrace free trade ahead of the signing of the final Economic Partnership Agreement (EPA) with the uropean Union (EU).
"We are now trying to industrialise our economy and develop trade by facilitating foreign investment, encouraging our business people to merge their businesses," Karega cited on Tuesday the move government is taking in a telephone interview.
He added: "We are (also) investing in education because we believe educated business people make better investors. They consider quality in their work. And to be able to compete favorably on the market, we are adding value to all our exports."
Fears have been expressed that signing the EPAs would stifle the growth of indigenous industries, thereby hurting the economies as more people would become jobless.
Karega instead said EPAs would foster economic growth in Rwanda.
"Although we have been criticised for signing the interim agreement under pressure, it is important to understand that with or without pressure, if our economies don’t grow, stronger economies of developed countries will takeover ours. That’s why it is important that we patterner with them to develop our economies. If we do not, our own economies will remain stagnant," he said.
East African Community (EAC) member states were forced to sign the agreement after the duty and quota free access to EU markets under the Cotonou Agreement lapsed on December, 31, 2007. The purpose of the Interim Framework Agreement was precisely to avoid trade disruptions over exports of the EAC partner states to the EU. The EU envisaged replacing expiring trade accords with EPA or temporary deals. But critics warned that agreements offer little safeguards for Africa’s poor agriculture sector and its related industries.
The EAC partner states, more or less export the same commodities whose preferential access to the EU markets has been safeguarded under the interim agreement. After signing, EAC Secretariat issued a strong statement defending the development, saying the interim agreement was entered with the express intention to protect all EAC exports, now and into the next decade and beyond. "Without the interim agreement, EAC exports would have ended in quotas and attracted high duties, making the exports uncompetitive," says the statement.
One of the most powerful drivers of economic growth is free trade and at present the World Trade Organisation (WTO) has taken lead in negotiating free trade to break down trade barriers within nations.
According to Karega, Rwanda is already trading freely with the rest of the world and is only now trying to fully maximize opportunities that come with free trade.
The country is receiving a variety of goods from all over the world.
Karega however hastened to say the trade will not stop Rwanda from aiding development of indiginous industries to manufacture their own goods for export and for the local market. "Although we don’t have so many industries, with free world trade we have a comparative advantage in tourism and production of raw materials such as hides and skin and fruits which can be exported to the world markets, "he said.