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Suspicion over new EAC trade deal with the US

Saturday August 09 2008
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The Kenya-Tanzania border at Namanga. The Trade and Investment Framework Agreement has been undergoing review within the co-ordinating organs of the partner states since 2006. Picture: Anthony Kamau

There are murmurs of discontent over the manner in which a trade and investment agreement between the East African Community and the United States was reached last month.

The six-article framework agreement — Trade and Investment Framework Agreement (TIFA) — was signed on July 16 in Washington DC to serve as the basis for a trade and investment treaty between the two partners.

But trade and development experts have questioned the EAC’s endorsement of this agreement, saying there was no systematic attempt to involve the public in formulating the agreement, and most importantly, to cater for the region’s interests.

Last week, a regional think tank, Southern and Eastern Africa Trade Information and Negotiations Institute (Seatini), convened a stakeholders meeting in Kampala at which the agreement was queried, just seven months after the region initialled another controversial trade pact — the Economic Partnership Agreement with the European Union.

Seatini country director Jane Nalunga however said the EU at least had the courtesy to engage EAC and six other regional blocs across Africa, the Caribbean and Pacific to reach a negotiated deal, unlike the US.

The agreement says the parties may only invite the region’s civil society at “an appropriate” time.

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“Who negotiated this agreement?” Ms Nalunga asked.

Officials from the EAC Affairs Ministry in Kampala say TIFA is a harmless document as it is only a framework agreement.

“It’s just a framework agreement to show intent,” said John Mugerwa, a senior official at the ministry.

“Don’t forget there is already a Comesa TIFA and it encompasses all EAC countries except Tanzania. So this was done to accommodate Dar.”

The TIFA, he said, has been undergoing review within the co-ordinating organs of the partner states since 2006. It came before the summit in May this year, which endorsed its signing last month.

Already, Rwanda has a bilateral trade and investment treaty with the US.

The agreement, signed by EAC Director General of Customs and Trade Peter Kiguta and US trade representative Susan Schwab, says the two parties, “affirm their desire to promote an attractive investment climate and to expand and diversify trade in products and services.”

It also adds that the input of the private sector and civil society will be sought “where appropriate” and in “an appropriate forum.”

A trade official of the EAC Secretariat, Gerald Ajumbo, conceded last week that the Secretariat “has not reached that level of sophistication where it can involve the public in negotiations” but added that the negotiations were undertaken by the partner states in the interest of their respective peoples.

Of concern is the continued liberalisation of the region’s economies, with virtually all sectors now in the hands of foreign interests.

In December last year, the EAC became the only regional economic bloc to initial an EPA with the EU, offering at least 82 per cent market access in a phased tariff reduction.

Several poor countries in other regions have remained aloof from the agreement, citing its negative impact effects on local industries and revenue sources.

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