The East African Community will resume talks with the European Union in two weeks to negotiate a trade deal, ahead of a meeting later this year.

EAC Secretary General Richard Sezibera said senior officials will prepare their part of the Economic Partnership Agreements (EPAs) negotiations at the end of the month.

Policy makers and businesses are growing impatient over the delay in concluding talks on trade pacts between Europe and East Africa that were started five years ago.

Last December, the EAC secured a two-year extension from the European Parliament in which to finalise the trade talks, pushing the January 2014 deadline to January 2016.

READ: EAC secures extension on EU trade talks

The request for an extension was made by the African Union. The EU had threatened to deny preferential market access terms to countries that had not signed full Economic Partnership Agreements (EPAs) by January 2014.

EPAs were set up to create a free trade area between the EU and the African Caribbean and Pacific Group of States and were supposed to take effect in 2008, but the negotiations are not yet complete.

Europe’s bid to insulate itself against emerging economies like India and China has been cited as the biggest point frustrating the negotiations.

Negotiators said the delay in concluding the talks has been caused by a dispute over a clause on export tax and the inclusion of a most favoured nation (MFN) clause.

An MFN clause, if included in an EPA, would require the East African Community to extend to the EU the same preferences it grants to third parties under future trade agreements.

If signed, the MFN will prevent all the signatories from entering into bilateral talks with other partners in areas where the EU does not enjoy preferential terms.

Dr Sezibera told the East African Legislative Assembly (Eala) two weeks ago that the list accepted by the EU includes almost all food and agricultural produce, and that the EPA is not expected to destabilise the sector.

Eala cautioned the EAC negotiators to be extra careful when negotiating the MFN clause.

“Negotiators should and must have policy space and flexibility on issues of export taxes and the MFN clause amongst others, in order to allow for value addition and to enhance industrial development,” Eala said in a report by the Committee of Communications, Trade and Investment on the consultative workshop between Eala, Civil Society and the Private Sector on EPAs adopted by the assembly two weeks ago.

The five EAC members signed an interim trade deal with Europe in 2007 to guarantee continued duty-free and quota-free access to the EU market following the expiry of the non-reciprocal trading arrangement based on a World Trade Organisation (WTO) waiver granted in 2001.

There had been proposals that Kenya should go it alone in signing the EPAs so that it could retain its preferences in flowers and fish.

This option had been seen as not viable for the EAC Customs Union because Tanzania, Uganda, Burundi and Rwanda could have refused to open up their markets to Kenya.

The EAC Customs Union Management Act provides that partner states have to enter into such agreements as a bloc.

“Various areas in the agreement have been virtually completed. These include trade in goods, fisheries, customs and trade facilitation as well as sanitary and phytosanitary and technical barriers to trade,” said the Eala report.

“The negotiations between EAC and EU on the EPA Rules of Origin are about 90 per cent complete, while in agriculture the outstanding work relates to domestic support and export subsidy,” the report stated.

Eala wants a number of areas under the Rules of Origin, institutional agreements, dispute settlements, final provisions and market access looked into.

The concerns raised in the negotiations include revenue loss to governments, although there is still a window of potential for the EAC to offset this especially if the bloc exploits new market opportunities that have been realised under the EPAs.

READ: EAC, Europe trade talks delay could hurt businesses

“We must be very cautious and focused. We should be looking at areas where we have comparative advantage so that we compete favourably on the world market — calling for investments in natural resources,” said Shem Bageine who heads the EAC Council of Ministers.