Towards Equitable Agricultural Development in the EAC:

1
Towards Equitable Agricultural Development in the
EAC
An Analysis of the EPA between the EU and the EAC

• Fostering Equitable Agricultural Development in
  Africa (FEAD) Project

2
Structure of the Presentation

• Agriculture Related Provisions in the Framework
  EPA
• Potential for Equitable Agriculture Development
  in the Framework EPA
• Investment for increased productivity
• Reform of international and regional disciplines
  in agriculture
• Redressing agriculture related trade constraints
• Capacity building of small and medium sized
  farmers
• Multi-stakeholder consultation and coordination
• Concluding Remarks and Way Forward

3
Current Content of the FEPA

• Chapter I - General Provisions
• Chapter II - Trade Regime for Goods
• Chapter III - Fisheries
• Chapter IV - Economic and Development Cooperation
  
• Chapter V - Areas of Future Negotiations
• Including Special Chapter on Agriculture
• Chapter VI - Dispute Avoidance and Settlement,
  Institutional, General and Final Provisions
• Protocol I - Concerning the Definition of the
  Concept of Originating Products and Methods of
  Administrative Cooperation
• Protocol II - On Mutual Administrative Assistance
  in Customs Matters

4
Agriculture Related Provisions in the FEPA
Trade in Goods

• The FEPA provides for duty free and quota free
  (DFQF) market access for all EAC exports to EU
  with special safeguard provisions for sugar until
  2015
• The EAC will liberalise 82 percent of EU imports
  over a period of 25 years

Phase of liberalisaion Percentage of total trade liberalisation Goods liberalised
2008 2010 64 Raw materials and capital goods (CET 0)
2015 2023 16 Intermediate goods used in the production process (CET 10)
2020 2011 2 Finished goods (CET 25)
Total liberalisation 82
Excluded from liberalisation 18 Mostly agricultural products but also some industrial goods
5
Agriculture Related Provisions in the FEPA
Rules of Origin
6
Agriculture Related Provisions in the FEPA
Export Taxes
7
Agriculture Related Provisions in the FEPA
Non-Tariff Measures

• Ensuring transparency in accessing the EU market
  
• Increased access for EAC agricultural products
  in the EU market
• BUT
• It is also necessary to train and assist SMFs so
  as to enable them to comply with standards and
  regulations

• The imposition of non-tariff measures is
  prohibited
• Quotas
• Export or import licenses
• Exceptions
• Measures are applied to prevent or relieve
  critical shortages of food
• Restrictions are necessary to the application of
  standards or regulations in international trade

8
Agriculture Related Provisions in the FEPA
Safeguards

• The EPA allows for multilateral and bilateral
  safeguards, and includes special provisions for
  infant industries ...
• ....BUT
• burdensome procedures
• time limit after which clear elements are
  required leading to the elimination of the
  measure
• no special safeguards for agriculture
• only temporary distortions are addressed whereas
  distortions in agricultural trade are rather of
  structural nature

9
Agriculture Related Provisions in the FEPA
Development Cooperation

• EAC has drafted a Text on Agriculture (2009) and
  a Text on Economic and Development Cooperation
  (2011)
• Areas of development cooperation of both texts
  need to be harmonised
• Chapter on development cooperation should allow
  for the retention of mechanisms favourable to
  development and exclude mechanisms hindering
  development
• Revenue loss due to binding liberalisation should
  be caught by binding development support

• Until now only objectives
• EU confirms to continue its financial
  contribution to
• 10th European Development Fund
• Aid for Trade
• No new specific commitments under FEPA
• Development cooperation will be further
  considered in the next phase of negotiations

10
Potential for Equitable Agriculture Development
in the Framework EPA
11
Potential for EAD in the FEPA Increased
investment leading to improved productivity

• DFQF Market Access
• Can create incentives for increased investment in
  the agricultural sector leading to
• Improved productivity
• Diversification
• Import of capital goods
• Spill-over of technology

Main target of investment should be small and
medium sized farmers
12
Potential for EAD in the FEPA Increased
investment leading to improved productivity

• Rules of Origin
• simplified rules of origin provide more certainty
  
• Possibility of cumulation provides for value
  addition and diversification and can increase
  export activity in agricultural products

13
Potential for EAD in the FEPA Increased
investment leading to improved productivity The
Way Forward

• Chapter on Agriculture has to include provisions
  on
• promotion of joint ventures and mixed investments
  in general
• facilitation of access to credit facilities for
  small and medium sized farmers
• Chapter on Development Cooperation has to include
• Binding commitments to achieve a better
  infrastructure and better technological inputs
• Binding commitments to compensate revenue loss as
  a result of liberalisation through development
  support

14
Potential for EAD in the FEPA Reforming
international and regional disciplines in
agriculture

• Negotiating the FEPA as a bloc strengthening
  regional integration
• creation of larger markets
• generating small and medium sized farmers
  activity
• Improved food security by allowing the movement
  of goods from surplus to deficit areas within and
  outside the EAC
• Safeguards address the essential issues but fail
  to be effective due to time limitations and
  cumbersome procedures
• The use of subsidies should be confined

15
Potential for EAD in the FEPA Redress of
trade facilitation constraints

• Need for a specific development fund under FEPA
  aimed at
• Improving customs administration,
• building better infrastructure networks,
• capacity building of small farmers,
• harmonisation of the regulatory frameworks within
  the EAC
• etc.
• Need for binding commitments aiming at improving
  the agricultural private sector that go beyond
  traditional technical assistance and include real
  transfer of know-how and technology

16
Potential for EAD in the FEPA Capacity building
of SMFs

• the EPA fails to explicitly address
• Better access to production technologies, product
  quality enhancements and direct linkages to the
  market for SMFs
• Better information of SMFs on how to use
  commercial, technical, scientific and financial
  opportunities under the EPA

17
Potential for EAD in the FEPA Multi-stakeholder
consultation and coordination

• As promoted in the Cotonou Agreement, some
  multi-stakeholder consultations in EPA
  negotiations were conducted
• BUT
• no mechanism to ensure neither the taking into
  account of the stakeholders views nor the
  information of stakeholders about final outcomes
• parliamentarians, consumer associations, trade
  unions, small business, informal sector, and
  farmers are not always members of these fora
• multiplicity and sometimes ad-hoc nature of
  consultative mechanisms hamper regular and
  effective participation

18
Potential for EAD in the FEPA Multi-stakeholder
consultation and coordination

• The East African Business Council (EABC)
• smallholder farmers are not well represented thus
  they lack the ability to own policy
  implementation let alone policy-making
• The informal sector
• should also be recognized as a stakeholder and
  its participation in negotiations should be
  seized
• Including the informal sector as a stakeholder in
  the EPA negotiations would eventually
• transform informal activity to formal activity,
• increase government revenues
• enhancethe agricultural sector by making
  technology and finance available for a greater
  number of beneficiaries.

19
Concluding Remarks The way forward for national
governments

• National governments need to
• provide stakeholders with information on how they
  can effectively harness opportunities provided
  for under the EPA
• establish channels through which all stakeholders
  can participate in consultations on the ongoing
  negotiations and be informed about final outcomes
  
• establish mechanisms which ensure that their
  views, opinions and proposals are taken into
  account
• harmonise regional and national strategies
• allocate resources to sectors that are likely to
  benefit most from the EPA

20
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