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E. Africa bloc signs interim trade agreement with EU

Tue 27 Nov 2007, 17:30 GMT
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(Adds Oxfam comment)

By Tim Cocks

KAMPALA, Nov 27 (Reuters) - Five East African countries agreed a new trade deal with the European Union on Tuesday, weeks before a preferential trade pact is due to expire, EU officials said.

Kenya, Tanzania, Rwanda, Uganda and Burundi -- which form the East African Community trading bloc -- and the European Commission inked an interim deal, covering goods and fisheries.

The move was a step towards a new Economic Partnership Agreement (EPA) covering issues such as services and investment to be reached by mid-2009, the Commission said.

"We wanted...to make sure trade will not be interrupted," said Tom Vens, head of trade at the EU delegation to Uganda.

Brussels wants to sign EPAs with nearly 80 former European colonies in the African, Caribbean and Pacific (ACP) region.

Negotiations were launched more than five years ago and the EU says the new deals must be in place by Dec. 31.

That is the expiry date of a World Trade Organisation waiver which has allowed existing EU preferential trade deals with the ACP group to continue, despite being ruled illegal by the WTO.

With no deal, ACP countries would face higher tariffs for their goods entering Europe from Jan. 1.

Many complain they were not given enough time to prepare their economies. The EU has said it will not seek a new waiver.

Oxfam and other development campaign groups accuse the EU of strong-arming ACP countries into doing deals.

"(The EU has) 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," said Luis Morago, the head of Oxfam's EU office said.

He urged other ACP regions to hold out against Brussels.

Tuesday's interim deal includes a list of farm and industrial products that the East African countries want to protect for now to prevent local companies going bust.

"The EAC states will gradually open their markets to goods from the European Union over a period of 25 years. After 15 years, 80 percent of the exports from the EU will enter the EAC market free of duties," the EU said in a statement.

About a fifth of EAC trade would be exempted from the requirement to liberalise, it said.

Last Friday, the European Commission and four states in Southern Africa -- Botswana, Mozambique, Swaziland and Lesotho -- inked a first interim, goods-only EPA. Namibia, Angola and regional heavyweight South Africa have so far stayed away.

EU officials expect only subgroups in the six ACP regions will sign up by Jan. 1.

The East African region itself has split between the EAC countries and islands in the Indian Ocean including Mauritius.

Indian Ocean officials are due to hold talks this week with the EU with a view to initialling an interim EPA.

Exports of East African countries include horticulture and coffee. The Indian Ocean states are exporters of fish and sugar. (Additional reporting by William Schomberg in Brussels; Editing by Charles Dick)

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