EAC-USA TRADE AND INVESTMENT PARTNERSHIP AGREEMENT ELIZABETH TAMALE –ASSISTANT COMMISSIONER MTIC

US-EAC Trade and Investment Framework Agreement (TIFA) US-EAC TIFA was signed on 16th July 2008 by the US Trade Representative on behalf of the USA Government and the Director of Customs, EAC Secretariat on behalf of the EAC Partner States; Individual EAC Partner states had earlier signed bilateral Investment agreements or Trade and Investment Agreements with US; EAC-USA currently negotiating a Trade and Investment Partnership Agreement which covers all IP, labour rights, environment

WTO negotiations Marrakesh Agreement establishing the WTO, members established a clear link between sustainable development and disciplined trade liberalization; Doha Round, members pledged to pursue a sustainable development path by launching the first ever multilateral trade and environment negotiations; Doha Round have a direct bearing on sustainable development and can therefore contribute positively to efforts to mitigate and adapt to climate change; WTO's regular work provides a platform for addressing the linkages between trade and climate change;

Environment Goods Liberalising environmental goods and services; WTO members are working to eliminate trade barriers in the goods and services that can benefit the environment; Facilitating access to environmental products and services can help improve energy efficiency, reduce greenhouse gas emissions and have a positive impact on air quality, water, soil and natural resources conservation; Environmental goods can cover key technologies that contribute positively to the fight against climate change, Environmental goods and technologies are in the hands of developed countries;

cont Reducing or eliminating import tariffs and non-tariff barriers in these types of products will reduce their price and make them more accessible; Increased competition will foster technological innovation in areas related to protection of the environment and combating climate change; Elimination of tariff and NTBs on clean technologies may result into increase in trade;

cont Environmental goods under discussion DR include: wind and hydropower turbines, solar water heaters, tanks for the production of biogas, and landfill liners for methane collection; Submission by the European Communities and the United States in December 2007 proposes to give priority in the WTO negotiations to climate-friendly goods and to services linked to addressing climate change; These products comprise about one-third of the environmental goods already identified by a group of delegations;

Environmental Services The Uruguay Round focuses on Negotiations focused on sewage services, refuse disposal services and sanitation services listed in the environmental services sector of the Services; Other environmental services include “cleaning of exhaust gases” and “nature and landscape protection services” are directly relevant to climate change mitigation measures. Cleaning of exhaust gases includes emission monitoring and services aiming to control and reduce the level of pollutants in the air, caused by the burning of fossil fuels. Nature and landscape protection services entail various services aimed at protecting ecological systems as well as studies on the inter-relationships between environment and climate.

Multilateral Environmental treaties Members are also assessing the relationship between Multilateral Environmental Agreement (MEA) and trade to ensure that there is no conflict; Article 3.5 of the UNFCCC and Article 2.3 of the Kyoto Protocol provide that measures taken to combat climate change should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade and should be implemented so as to minimize adverse effects, including on international trade, and social, environmental and economic impacts on other Parties.

Agriculture Elimination of tariff and non-tariff barriers and a reduction in agricultural support in developed countries may lead to a more efficient allocation of global resources and production; Trade negotiations increase trade opportunities for developing countries which could lead to important income gains; Increased incomes may enable poorer countries to adopt technologies such as irrigation ;that reduce their vulnerability to the effects of climate change; BUT subsidies and domestic support are not subjected for discussion in bilateral agreement

Cont Development of the biofuels can assist them in meeting their reduction commitments for greenhouse gas emissions under the Kyoto Protocol; BUT what is the effect of biofuels on food security of poor countries? Biodiesel and bioethanol used to be traded as agricultural products. In 2005, the World Customs Organization decided to put “biodiesel” in Chapter VI on “products of chemical and allied industries” (HS ). Bioethanol is still traded under HS 2207 in Chapter 22 on “beverages, sprits and vinegar Bilateral negotiations may focus on reduced taxes for biofuels

contn An increasing number of private sector standards might include production or labelling requirements, with the stated objective of mitigating or adapting to the negative effects of climate change; Though non-mandatory, they may affect market access conditions for a range of products; A number of issues indirectly relating to climate change, such as the environmental benefits of removing trade restrictions in the energy and forestry sectors and the effect of energy efficiency labelling on market access may have an impact on access;

Carbon footprint of international transportation, “food miles” is an emerging concept that involves the calculation of CO2 emissions associated with the transport of food over long distances to arrive at the final consumer; More preference of home grown food and plants; Due to high energy requirement home grown food and plants may emit higher gasses that imported i.e. Dutch flowers vs Kenya flowers. Some of these are private standards though they affect trade.

US TIPA Art 12 investment and environment Recognises existing investment laws and policies, multilateral environment agreements; Investment should not weaken or reduce the protection of domestic environmental laws; Each party retains the right to exercise discretion with respect to regulatory, compliance, investigatory etc. regarding allocation of resources to enforce other environmental matters; Art 6: Expropriation and compensation No party may expropriate or nationalise (exceptions) this may involve closure of establishments due to policy change

contn Article 8: Performance requirement shall not be imposed i.e. on transfer of a particular technology, production process or any other proprietary knowledge to a person in its territory- how do you handle the requirement for technology transfer provision in Investment code

What needs to be done Clear understanding of relationship between environment, climatic change and trade Examine the National Environment laws and policies and how they affect trade What are our international obligations? And are they binding? Examine the various Multilateral environment treaties and assess how they treat least developed countries What are the exemptions available for LDCs and how can we factor them into the bilateral investment treaties? How do we integrate the EAC climatic change policies and concerns in the EAC-USA TIPA

conclusion How do we integrate the EAC investment policies in the EAC- USA TIPA National and EAC consultation process should involve all stakeholders Examine multilateral current negotiations while negotiating bilateral agreement, Some provisions may hinder market access and may be obstacle to trade; Should demand for technology transfer and easy access to technologies that mitigate climatic change Compulsory licensing of for technologies that address climatic change to make it affordable to poor countries.

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