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
Possibility of cumulation in the area of Rules of Origin
Moving up the value chain and diversifying the production base by engaging in processing of goods
Cumulation with products from Algeria, Egypt, Libya, Morocco and Tunisia possible (neighbouring developing countries belonging to a coherent geographical entity)
RESTRICTIONS
No cumulation with ACP Countries who have not initialled EPA negotiations
No cumulation with regard to certain products from South Africa
Revision and loosening of restrictions is necessary

6. Agriculture Related Provisions in the FEPA: Export Taxes
Export Taxes are prohibited under the FEPA
EXCEPTIONS
foster development of domestic industry
maintain currency value stability
Process to use exceptions is time consuming and deprives the exceptions of their rapid reaction character
EAC proposal: allow the imposition of temporary export duties or taxes and ONLY notify the EU party
Eliminate use of export taxes through binding commitments of EU to replace revenue loss with foreign aid / FDI or with scientific / technical assistance

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. Main target of investment should be small and medium sized farmers
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. Thank you !
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