EPA - Tanzania Raises Genuine Concerns and Will NOT Sign

Rick Rowden Correspondent

FROM the African Union and the United Nations Economic Commission for Africa (Uneca) to the European Union and African countries’ trade and development ministers, nearly everyone agrees that African economies must industrialise.

Yet despite this broad consensus, when it comes down to the specific policies needed there remains widespread disagreement. The recent refusals of Nigeria and Tanzania to sign on to the EU’s proposed free trade deals, or Economic Partnership Agreements (EPAs), are the starkest manifestation of diverging agendas.

Most African countries currently have duty-free access to the EU single market for their goods under several iterations of the Lomé Convention. [B]The new EPAs would, within a decade, give similar tariff-free access for about 80 percent of EU exports into African markets. Europe has warned that African economies could lose Lomé preferences if EPA deals are not concluded.

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http://www.herald.co.zw/why-african-countries-are-refusing-trade-pacts/

So why the reticence?

Part of the answer links back to the drive for industrialisation. Both Nigeria and Tanzania recently adopted ambitious industrialisation plans, and new governments in both countries appear more genuine in their desire to implement them.

And in both, policymakers claim the rules and restrictions in the proposed EPAs would undermine these strategies. The popularity of free trade over the last 30 years has made it standard for donor agencies and trade negotiators from rich countries to press developing countries to adopt free trade. The EPAs follow on these assumptions.

Nigeria and Tanzania appear to be questioning the prevailing wisdom. Instead, they are looking to the historical record.

industries

The main reason cited by Tanzanian and Nigerian officials for rejecting the EPAs – that they would block industrialisation – are consistent with these historical lessons.

Not only do officials worry that the EPA’s proposed tariff reductions would pose a drain on vital revenues needed for annual budgets, but both countries are concerned that dropping tariffs would destroy local industries – a view supported by research by think tanks such as the Wilson Centre.

“Our experts have established that the way it has been crafted, the EPA will not benefit local industries in east Africa. Instead it will lead to their destruction as developed countries are likely to dominate the market,” Tanzania’s foreign affairs permanent secretary Aziz Mlim stated.

For example, Tanzania banned exports of mineral sands from gold mining on August 1. This is permitted under World Trade Organisation (WTO) rules, but would not be allowed under the EPA.

Rather than exporting the sands — to be processed into tin, copper and silver abroad — Tanzanian president John Magufuli called for processing plants to be built in Tanzania and to further develop markets for copper and silver.

Indeed, a number of EU trade policies are quite clear in their intent to use trade deals such as the EPAs to open up access to raw materials for use by European high-tech manufacturers.

There is also the issue of African regional economic integration. While the EU claims the EPAs would support the region’s integration, others disagree, including former Tanzanian president Benjamin Mkapa.

He fears that locking in old North-South trade flows under the EPAs would undermine recent efforts at building new South-South regional trade ties.

Drawing on data that shows African countries buy more manufactured goods from one another than do others (most of the EAC’s exports to the EU are primary commodities), Mr Mkapa says that inter-African trade is far more important for the region’s aspirations to industrialise. “The EU market plays almost no role in this,” he concludes.

Nigeria does not need an EPA “until it has been adequately industrialised and (is) able to trade industrial goods competitively”, Frank Jacobs, president of the Manufacturers Association of Nigeria, emphasised in a recent interview.

For now, it appears that the impasse is set to continue. Tanzania and Nigeria are determined to take a different approach — using trade protection first, then adopting free trade later. Their next moves will be watched closely. — This Is Africa.

HAPO SAWA Magufuli mwenye kusema na kutenda

Great arguments. Africa should study NAFTA and see how US and Canada fukced Mexico

The whole thread and subsequent comments are in English, na unajifanya umeelewa kitu

Kenya is driven purely by it’s own selfish interest - Exporting flowers to EU tariff free.

Nothing else.

You are a very depressed person, always looking at issues negatively after all Kenya pays for everything it has. Let those dreaming ujamaa continue doing so. Socialism is dead and buried.

Tanzanian President John Magufuli has maintained his hard-line stand on signing the Economic Partnership Agreement (EPA) with the European Union, saying it threatens local industries.

The no-nonsense leader said his country needs to industrialise hence the need to cushion young enterprises from European competition, but opened the door for further negotiations over deadline extension.

He made the remarks at a tense six-hour meeting at the Magogoni State House in Dar es Salaam, effectively shattering any real hopes for consensus among the East African Community (EAC) member states before the October 1 deadline.

“In Tanzania, we have already resolved to create an industrialised economy; so if we are to adopt this agreement the way it is right now, the question would be how can we safeguard those industries from competition with European industries?” Magufuli posed.

The meeting ended with a proposal that the EAC pushes the date for the final decision on the bloc’s commitment on the EPA to January next year. Mr Magufuli, also the chairman of the EAC, asked the other regional leaders, including Kenya’s Deputy President William Ruto, to consider seeking an extension of the deadline from the EU to allow for further deliberations, saying this would a “win-win” for all. On Thursday, Mr Ruto had made a last-ditch effort to convince the Tanzanian President to reconsider his stand on the trade pact that guarantees exporters unlimited access to the European market.
Read more at: http://www.standardmedia.co.ke/business/article/2000215361/whytanzania-s-magufuli-will-not-sign-eu-trade-deal

You can always count on a Kenyan to be short sighted and seek the path with the lowest resistance.

Lets look at the bigger picture for a moment

[SIZE=5]True NAFTA Fucked the countries south of USA, Competing with highly subsidized American goods and produce fucked their agriculture !!! Mzungu anafaa Kuogopwa [/SIZE]

@spear your analysis are greatly needed.Okoa jahazi.

Remember that Kenya flower industry is in the hands of our greedy politicians and companies with offices registered off shore in Mauritius for tax evasion purposes. Any person with an iota of brain cell would decline this deal as it is.

Even COTU has called for the rejection of this deal.

William Ruto , the god father of corruption was pursuing his selfish interest in Dar. Thankfully HE Magufuli saw him off empty handed.

Any country that seeks to develop by isolating itself won’t yield anything. You do not stop the flow of crude oil that you want to sell refined oil or you want a better deal, ask South Sudan. Take what you can at the moment tomorrow the world may not need your resources. Probably the price will even be lower or they will take it by force. Want to be a champion, train with and compete with champions.

magufuli is not myopic signing the deal will be didastrous for the country 8ndustrilization plans, there are only a few benefits for us but the eu will dump all their cheap goods in our market. a country to look as a case study would be ukraine immediately after ratifying their agreement with the eu they have lost alot of their industries