Govt cautious on trade pacts, stresses minister

The government has said it would not be so generous or liberal in opening Tanzania`s doors to European goods and services as proposed under the Economic Partnership Agreements (EPAs).

It has made the cautious remark as negotiators struggle to beat the official deadline for the signing of the pacts.

The World Trade Organisation had set the end of this year as deadline for EU member States on the one hand and the African, Caribbean and Pacific (ACP) nations on the other to conclude negotiations and start actually implementing the EPAs.

The agreements are viewed as a balanced and equitable trade initiative between EU member States and the developing and less developed nations.

A WTO brainchild, the forthcoming trade initiative seeks to replace the current Everything but Arms (EBA) trade framework between the two parties.

WTO has rejected EBA as illegal and too biased for comfort and would be all too happy if it is scrapped by the end of this year.

Economic experts say EPAs seek to open up markets for goods and services from, and remove needless trade restrictions among and between the two sides.

Talks on the agreements are going on in both camps but free market access remains a complicated agenda that has locked interested parties in prolonged negotiations.

Industries, Trade and Marketing minister Basil Mramba told The Guardian in an exclusive interview in Dar es Salaam yesterday that the ``free market access component`` proposed under the EPA was still a bone of contention among parties to the negotiations.

EU member countries have expressed readiness to remove all remaining quota and tariff limitations on access to their markets as a way of helping the EPA negotiations to move ahead.

However, ACP countries have repeatedly said they are not ready to open their markets to EU goods and services that liberally.

``Tanzania`s stand is that we cannot allow EU goods and services to flood our markets without caring about the implications.

Our intention is to open our doors at reasonable terms profitable to our country and people,`` noted the minister.

``This is a big problem not only to us (Tanzania) but also to other ACP countries. The on-going negotiations seem to be especially difficult because of the controversy over the market access component,`` he added.

Developing countries are hesitant to open their markets to EU goods and services as proposed under the EPAs largely for fear that their own products could hardly compete.

Elaborated Mramba: ``If we open our markets too liberally, we will automatically kill our own industries and production.

Obviously, western goods and services would easily outsmart most of what we are able to pump into the local and international markets.``

He said EPA talks now in progress in developing countries are revolving around the extent to which ACP could open their markets for products from their western partners at least risk.

``EU member States insist on free market access because they know they have a lot of goods and services and a tiny market when the situation in developing and less developed nations is completely different,``said the minister, adding: ``That's why we insist that markets in developing countries opened to EU member States only to a certain degree and not wholesale.``

Although it is less than two months to the deadline, experts say indications are that it is near impossible for the parties concerned to resolve controversies relating to market access by the end of the year.

Luckily, WTO has already given EU and ACP negotiators the green light to proceed with discussions even after the elapse of the official deadline.

But minister Mramba expressed hope that negotiating groups would still beat the deadline, adding: ``In case we fail to resolve the problems, it would be only wise to continue negotiating until we strike some form of consensus.``

``If we completely fail to reach a consensus, the negotiations should be halted pending further talks - with developing nations being allowed to go back and resolve their own production constraints.

But there is no way we can open our doors to anyone without carefully weighing the pros and cons of doing so,`` he observed.

Critics say EPAs could have negative implications on ACP countries, including eating into the ability of governments in the countries party to the arrangement to cushion their economic development.

It is argued that EPAs in the form favoured by EU member States would subject poor farmers in developing countries to more direct unfair competition from highly subsidised producers in the industrialised world.

Some experts argue that the new rules planned for implementation under EPAs, chiefly on the liberalisation of services, investment, competition, procurement in the public sector, and intellectual property rights, would favour European investors and suppliers at the expense of their ACP counterparts.