Africa: EAC External Trade Deficit Margin Could Be Reduced With EU Pact
By Staff Writer
East African Community (EAC) countries trading with the European Union (EU) as a regional bloc will help reduce on their external trade deficit, said Ambassador Valentine Rugwabiza, the Minister for EAC affairs during a press conference on Tuesday 23 in Kigali, Rwanda..
Rugwabiza was explaining the benefits of the long-awaited EAC-EU trade pact to the regional economies.
Over the weekend, EAC partner states reached a consensus on the contentious clauses in the Economic Partnership Agreement with the EU.
The minister said the clause allows EAC to embark on the final negotiations with the EU which started in 2007.
“The bilateral trade agreement will allow favorable tax regimes, guarantee market access for goods from both blocs, enable technology transfer to the region, create value-addition for products and services, and create jobs,” she told reporters.
Rugwabiza pointed out that the region’s low export earnings were mainly as a result of the low production levels of goods and services, high costs of exporting and the high quality standard levels required by European markets.
“This pact will enable us diversify the level of exports, undertake the EAC infrastructure projects in order to lower transport costs, and gauge how much to invest in order for our businesses to be able to meet EU quality standards,” she said.
The EU has for long been a good market for products and services from EAC and the reverse is also true.
In the first half of this year, Rwanda’s total exports increased by 1.2 per cent in value to $ 293.53 million (Rwf202 billion) from $ 289.92 million (Rwf199.4 billion) in the same period last year, according to figures from the central bank.
Tea, coffee, minerals, hides and skins and pyrethrum are still regarded as the country’s major exports which, in spite of the value increase during the period, their total export volumes declined by 1.8 per cent during the period.
Rugwabiza said that increasing production volumes, maintaining consumer standards, streamlining transport costs and ensuring other trade operations go on smoothly in the bloc will allow goods from the region to become more competitive.
Different trade blocs in Africa are working together to ensure they maximally capitalize on markets among member states by enacting policies that encourage free flow of goods, services and labor, charging low levy on goods with the EAC rolling its new blitz Visa that allows one to traverse the region using a single visa acquired from either of the member country.