African nations risk losing tax-free access to Europe -EU official

NAIROBI, March 21 (Reuters) - Some African countries could lose tax-free access for exports to the European Union if they fail to sign a deal by next year to replace preferential agreements that the World Trade Organisation has rejected, an EU lawmaker said on Wednesday.

The European Union and African, Caribbean and Pacific (ACP) countries had until the end of 2007 to sign the Economic Partnership Agreement (EPA) agreements to replace existing unilateral trade preferences, or risk having European trade disrupted.

Since then the EU's talks with most of the countries, especially those in Africa, have dragged on longer than planned as activists in Europe argued that the availability of more African products would hurt Europe's farming and manufacturing sectors.

Without a deal, countries like Ivory Coast, Ghana, Nigeria and Kenya - not classified as "least-developed countries" - will have to start paying duty of between 8.5 and 15.7 per cent on their exports to Europe.

Vital Moreira, chairman of the EU Parliament's International Trade Committee, said the EU Commission planned to change its Market Access Regulation, which if passed, would remove preferential access after January 2014 for any country that failed to ratify the EPA by the end of 2013.

"We got a waiver from WTO that ended in 2007. So we are five years late on the schedule. We are under an illegal and unfair situation, so time matters here, and we are really on a time pressure," Moreira said.

"I think that our counterparts in Africa should understand that we cannot drag on and on."

Some nations in the talks will still qualify for tariff-free access without the EPA under the EU's unilateral Everything But Arms (EBA) initiative for the least-developed countries (LDCs).

But Moreira cautioned that this initiative was not an alternative to signing the partnership agreement.

"The European Union could decide to remove the EBA scheme. Secondly, you are not supposed to remain as an LDC forever," he said.

"If the LDCs in this region do think that they have an alternative, they have a wrong assessment of the situation."

So far only Caribbean countries have ratified the partnership agreement, while those in the Pacific had ratified an interim agreement, Moreira said.

Some countries, clustered under five other groupings - East African Community (EAC), West Africa, South African Development Community, Central Africa and Eastern and Southern Africa - have since initialled the agreement, but not ratified it.

For instance, the EAC - comprising Burundi, Kenya, Rwanda, Tanzania and Uganda - initialled it in 2007, but later said it would not sign a final deal without firm EU commitments to development aid, trade and other development issues.

They missed two deadlines, the last one in November 2010, and after delays, resumed negotiations in 2011.

Source: Reuters