chapter  11
45 Pages

Identifying products of defensive and offensive interests in both EPA trade regimes and WTO negotiations for commodity-dependent ACP economies: lessons from an empirical review of Tanzania’s agricultural sector

ByFRANCIS SHASHA MATAMBALYA

Tanzania is currently engaged in agriculture negotiations in both the Doha Round under the World Trade Organisation (WTO), and the Economic Partnership Agreement (EPA) that provides the base of the regime governing trade between the European Union (EU) and the African, Caribbean and Pacific (ACP) group of nations. Accordingly, the WTO’s General Council Decision of 1 August 2004 (commonly known as the July Framework) established a framework for the modalities phase of the negotiations. The Framework sets out parameters for the reduction commitments that will apply in relation to tariffs and domestic support, as well as committing to the elimination of export subsidies and other forms of trade-distorting practices. It allows developing countries to designate products as Special Products (SP). In this regard, Paragraph 41 of the Decision clearly states that ‘Developing countries will have the flexibility to designate an appropriate number of products as Special Products, based on criteria of food security, livelihood security and rural development needs.’ In addition, paragraph 42 of the Framework states that a Special Safeguard Mechanism (SSM) will be established for use by developing countries. In the EPA negotiations as well, the scope of agriculture liberalisation will have an important bearing on the substantive gains that can accrue to developing countries, including least developed countries (LDCs). Technically, the EPA trade regime should cover ‘substantially all trade’, as stipulated in Article XXIV of the General Agreements on Tariffs and Trade (GATT). Through the Interim Agreement of November 2007, the member states of the East African Community (EAC) agreed to offer preferential market access to 81 per cent of imports originating from the EU, in return for Duty Free and Quota Free (DFQF) access of EAC exports to the EU. Moreover, going by the content of existing free trade

agreements, the EAC countries will be allowed to designate some products for more flexible treatment and even exclusion from liberalisation. To sum up, in both negotiations fora, agriculture is particularly important for Tanzania, because of the agrarian nature of the country’s economy. Thus, in order to articulate the relevant offensive and defensive negotiations interests, it is necessary to thoroughly examine the structure and dynamics of agricultural production, and the barriers that the country’s products encounter on major destination markets. This chapter sets out to address these two issues.