Friday, October 05, 2007

EU to increase trade support

from Africast

DAR ES SALAAM, October 04 -- The European Union (EU) will increase trade assistance to developing countries by Sh95 billion in the next three years.

European Commission top officials said in Dar es Salaam that countries in Sub-Saharan Africa, most of who are negotiating a new trade regime with the EU under the Economic Partnership Agreements (EPAs), will receive most of the funds.

"These funds are used to help develop the capacity to trade in partner countries by providing training and technical assistance, supporting private sector development, meeting health and safety standards for export, and facilitating regional market building," says a statement released by EC offices in Nairobi.

"In 2006, the continent received around 40 per cent of the total EC Trade Related Assistance (TRA), which amounted to Sh89.3 billion ( 940 million)," indicated the statement.

The announcement comes barely three months before the EU and a block of the African Caribbean and Pacific (ACP) countries sign a trade pact to replace the Cotonou agreement that ends in December.

The Cotonou agreement provides ACP countries, including Kenya, duty and quota free market access to the EU market.

Some WTO members had contested the Cotonou agreement saying it gave special treatment to some countries.

Kenya is negotiating EPAs under the South and East Africa (ESA) group of countries, most of them members of the Common Market for East and Southern Africa (Comesa).

"The Commission has provided TRA to Africa since the beginning of its development cooperation, and its engagement is solid and increasing," the statement says.

In addition, the EU (Commission and Member States) supports the development of infrastructure in Africa for around Sh190 billion per year and has launched a EU Infrastructure Partnership for Africa to develop interconnectivity.

The commission has pledged to set up an Infrastructure Trust fund with the European Investment Bank later this month.

"In its initial phase, the Trust fund will receive grants for  87 million from the EC and Member States, while the EIB agreed to mobilise up to  250 million in loans," says the Commission.

On the proposed Aid for Trade, EC says it is an essential vehicle to enhance regional integration and trade between developing countries.

It can help attract investment and build economic growth and poverty reduction.

"In the case of sub-Saharan region, the EC is also committed to support the aid for trade needs arising from the Economic Partnership Agreements," it says.

The EU attended a two-day WTO review of trade related assistance meeting for the African region in Dar es Salaam.

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