Roundup: EU pledges aid to fund trade development in Africa

The European Union (EU) has pledged to fund Africa's efforts to boost trade at the beginning of a special forum to discuss the Economic Partnership Agreement (EPA) during which officials said substantial progress was made, according to an EU statement received here Tuesday.

The 25-member EU is negotiating with 15 Eastern and Southern African states (ESA) on the prospects of a new reciprocal trading system which is expected to be implemented in 2008 when the existing treaties governing trade between them expires.

The EU has committed itself to giving up to 5 billion euros (6. 35 billion U.S. dollars) into the ESA region to help in bolstering trade and production of goods and services to promote equal trading with Europe.

Roger Moore, director in the Office of the European Commission's Director-General for Development, said more funding would be mobilized to facilitate trade in Africa.

He, together with his ESA counterparts, made the commitment to take actions and to mobilize the necessary resources to make the EPA succeed as a development instrument.

"We expect to grant up to 5 billion euros into the ESA region. The commission is encouraging the ESA countries to present their plans to enhance trade within in the region," Moore was quoted as saying in the statement.

The first text-based negotiations on an EPA between EPAs and the EU kicked off in Kenya's port city of Mombasa on Saturday when the negotiating parties met first at ambassadorial level.

The meeting then proceeded at technical level during which issues of taxation were expected to dominate

African countries endorsed the proposed treaty which would govern trade between Africa and Europe but said they still had "a number of concerns" including Europe's response to requests for more technical assistance to smoothen up trade between the two sides.

The EU, which is pressing for a new reciprocal trading pact with African countries, suggesting that African countries should stop over-reliance on heavy taxation as a source of government revenue, has promised to help fund local trade initiatives.

African countries blame the growing poverty in the continent for its inability to access the external markets as a source of revenue primarily because African products face massive trade barriers, including taxation and other health-related complications.

The EU delegation, led by Peter Thompson, Director in DG Trade of the European Commission, said he was truly impressed by the hard and constructive work that ESA states had put into producing the first draft EPA text.

"The first draft forms a very good basis for negotiations and in our meeting of yesterday we already managed to iron out some key guiding principles for the future economic partnership," Thompson said.

He urged the negotiators to ensure that trade is truly put at the service of development.

"We are certainly committed to aid for trade. Furthermore there is complete agreement that we need to pin down stable, transparent and predictable WTO-compatible rules that will send positive signals to much needed investors in the region," he said.

Source: Xinhua