Releasing the Joint Statement the Minister of Trade, Industry and Cooperative, Hon Amelia Kyambadde who co-chaired the Joint Press Conference noted that the new initiative will support the economic integration of the EAC and enhances the EAC-U.S. trade and investment partnership. The Hon Minister said that the new Partnership is built on the recognition of the important role that trade and investment play in economic and social development including job creation, both in East Africa and the United States.
On his part, the Deputy USTR said that the EAC and the United States agreed on a framework to move forward on the establishment of a Commercial Dialogue, which will be formally launched in late November 2012. Commercial Dialogue is a component under the TIP that establishes a consultative mechanism which will serve as a cornerstone of linking and engaging Governments with the private sector of both Parties. The dialogue will focus on promoting effective public-private partnership, which are a critical mechanism for attracting greater U.S. investments to the EAC region, especially in the area of infrastructure development, supply of services, mineral development and manufacturing. The Dialogue will implement its activities through targeted sector trade missions, activities and events; coordinated programs between U.S. agencies and their EAC counterparts in conjunction with trade associations and the diaspora. The East African Business Council will lead the EAC private sector in engaging with their counterparts in the U.S.
According to the Joint Statement the EAC and the United States also agreed that their respective technical teams will meet at the soonest possible date for further consultations and negotiation on the other three components of the EAC-U.S Trade and Investment Partnership, that is; a bilateral investment treaty, a trade facilitation agreement and continued capacity building.
The Bilateral Investment Treaty (BIT) aims at;
· Protecting investments in the territories of either Party where investor rights are not already protected through existing agreements;
- Encouraging the adoption of market-oriented domestic policies that treat private investment in an open, transparent, and non-discriminatory way; and
- Supporting the development and application of international law and standards consistent with the objectives of the cooperation.
The Parties will also negotiate and sign a Trade Facilitation Agreement which will provide for development and implementation of policies that promoted efficiency in the territories of the Parties through reduced transaction costs associated with the enforcement, regulation, and administration of trade policies.
The technical teams will further discuss and agree on the trade capacity building assistance, including identification and agreement of priority areas for support under the Trade and Investment Partnership. The EAC has identified the priority areas for the U.S support under the EAC-U.S Trade and Investment Partnership including the strengthening of region Integration by supporting EAC Partner States on
- Harmonizing customs regulations, improving customs inter-connectivity and harmonization of standards,
- Development of an efficient regional payment system, customs and financial market integration
- Establishment of an efficient regional infrastructure
- Promotion of technology transfer
- Development of capacity for trade and business development.
Through consultations the EAC will identify more priority areas for support under the EAC-U.S Trade and Investment Partnership. The negotiations may include development of a binding mechanism for delivery and implementation of the program under the capacity building support.
The EAC Ministers acknowledged that the United States already provides substantial assistance to the EAC Partner States and the Secretariat, including an additional amount of up to $10 million (ten million United States Dollars) that the United States will provide over the next five years to the EAC Secretariat to support regional economic integration.
As the next step, the EAC Ministers and the USTR agreed to advance the EAC-U.S Trade and Investment Partnership within their respective administrations. They also agreed to hold their next Ministerial meeting on the margins of the 2013 AGOA Forum.
The EAC-U.S TIP negotiation process was initiated and announced by the EAC Ministers of Trade and the USTR at the AGOA Forum in Washington D.C. earlier this year. In the first Joint Statement released on 14th June 2012, the EAC and U.S announced that the new EAC-U.S. Partnership will build on the foundations of the existing trade and investment relationship, including the African Growth and Opportunity Act (AGOA), and the U.S.-EAC Trade and Investment Framework Agreement (TIFA). In addition, the Statement indicates that the TIP will provide new business opportunities to U.S. and EAC firms by reducing trade barriers, improving the business environment, encouraging open investment regimes, and enhancing two-way trade. It is hoped that the EAC-U.S Trade and Investment Partnership arrangement will also serve as a building block towards a more comprehensive trade agreement over the long term.
The EAC-U.S. Trade and Investment Partnership is also an important component of the U.S. Strategy Toward Sub-Saharan Africa, which President Obama announced in June 2012. The Strategy outlines four main pillars which include.
- Strengthening democratic institutions,
- Promoting economic development,
- Ensuring regional security, and
- Continuing to improve development assistance initiatives.
The strategy makes clear that the focus of Obama’s plan lies in the first two pillars.