Saturday, December 01, 2007

Sierra Leone to press ahead with EU trade deal

image FREETOWN (AFP) — Sierra Leone will press ahead to sign accords to liberalise trade with the European Union that have been heavily criticised by anti-poverty lobby groups, a minister said on Friday.

Deputy Finance Minister Richard Conteh said Sierra Leone would sign the Economic Partnership Agreement (EPA) that will replace preferential tariff agreements due to expire this year, because it cannot afford to be left behind.

"The southern (African) countries have almost signed the EPA with west Africa waiting. This has been considered as a big blow," Conteh told a symposium organised by anti-poverty activists.

The European Commission this week announced that Botswana, Lesotho, Swaziland and Mozambique have initialled an interim EPA.

The current trade deals giving preferential market access to the African nations have to be replaced by the end of the year because the World Trade Organisation (WTO) has ruled they are illegal.

West African regional bloc ECOWAS has however urged its members against signing EPA in the wake of the EU-Africa summit in Lisbon next month.

Conteh said the government of the world's second most impoverished nation "has taken a firm stance" on the issue.

But anti-poverty activists suggest that the EPA which requires African, Caribbean and Pacific (ACP) countries to open up their markets to EU products in exchange for preferential access to the EU market, would compromise Sierra Leone's efforts to rebuild after a decade of a devastating war.

"The agreement with the EU will grant EU companies substantially free duty and tax access to the Sierra Leone market," said Christine Thomas of Sierra Leone's Chamber of Commerce.

"It may increase the dependency of the government on donor funding and lead to increase in direct income taxes on the hardpressed taxpayer and loss of the approximately 60 percent of ... tax revenue derived from import duties," she added.

Closure of firms and loss of jobs were a likely consequence, she said.

Abu Brima, director of the Network Movement for Justice and Development (NMJD), said opening up to EU imports could mean that regional "countries exporting among themselves would risk losing their market to the European exporters".

"The amount of diverted trade in the case of ECOWAS will be in billions of dollars," he said.

AFP: Sierra Leone to press ahead with EU trade deal