Indian Ocean states set for new EU deals-Mauritius

PORT LOUIS, Nov 15 (Reuters) Four Indian Ocean states expect to finalise a new trade deal with the European Union (EU) by the end of next week and several countries in Eastern Africa are also likely to back it, Mauritius's foreign minister said.

Nearly 80 nations in the African, Caribbean and Pacific (ACP) group of former European colonies are deep in negotiations for new Economic Partnership Agreements (EPAs) with the EU.

The EPAs would replace existing preferential trade deals which were ruled illegal by the World Trade Organisation (WTO) and must be scrapped by January 1 when a WTO waiver expires.

Brussels says the new deals will help diversify the ACP economies away from commodities and attract more investment.

But many ACP countries are worried about opening up their markets to competition from Europe and from within their own regions. Several countries also complain the EU is not providing enough funding to help them modernise their economies.

''We have agreed on the broad principles and experts are now drafting the texts,'' the foreign minister of Mauritius, Madan Dulloo, said by telephone after talks this week in Brussels.

Most of the Eastern and Southern Africa group, which includes Mauritius and other Indian Ocean nations, will finalise an interim deal covering goods by November 23 before signing it by the end of the year, he said.

The Indian Ocean countries in the group include Comoros, Madagascar and the Seychelles.

BROADER DEAL Kenya, also in the ESA region and which has been a critic of the EPAs, ''expressed readiness'' to sign ''but of course I cannot speak for each and every member state,'' Dulloo told Reuters.

''We are negotiating and finalising with the Eastern and Southern Africa group,'' he said.

Uganda and Zambia are also part of the regional group.

EU and ESA negotiators agreed this week that as well as aiming for an interim deal by next Friday they should seek a broader deal, covering services for example, by the end of 2008.

''We have given ourselves one additional year, by the end of 2008, to complete negotiations for a full EPA,'' Dulloo said.

Analysts had predicted that a likely scenario for the negotiations between the EU and the six ACP regions would be an interim, goods-only deal, possibly with only some countries in the separate ACP regions while others take more time.

However, many of the former colonies face the prospect of higher tariffs for their goods entering Europe if they do not have the new deals in place by January 1, when the WTO waiver on their current preferential trade deals is due to expire.

Negotiators from the European Commission and the ACP's southern African region, which includes South Africa, were meeting in Brussels on Thursday.

REUTERS PY VC2140