European Union

Over the last 40 years, trade has proven to be one of the most effective tools for stimulating economic and social progress. By increasing their external trade, developing countries may enhance their export earnings, promote industrialization and facilitate the diversification of their economies. The EU supports these developments by granting tariff preferences, which give a competitive advantage to imports from developing countries.

Eritrea benefits “Everything But Arms” (EBA) trade arrangement with the European Union which provides 49 "Least Developed Countries" (LDC) the most favourable regime available. The EBA gives the LDCs duty free access to the EU for all products, except arms and ammunition.

Eritrea is also involved within the Eastern and Southern Africa (ESA) group in ongoing negotiations to enter the Economic Partnership Agreement (EPA) with the European Union but has not signed the interim EPA agreed in August 2009 with six ESA States.

The comprehensive trade partnership would cover wide range of issues and current negotiations include:

• harmonised, regional market-access rules for EU exports to the region ;
• rules and commitments on services and investment;
• trade-related issues such as intellectual property rights, transparency in government procurement, sustainable development and competition;
• trade facilitation and co-operation on technical barriers to trade, Sanitary and Phytosanitary Standards;
• Rules of Origin.

The benefits of signing an EPA for Eritrea as for other LDCs who already benefit the EBA trade arrangements would be:
EPAs enhance trade – beyond free market access, EPAs come with less strict rules of origin, making it easier for LDCs to export products with inputs from other countries (third-country inputs).
EPAs tackle co-operation on trade-related issues – EPAs provide an opportunity to address complex issues affecting trade, such as copyright and the environment
EPAs boost regional markets and rules – by tagging on to ACP regional integration initiatives, EPAs help promote regional solutions, seen as good for development
EPAs provide for a broader approach to trade barriers – the EPA approach recognizes that tariffs and quotas aren’t the only barriers to trade, and provides a way of addressing wider issues, e.g. poor infrastructure, inefficient customs and border controls, or inadequate standards
EPAs bring tailor-made approaches to regional needs – EPAs are worked out in regional negotiations to make sure they take account of regional needs and each country's sensitivities and conditions
EPAs safeguard local economies – though ACP countries that sign EPAs must gradually open up to 80% of their markets to EU imports, safeguards ensure that EU products don't compete against locally produced products. So, trade disruption is avoided while local industries and consumers benefit from cheaper inputs and consumer goods.
EPAs respect national sovereignty – instead of imposing development strategies, EPAs ask countries to determine their own development strategies and the pace and sequence of reform decisions.
EPAs are stable partnerships between EU and ACP countries – EPAs establish viable contracts between equal partners which can't be altered without mutual agreement. This is an important difference compared to EBA (which is granted, and not negotiated, by the EU), favouring long-term planning

To support trade beyond the neighborhood the European Commission’s Export Helpdesk offers an online service, to facilitate market access for developing countries to the European Union. This free and user-friendly service provides relevant information required by developing country exporters interested in supplying the EU market.

The European Union believes that integration into regional and world wide markets is one important means for reducing poverty and building peace and stability. Therefore the European Union stands ready to support Eritrea in progressing on its integration into regional organisations.  In order to promote economic growth and political stability Eritrea is enhancing its regional integration as a Member of the Common Market for Eastern and Southern Africa (COMESA) and Southern African Development Community (SADC).