PUBLISHED ON October 21st, 2014

Allow reason to prevail in implementation of EPA

After nearly one decade of back-and-forth negotiations, the five EAC states have finally initialled the Economic Partnership Agreement (EPA) with the European Union.

Among its low-hanging fruits, the deal signed in Brussels last week marked the start of a six-month procedure for restoring Kenya to the list of states that export goods to Europe without paying duty.

Up to this point, we can only say our negotiators deserve every pat on the back for taking urgent steps to eliminate Sh670 million in monthly tax bill that local exporters have been exposed to since October 1.

For practical purposes, however, the deal signed last week can only be implemented after it receives approval of national and regional legislative organs of both the EU and EAC.

And going by its rhetoric in the past, the EAC political class is likely to prove a hard nut to crack too. We wish to take this early opportunity to appeal for sobriety in EPA discussions.

In the last ten years, the EPA negotiations have been known to produce more smoke than heat. But the economic losses suffered by Kenya’s exporters since October 1 only imply that time for politicking is over.

Granted, the technical experts who negotiated EPAs confronted some of the toughest economic and political questions linked to EPAs.

And they settled for what they saw fit for EAC. The political class too, has a well-defined mandate in the region that cannot be taken away just because EPA is urgent.

They have a role to keep Executive organs in check to ensure that interests of the region’s more than 145 million citizens are afeguarded in deals with external parties.

Yet reason, rather than populist sentiments, should be allowed to carry the day as the region moves to ratify the EPAs. A cursory look at the deal signed last week indicates that negotiators tried clever dose of patriotism, intellectual wit and good neighbourliness to break the decade-old stalemate and embrace the give-and-take spirit of global commerce.

Whereas the EU bargained for elimination of export taxes, the deal struck last week allows EAC to keep all its existing export taxes while consulting its trading partner before introducing new ones.

Similarly, the EAC which has been pushing for removal of all manner of agricultural subsidies extended by EU states scored big time when the EU side signed the EPAs last week.

The EU committed to keep its farm produce out of EAC market until it completely phases out all forms of farm subsidy. The compromises, made by both sides, must be taken seriously by the political class.

Source:: Business Daily

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.