PUBLISHED ON October 14th, 2014

Counter accusations mar failed bid to EU market

Nairobi; Kenya: The Government’s failure to reach a deal on the Economic Partnership Agreement (EPA) has placed Kenya’s foreign policy in the spotlight, raising questions about the country’s ability to adequately represent its trade interests globally.

This comes as resources at the Foreign Affairs office appear directed towards the criminal cases facing President Uhuru Kenyatta and his deputy William Ruto at the International Criminal Court (ICC), leaving Kenya economically exposed.

The move has also exposed the country’s economy to billions of shillings in losses and hundreds of thousands of job cuts as exporters are left reeling under heavy taxation from the European Union (EU), putting Kenya’s key foreign exchange earnings on line.

Trade talks

Now, analysts want the Government to consider re-organising and perhaps splitting the highly complex Ministry of Foreign Affairs and International Trade. This comes as the EPA trade talks between the East African Community (EAC) and the European Union (EU) stall, having missed their ratification deadline two weeks ago.

“The problem with the stalling of the EPA is that the Foreign Affairs office was really caught up in the ICC cases and failed to give enough attention to the EPA talks,” explained an economist at the Kenya Institute for Public Policy Research and Analysis (Kippra), who asked not to be named due to the sensitive nature of the topic.

“By the time we realised as a country that the deadline was here and the other East African countries had abandoned us, it was too late and now we have to go through the expensive lobbying process of having Kenya included on the list of beneficiaries of the market access regulation.”

Negotiations for the new EPA structure have been underway for more than 10 years, and are meant to replace the Cotonou Agreement signed in 2000, after the expiry of the Lomé Convention of 1975 which granted non-reciprocal trade preferences to the African Caribbean and Pacific Group of States (ACP) partners.

Last month, the EAC Council of Ministers met and developed a proposal on key negotiation areas, in which Kenya was mandated under the leadership of Foreign Affairs Principal Secretary Karanja Kibicho to present to the EU.

But the Trade Counsellor at the EU mission in Nairobi Christophe De Vroey said the EU rejected the proposals and advised the EAC accordingly. “EU rejected the text and wrote back to the EAC secretariat,” said Christophe last week. Mr Christophe however denied that the EU has been the stumbling block during the talks and instead blames the EAC countries for delaying to agree among themselves.

“After the very successful March meeting in Nairobi, the EU suggested to meet again well before end of June so as to finalise the outstanding issues and to guarantee duty free access. Would we have finalised before July (as the other regions did), then we would have met the October 1 deadline to re-instate Kenya as a beneficiary of the market regulation on time,” said Christophe.

Christophe observed that the EAC region took almost four months to propose Kigali for the July meeting. Not only was the opportunity missed to meet the October 1, 2014 timeline, but also things did not go smoothly in Kigali.

Key complaints

The EAC Council of Ministers however, argue that the EU declined to attend the Arusha meeting, and failed to give reasons for its refusal. The EU is also accused of declining a request for a meeting by the EAC Secretary General to clear the outstanding issues last month. Kenya’s Foreign Affairs and International Trade ministry complained that despite several calls to the EU to organise for a meeting, it has remained silent.

Kenya has been negotiating the trade talks under the EAC regional bloc despite being the only country not to enjoy duty free market access.

Source:: Standard Digital

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.