PUBLISHED ON September 22nd, 2014

East Africa countries reach trade deal with EU

The East African Community (EAC) Member States have all reached an agreement amongst themselves on a common position on the Economic Partnership Agreement (EPAs) with the EU, a senior Kenyan official said on Sunday.

Ministry of Foreign Affairs and International Trade Cabinet Secretary Amina Mohamed told journalists in Nairobi that the deal paves way for the signing of the EPAs before the Oct.1 deadline. “The agreement now has to go through internal processes so that it is ratified by both parties before the deadline,” Mohamed said.

EAC Members States include Kenya, Uganda, Tanzania, Rwanda and Burundi.

If the EAC and EU don’t sign the deal, then Kenyan exports will subjected to tariffs while the rest of the EAC partners states will trade under the everything but arms trade deal.

Kenya is a major exporter of horticulture, vegetables and flowers to the EU.

“But because of the delay in signing of the agreement, Kenyan exports to the EU might be subjected to import tariffs for period not exceeding three months,” Mohamed said, adding that the government has undertaken to cushion all exporters that will be affected by the taxes.

The EPAs, launched in Brussels in 2002, are aimed at enhancing sustainable growth, increasing production and supply capacities of the Africa, Caribbean and Pacific (ACP) countries, and promoting structural processing and economic diversification of the ACP states while supporting regional integration.

Experts say Kenya stands to benefit from foreign exchange earnings, employment opportunities and penetration to the EU market with EPAs.

The country has enjoyed preferential access to the EU market for the last 38 years through four successive Lome Conventions signed between 1975-2000. The intention is to reciprocate the trading terms that the ACP countries have been enjoying since 1959.

But the negotiations have faced stiff competition from the civil society and ACP’s trade experts, because of the risk they pose to local enterprises.

As of 2013, the EU accounted for 17.2 percent of Kenya overall trade, and it’s currently the second largest export market for Kenya as it absorbs close to 25 percent exports and 14 percent of imports.

Ministry of Foreign Affairs and International Trade Principal Secretary Karanja Kibicho said that EAC should ideally have concluded the trade talks in July. “These would have given enough time to make a transition from the Cotonou trade regime to the EPA,” he said.

According to Kibicho, all the other trading blocs in Africa have already signed the EPAs. “However, we have learnt from their experiences and we have gotten more concessions out of the EU,” he said.

He added that EAC member states will be allowed to impose export taxes on raw materials, on unlimited number of products without seeking permission from the EU.

Karanja noted that a trade body comprising of the EU and EAC will be put in place to iron out any trade issues that might crop up.

Source URL: Shanghai Daily News

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.