PUBLISHED ON October 3rd, 2014

Export trade talks with EU collapse

UNCERTAINTY has gripped fresh produce exporters after trade talks between the East African Community and the European Commission over the long dragging economic partnership agreement temporarily stalled.

The draft agreement signed by the five EAC member states on September 20, was last week rejected by the EU team.

ANXIETY: Workers at the Oserian flower farm on May 15. The Kenya Flower Council says the country may lose out to Ethiopia, Ecuador and Colombia
ANXIETY: Workers at the Oserian flower farm on May 15. The Kenya Flower Council says the country may lose out to Ethiopia, Ecuador and Colombia

The move has sent Kenya, which had taken upon herself to lobby the rest of the EAC countries and further seek consensus with the EU in a bid to expedite the conclusion of the talks, back to the drawing board.

EU’s resident Trade and Communications counsellor Christophe De Vroey yesterday said there is no scheduled meeting between the two parties after the “EAC text” was turned down by the EU negotiators.

“The text that was signed by the (EAC) council was not accepted, but we are looking for another meeting in the next few weeks,” De Vroey told the Star on the phone.

Kenya yesterday became the only African country to lose out on the duty and quota-free market access to the 28-member EU, following the deadlock over the labourious EPA negotiations.

This is because the rest of the EAC countries – Tanzania, Uganda, Rwanda and Burundi – are cushioned through Everything-But-Arms trade agreement for least developed countries.

Other African countries exporting to the EU are also safe from higher taxation regime after their respective trading blocs, the Economic Community of West African States and Southern African Development Community, both signed EPA pacts with EU last July.

Failure by the EAC to conclude the trade pact in time for ratification before the September 30 deadline has effectively exposed Kenyan produce to a higher tax bracket under the Generalised System of Preference.

Cut flowers are now charged 8.5 per cent duty to enter EU markets, pineapple and other juices pay 11.7 per cent while the tax for processed vegetables and fruits is in the upwards of 15 per cent.

Before yesterday, these exports were duty and quota free following the EU’s January 2008 interim market access regulation window to promote trade reciprocity and integration, pending the conclusion of the comprehensive EPAs between the EU and the African, Caribbean and Pacific countries.

Three years ago, the EU Commission, however, set the September 30 as the deadline for concluding EPAs.

“It is very unfortunate that no deal has been signed because the value of Kenyan exports (to EU) is more than Sh100 billion,” De Vroey said. “Most of them are fresh produce, especially flowers.”

Source: The Star

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