PUBLISHED ON September 5th, 2014

We should not rush to sign trade pacts that are designed to harm our economy

The deadline for signing the Economic Partnership Agreements (EPAs) is October 1, 2014. The East Africa Community has raised concerns about certain outstanding issues in the agreements.

Subsidies to European farmers and the fact that this is not addressed in the current EPAs, export duties and taxes that guarantee policy space for protection of vital sectors mainly agriculture and industrial development, and non-trade conditions in the Cotonou partnership agreement such as good governance.

Agriculture contributes 25 per cent to the economy and employs over 80 per cent of Kenyans. The contribution of exports to the economy has been low, with Kenya’s share of world merchandise exports at 0.03 per cent whereas that of services is 0.09 per cent.

According to the Economic Survey 2014, Kenya’s economic foundation is based on agriculture and forestry (25.3 per cent), wholesale and retail trade (10.2 per cent), transport and communication (9.2 per cent), manufacturing (8.9 per cent), education (6.7 per cent), and financial services (4.8 per cent).

Construction is also an important pillar.


Kenya has great potential and its economic foundation must be safeguarded to enable it to regain independence and have a bigger say in its own destiny. That is why we need egalitarian pro-poor trade agreements in the 21st century.

This makes it vital that all trade agreements that the country has entered into be re-examined with a view to revising Kenya’s foreign trade policy and legal framework where possible to ensure sustained real trade, investment, and industrial development.

Except for intra-Africa trade, where Kenya enjoys a trade surplus, its performance with the rest of the world is in deficit and net foreign earnings negative. This is why it is important to ensure that our future trade agreements are balanced.

The government is on the right path in insisting that the contentious issues in the EPAs be dealt with to regain global fairness in international trade. Trade between Kenya and the European Union has always been in favour of the EU.

Trade deficit is expected to deepen even further if the EPAs are signed in their current form. The main issues at the centre of the controversy — agricultural subsidies and export taxes and duties — are a trap that have the potential to harm Kenyans, particularly farmers and micro and small enterprises.

They are likely to consolidate the trade imbalance since they are tailored to render Kenya’s agricultural sector uncompetitive.

As a developing nation, Kenya cannot afford subsidies to EU farmers under the common agricultural policy, which provides for support of up to $484 billion for the period 2014 to 2020, constituting $372 billion direct payments to farmers and $113 billion targeted at rural development. If this is not addressed, we can forget about the targets set out in the Agriculture Sector Development Strategy to enhance competitiveness and productivity with a view to improving Kenya’s food security and alleviating poverty.


The solution to agricultural development, an important pillar of Vision 2030, lies in protection from unfair competition, product diversification, technological improvement, human capital development, local value-addition, reducing the cost of farm inputs such as fertiliser, improvement of storage, adoption of high standards, strengthening agricultural certification institutions, curbing rent-seeking opportunities in trade facilitation, and market diversification. Focus on intra-Africa trade is critical as we expand our markets.

The debate on the EPAs must be embedded in nationalism, patriotism, and balanced analysis and reporting. If Kenya does not sign the EPAs, the horticultural sector will be adversely affected by the GSP duties ranging between 5 to 10 per cent.

If it signs the agreements, the lives of over 35 million Kenyans who depend on agriculture will be negatively affected, poverty reduction efforts hurt, food insecurity increased, and Kenya’s economic foundation shaken.

The signing of the EPAs should be postponed until the contentious issues are addressed with a view to benefiting Kenyans.

Source URL: Daily Nation

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.