It is now emerging that Kenya lost out in the trade talks with the European Union mainly due to lack of support from its partners in the East African Community. As time was running out for the EAC to conclude the talks last month, the five EAC countries were summoned for a crisis meeting in Arusha, Tanzania. The five — Kenya, Tanzania, Uganda, Rwanda, and Burundi — were expected to take a common position to take to Brussels, Belgium, to unlock the stalemate in the negotiations to allow Kenya to access the European market duty-free. Tanzania seemed to be particularly disinterested, not even bothering to send a representative to the meeting held on its territory. The lack of commitment from most members of the EAC to attend scheduled meetings, Smart Company has learnt, is one of the reasons the negotiations took long and failed to yield results before the 1 October deadline. NOT URGENT Over the past five years, Kenya has been negotiating the Economic Partnership Agreements (EPAs) deal that would have seen exports from the region enjoy duty-free, quota-free access to the EU together with other EAC members. The expiry of the deadline has hit Kenya hardest because the other EAC member states are classified as Least Developed Countries (LCD) and, thus, continue to enjoy the privileged EU market access even without the EPAs deal. This presents the worst indictment of the frosty relations between the EAC countries, leading Kenya to express frustration at its failed efforts to convince...

Egypt will participate in the Tenth Meeting of the Trade Negotiations Forum with three African blocs scheduled to take place in Burundi this October. The announcement was made by Saeed Abdullah, Chairman of the Trade Agreements and Foreign Trade Sector at the Ministry of Trade and Industry. It will see Egypt talk to the Common Market for Eastern and Southern Africa (COMESA), Southern African Development Community (SADC), and East African Community (EAC). The Forum’s goals include finalising negotiations on the draft free trade agreement items which will come into force for these blocs. It will also include adopting technical work group reports in the fields of customs cooperation, trade, dispute settlement, and rule of origin. The Forum is also intended to research developments in negotiations among member states on tariff reductions and adopting an executive roadmap after signing the draft free trade agreement. The announcement of the first stage negotiations results is also set to be adopted during the Forum. Abdullah said that the results of the meeting will be sent to senior officials and then onto a ministerial committee for approval. He added that a meeting was also held surrounding non-tariff barriers for COMESA last week in Kenya. A presentation was given by UNCTAD on non-tariff barriers and non-tariff measures, while another focused on classifying non-tariff barriers in COMESA. A third presentation discussed the impact of non-tariff barriers on COMESA, and a study of the minimum criteria necessary cross-border trade was also presented. He said the meeting produced many...

More emphasis needs to be placed on trade partnerships among African countries to drive seamless intra-Africa trade, an economic survey has shown. While international trade agreements such as African Growth and Opportunity Act (AGOA) and the recently announced Economic Partnership Agreement between the European Union and Southern Africa are positive for the continent and should be encouraged, Africa is still the world’s least connected continent when considering the ease of moving people, trade, information and finance, according to the DHL Global Connectedness Index, released in Cape Town, South Africa, on September 30. There are insufficient trade agreements to encourage and drive intra-Africa trade, Charles Brewer, managing director of DHL Express Sub-Saharan Africa, said while releasing the data. As a result, there tends to be a focus on doing business with regions outside of Africa, such as the United States or China, he said. African countries, Brewer said, desperately need to start trading among themselves, and the push for trade agreements should therefore not only be with international trading partners, but among African countries too. All African countries should therefore be focused on developing connectedness on the continent and building trade relationships, said Brewer. Intra-regional trade statistics show that Africa rates among the lowest, with less than 20 percent of what is produced in the region staying within the region. This, in essence, means that over 80 percent of what is produced in Africa is exported, mainly to the EU, China and the US, the index shows. By comparison, 60 percent...

The East African Community (EAC) secretary general, Dr Richard Sezibera, has given a positive endorsement of intra-trade growth prospects within the African continent. Speaking at the Africa Global Business forum in Dubai last week, Dr Sezibera said East African countries traded more with each other in the last three years, growing their trade volumes by about 22 per cent. Intra-African trade is still comparatively low and ranks among the smallest levels of intra-regional trade globally. For instance, 70 per cent of the European Union’s trade takes place within the region. Data from the EAC Secretariat shows that intra-EAC trade grew to $5.5 billion in 2012, up from $4.5 billion recorded in 2011, even as the five member states of Kenya, Uganda, Rwanda, Tanzania and Burundi, struggled with the elimination of non-trade barriers. “I am very optimistic about intra-trade in Africa and the prospects are looking good. To ensure this continues, it is important to remove barriers, like road blocks, and investing in infrastructure in the effort to make trade streamlined. In order to guarantee a free-trade area in Africa’s future, we must apply Dubai’s strategy which includes having a clear vision of where we want to be and the determination to build capacity by acquiring talent from different countries.” A recent research on cross-border payments by independent market research agency-SWIFT has indicated that African countries carry out about 23 per cent of their trade with one another, a per centage higher than the 15 per cent estimate by the World...

Rwanda’s hopes of clearing more goods under the East African Community Single Customs Territory (SCT) have suffered a setback after encountering a few hitches at the Dar es Salaam port in Tanzania. September 15 was the date set for clearing of goods destined for Rwanda at the Dar port under the Single Customs Territory (SCT). ICT-related hiccups and lack of training for the agencies that facilitate clearing of goods are some of the problems stalling the SCT. “Tanzania is not ready,” said Fred Seka, head of Rwanda Freight Forwarders Association. This means that only petroleum products and wheat grains destined to Rwanda benefit from the SCT clearance model because their duties are assessed and paid for on arrival at the first point of entry. Rwanda had hoped to increase the list of goods to benefit from the SCT clearance model. The failure makes the country prone to dumping of goods, especially those destined to Burundi and Democratic Republic of Congo. Dumping of goods is a major threat to the survival of companies as it creates an unlevelled business environment. But Rwanda remains hopeful that Tanzania will facilitate the full roll-out of the SCT to speed up clearance times for consignments. “The implementation of the SCT highly depends on the second country as Rwanda is ready,” said Raphael Tugirumuremyi, the Rwanda Revenue Authority deputy Commissioner-General in charge of customs. Traders also complain about the continued existence of non tariff barriers along the central corridor, which add to the cost of doing...

East Africa has lowered the bar for traders to access the regional market duty-free, by allowing the cost of delivery to be included in determining how much value has been added in a member state. Under the revised Rules of Origin adopted by East African Community ministers, finished products are required to have at least 30 per cent of the ex-works value added in the exporting member state, down from 35 per cent of the ex-factory price. Ex-works price includes distribution costs like transport and logistics to the shop yard — which increases the local input that is required for finished products to be considered community goods — while ex-factory price looks at value added on the factory floor. Such goods access the member states markets duty-free under the East African Community Common Market Protocol. This effectively opens the door for goods that previously did not qualify for unfettered access to any of the five East African Community member states — Burundi, Kenya, Rwanda, Tanzania and Uganda. “The purpose of these rules is to ensure that there is uniformity among partner states in the application of Rules of Origin and that to the extent possible, the process is transparent, accountable, fair, predictable and consistent with the provisions of the Customs Union Protocol,” said Andrew Luzze, the East African Business Council’s executive director. He, however, warned that more needs to be done to ensure there is smooth flow of trade within the region, including elimination of non-tariff barriers by the partner...

NAIROBI, Kenya, Oct 4 – It is now emerging that the European Union (EU) may be to blame for the failed Economic Partnership Agreements (EPAs) negotiations with the East African Community (EAC). A leaked report seen by Capital FM News indicates that the EU has refused to hold a meeting or propose a date or way forward on the matter. According to the documents EAC Council of Ministers met on September 20 to deliberate on the outstanding issues and mandated the EAC Secretariat to write to the EU requesting for a meeting between September 23 and 26 in Nairobi. Although EAC Secretariat did as requested, the EU responded saying ‘they do not see the need’ for a meeting. The documents say that the EU has remained silent despite several calls from Kenya’s Ministry of Foreign Affairs and international Trade, to organise for a meeting. EPAs negotiations have agreed on all issues except three: Export Taxes, Export Subsidies and Relationship between Cotonou Agreement and EPAs. “EAC wants to use export taxes as an instrument of development primarily to add value to its raw materials such as tea, coffee, fresh fruits and vegetables,” the document states. EU on the other hand wants continuation of supply of raw material to their industries and therefore rejects export tax. EU also insists any introduction of export taxes must be approved by EPA Council and reviewed within 48 months with a view to terminating it. On export subsidies EAC wants an enlarged band of export subsidies...

TradeMark Africa (TMA), which marks its fourth year in enhancing trade and integration in the East Africa region, recently unveiled a web-portal which will contain crucial information on trade and markets in the region. The web-portal is a one stop shop on information in trade, markets and integration. Speaking during the unveiling ceremony, Frank Matsaert, CEO, TradeMark Africa (TMA) noted that the communications tool, will enhance accessibility of information to all the East Africa citizens. “For the last four years that we have been in operation, a lot has been achieved. Various projects and measures have been undertaken to improve and enhance trade in East Africa region. We have documented some of the best practices in form of case studies which we have shared on our new website,” said Matsaert. TradeMark Africa (TMA) recently in partnership with key stakeholders drawn from government agencies, private sector and interested parties kicked off a Northern Corridor Performance Dashboard - an IT system that captures live data and transmits it. The tool captures critical information such as ship waiting time, vessel turnaround time, and cargo dwell time. This information is available for anyone to see, hence the agencies are able to pinpoint the barrier to trade. TradeMark Africa (TMA) has invested US$53 million in the port corridor rehabilitation to strengthen infrastructure, improve productivity and create an enabling institutional framework. Besides the Performance Dash Board, in partnership with Kenya Trade Network Agency (KenTrade), a new single window system, was unveiled which documents all import/export documentation,...

TradeMark Africa recently participated in the WTOs Public Forum, whose theme was “Why trade matters to everyone”. The opening speeches of the Public Forum focused on the impact of trade on the quality of people’s lives and how the perceptions of this have shifted. UN Secretary-General Ban Ki-moon highlighted that trade can be a driver for a life of dignity for all. Director-General Roberto Azevêdo noted that the greatest proportion of supporters of trade is now found in the developing countries. Kenya’s Deputy President William Ruto said that Africa has risen from a repository of natural resources to an active player in world trade. TradeMark CEO Frank Matsaert participated in the plenary debate during Day one, with the theme “What trade means for Africa”. Click here to listen to the discussions. TradeMark Africa also had the opportunity to show case with its partner, Rwanda Revenue Authority, the successes of the Rwanda Electronic National Single Window. Electronic Single Window (eSW) in Rwanda – an effective tool for bringing down the costs of trade for the government, private sector and consumers. Click here to listen to the presentation. Click here to view Frank Matsaert’s take on why trade matters

More than 150,000 Kenyans stand to lose their jobs if the horticulture industry collapses from the effects of new taxes imposed on Kenyan exports to Europe, the country’s biggest market for fresh produce. Another 450,000, who depend on the sector’s employees could also lose their livelihoods after European countries forced Kenyan exporters to sell their goods at higher retail prices effectively pushing away potential customers. Industry players said they expected to incur losses of at least Sh1 billion a month if nothing is done to save the situation. Kenya, and the other member states of the East African Community (EAC), had up to September 30 to conclude and sign an Economic Partnership Agreement (EPA) with the European Union for goods originating from the region to continue enjoying preferential treatment in Europe. However, the deal miscarried after disagreements occurred on two levels. First, the five member states of the EAC could not agree on some issues among themselves. Second, the region could not reach an agreement with the EU. The result was that the region missed Tuesday’s deadline. LDCs That means Kenyan products will be subjected to a new regime of high taxation in Europe. However, Tanzania is unlikely to suffer the same fate because it is ranked among the Least Developed Countries (LDCs) which will continue to enjoy preferential treatment. “It is a total disaster. We are talking about new taxes of up to 15 per cent for some of our most popular products in Europe,” said Mr Stephen Mbithi,...