Is Kenya letting down the region by failing to lead the negotiations to conclude the Economic Partnership Agreements?

This is the big question facing East Africa as it enters 2010 without a binding trade agreement with the European Union, amidst mounting anxiety over how much longer the Community can continue trading “free” with the world’s largest economic bloc.

All fingers point at the country’s Ministry of Trade, which is expected to lead the region in the negotiations, but is now being accused of failing to show the way, yet Kenya would be the only loser in the event that Europe slapped duty on its imports dealing a devastating blow to some of its best established industries like horticulture.

Private sector sources, who cannot be named because of the sensitivity of the matter told The EastAfrican that since the Cotonou Agreement expired in 2007, there has not been any serious attempts to accelerate negotiations for a suitable trading regime, and Kenya does not seem to realise the importance of steering the process to conclusion.

The main problem, our sources indicate, are the frequent reshuffles that have taken place at the ministry since the troubled 2007 General Elections. Consequently, not much has been happening and the export industry is beginning to get anxious about the future of trade with the EU.
“It takes at least a year for top officials in the trade ministry to understand these matters making it impossible for a new minister or a PS to steer the talks,” our sources said.

Our efforts to get a comment from the Ministry of Trade was unsuccessful since all the officials were not in the office, while the current minister, Amos Kimunya’s mobile phone went unanswered.

It was these changes that took the region up to mid 2008 to get a one-year interim EPA in place, that was to ensure trade was not disrupted, to give the negotiators time to conclude the talks.

Came July 31, last year when the parties had been expected to pave way for a new trade regime, but nothing was put on the table.

According to our sources, Kenya missed several crucial meetings held in Brussels meant to build up a case for the conclusion of the EPAs because the new officials did not feel sufficiently knowledgeable to sit in the meetings, leading to the stalemate.

On its part, the European Commission was organising for elections with a new parliament expected to take office last November, therefore, either way, the EPA negotiations took a back seat.

Now, the EC has new office bearers who, like their EAC counterparts need time to acquaint themselves with the negotiation processes therefore, there is no telling when the talks will restart or when they will conclude.

In the meantime, the interim EPA which expired last July, still guides trade in the region, with the only conclusion being that the goods being traded between the two blocs are World Trade Organisation compliant.

Under the arrangement, EAC can sell any goods to the EU duty-free while from Europe, products that are produced in the region are not allowed save for essentials such as pharmaceuticals.

The industry now wants the parties to sign the interim EPA into a legal document until the full version is concluded to avoid creating a vacuum in international trade, should questions arise over its validity.

“We are all hoping for a breakthrough on the agreement framework when we meet next but the outcome will depend on the reality on the ground because there are divergent views and if consensus is not reached, then the contentious issues must be tackled first,” David Nalo, the permanent secretary at the EAC Affairs ministry was quoted saying in December.

The interim EPA was not endorsed by Brussels and the EAC Heads of State Summit because the 25 EU partner states needed to interpret it first.
In December 2008, the interim EPA came back to the EAC with an amendment that the bloc has been opposing — the Most Favoured Nations clause ostensibly meant to give the EU preference over other continents when it came to business deals.

The EAC remains opposed to the clause and has demanded it be removed arguing that it should be defined to indicate that it would apply only when it was cost effective.