East African leaders fail to agree on trade deal with Europe

Saturday September 10 2016

Failure by the EAC countries to sign the

Failure by the EAC countries to sign the agreement as a bloc would see Kenyan products in the European market start attracting duty due to its status as a developing nation. PHOTO | FILE 

By BEATRICE MATERU

The extraordinary summit of the EAC Heads of State held last week failed to convince a sceptical Tanzania that the Economic Partnership Agreements are good for its economy.

Dr Augustine Mahiga, Tanzania’s Minister for Foreign Affairs, said Dar es Salaam will not sign the EPA because it has nothing significant to offer the country.

Kenya, which had already signed and was wooing Dar es Salaam to ink the deal, will have to wait for January 2017 for a final decision.

After a lengthy discussion, the heads of states requested and were allowed an extension of three months to January to allow further discussions over contentious issues and renegotiate the deal with European Union in the best interests of all EAC Member states.

This means the bloc has two options — either to sign collectively as a bloc or separately — as Kenya and Rwanda have already signed while Uganda and Tanzania have refused to sign.

“We have given ourselves three months to discuss further the signing of the EPA agreement and we will meet in January 2017 over this issue.

“We will not fail to agree, and I believe as a regional bloc, the solution we reach will be a win-win,” said Dr John Magufuli, the Tanzanian President and chairman of the East African Community.

President Magufuli said countries should make sure that the deal is in the best interest to their economies and won’t turn the bloc into a damping ground for European goods.

Tanzania, which has opposed the free trade deal with Europe, argued that a clause in the EPAs seeking the gradual opening of 80 per cent of the region’s market to EU products could derail industrialisation in the entire region.

Former Tanzania’s president Benjamin Mkapa had noted that the costs for Tanzania would be higher than the benefits.

Tanzania, which is implementing its industrialisation plan, hopes to make the country a semi industrialised nation by 2020, and rely on import duty to finance its 2016/17 budget.

Common stand

Despite the differences over the free trade agreement, the East African Community member state came out determined to take common stand on the matter.

“This Community makes each of us stronger than we could ever be working individually.  However that requires that we always remain together by working in a spirit of flexibility that allows us to adjust costs whenever and wherever necessary as we move forward. The bottom line is that the decisions we make as the bloc should not make any of us worse off,’’ said President Paul Kagame of Rwanda.

According to Kenyan Deputy President William Ruto, who represented President Uhuru Kenyatta, “Our decision to move together is a decision that is not debatable,’’ he said. Kenya, which is the only East African country not categorised as Least Developed, is likely to benefit from the EPA due to its developed manufacturing sector and cut flower exports to the European market.

Nairobi has signed the deal and is persuading other EAC countries to sign, but Tanzania and Burundi remains adamant. Rwanda has also signed the deal while Uganda is weighing its options.

“The summit called upon the EU not to penalise Kenya and directed the Secretariat to communicate to the European Union on the matter,” reads a communiques signed by the EAC heads.

“The EU should not punish Kenya just because it is two inches taller than other countries in the bloc,’’ said Ugandan President Yoweri Museveni.