A waiting game for Kenya over stalled EAC-EU trade deal

Saturday July 20 2019

The European Union is Kenya’s biggest export destination for cut flowers

The European Union is Kenya’s biggest export destination for cut flowers, French beans, fruits, fish, textiles, coffee and tea. FILE PHOTO | NMG 

JAMES ANYANZWA
By JAMES ANYANZWA
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Kenya was last week putting up a brave face after the European Union rebuffed its plan for a variable geometry in the signing of the Economic Partnership Agreement with the East African Community.

Nairobi has the biggest stake in the EPA because it is a middle-income country and, without the protection of the deal, it would have to start paying duty for its exports to Europe. Kenya exports mainly cut flowers and vegetables to the EU.

Principal Secretary in the Department of Trade Chris Kiptoo was oozing confidence, as Kenya still enjoys a timeless access to the EU market under the Market Access Regulations (MAR) 1529. It allows developing countries that are still negotiating EPAs to access the EU market until the agreement is signed.

“Kenya’s market access to the EU remains safe in the foreseeable future until all EAC partner states sign the EPA,” said Dr Kiptoo.

The bloc’s member states still hold the key to the stalled trade pact after failing to reach a consensus on the EPA, due to varied economic and political interests.

Meanwhile, all EAC countries are accessing EU market duty and quota free, with Kenya under the MAR and the others—which are considered Least Developed Countries—enjoying the Everything but Arms arrangement. Kenya now hopes that its partners will sign the pact in the interest of regional integration.

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“Now that the EU has said it will go with the original decision for all EAC members to sign, then we just have to wait. I’m optimistic that Tanzania will sign the EPA as and when it is ready,” said Dr Kiptoo.

However, Tanzania has raised reservations about the economic implications of the trade pact.

The EU insists that Dar’s concerns have been addressed and it is upon the EAC member countries to agree on the way forward as a bloc.

The EU ambassador to Kenya Stefano Dejak told The EastAfrican that the EU is awaiting formal communication from the EAC to decide how to proceed, “taking into consideration any relevant developments within the EAC itself.”

The EU in 2017 cautioned the EAC against signing the EPA as individual countries rather than a bloc, arguing this would undermine regional integration.

But, early this year, Kenya tabled a proposal before the EAC Council of Ministers seeking to be allowed to implement its own trade agreement with the EU as other partner states sort out their issues.

Although Kenya settled for the principle of variable geometry, the proposal had to get the backing of all the EAC member states, which it did not.

Uganda, which has expressed interest to sign the agreement, is keen on the on the principle of solidarity, which requires all countries to sign.

Negotiations for the regional EPA were successfully concluded on October 16, 2014 and all EU member states signed the agreement as a bloc.

The deadline for all EAC countries to sign the agreement had originally been set for October 1, 2016, but the EAC Summit asked for more time for the region to study the implications of the EPA on its manufacturing sector.

Currently, Europe is East Africa’s largest export destination but in terms of imports, the EU ranks third after China and India.

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