The economic partnership agreement (EPA) between the European Union and the East Africa Community was a sticky issue during the 20th Heads of State Summit in Arusha on February 1.
The EastAfrican has learnt that during the closed-door session, the discussion on the EPA took a the most time, with Tanzania insisting that it must be allowed more time to send experts to EU headquarters in Brussels, Belgium, to present its grievances.
Tanzania has been unhappy about the trade pact, arguing that the agreement will have serious consequences on its revenues and the growth of its industries.
Burundi, which was sanctioned by the EU after political unrest when President Pierre Nkurunziza ran for a controversial third term in 2015, has also maintained that it will not agree to sign the trade deal, given its deteriorating relations with Europe.
Uganda, on the other hand, has argued that signing the pact as individual countries would compromise the unity of the region, hence its decision to wait it out.
The EPA is a trade deal between the two blocs, which gives EAC products total access to the EU market, with 82.6 per cent of imports from the EU allowed on the EAC market.
The remaining 17.4 per cent of imports from the bloc, which are labelled “sensitive,” are largely farm and dairy products and are set to be progressively liberalised within 15 years from the moment the agreement enters into force.
Negotiations for the EPA were concluded on October 16, 2014 and all EU member-states and the EU itself signed it.
The deadline for the signing by EAC countries had originally been set for October 1, 2016, but the EAC Summit, which was then chaired by Tanzanian President John Magufuli, asked for more time for the region to study the implications of the pact on its manufacturers.
Kenya 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 flowers and horticultural produce.
The other EAC member-states are classified as Least Developed Countries and can export anything but arms to Europe duty-free.
Kenya is now lobbying its EAC partners to enforce the EPA on an individual basis rather than as a bloc to allow those that have not signed to sort out their issues.
Experts warn that signing the agreement as individual countries would weaken the region’s rules of origin and give rise to partner states operating on different trading regimes, a situation that is likely to compromise efforts towards regional integration.
According to a source privy to the discussions in Arusha, Kenyan President Uhuru Kenyatta was pushing his peers to sign on to the deal at the Summit.
“President Kenyatta said he could not go back to tell Kenyans that the EAC leaders had, once again, failed to sign the crucial deal,” the source said.
The Summit, however, decided to allow Tanzania four months to resolve its issues.
Another matter that came up was trade barriers, with the longstanding dispute between Kenya and Tanzania over tobacco being discussed at length.
Tanzania levies 80 per cent duty on Kenyan tobacco. Confectionery, too, attracts duty with the Dar administration saying that the industrial sugar used in the manufacture of these goods would not be given duty-free access.
The Summit tasked the ministers of trade to discuss the matter and find a solution.