Kenya plans fresh talks to win EAC support for trade deal with Europe
Wednesday July 27 2016
Kenya plans a new round of talks next month in a last-ditch attempt to convince the other members of East African Community (EAC) to sign an agreement for local goods to continue enjoying duty-free access to European market.
Kenyan officials Tuesday downplayed fears that the EAC trade bloc will miss the October 1 deadline set by the European Union secretariat, in what would introduce duty and quotas on Kenyan exports to Europe, making them uncompetitive.
This came after Tanzania recently said it would not sign the Economic Partnership Agreement (EPA) with the European Union that grants regional goods duty-free access to Europe, citing Britain’s exit from EU. Uganda has said it is still reviewing the terms.
According to EPA terms, the EU can only strike a trade deal with a bloc comprising several nations, meaning a single country cannot go it all alone. This has limited Kenya and Rwanda that are willing to sign up.
“We are optimistic that the talks planned for early August will be fruitful and beat the deadline,” Kenya’s Industrialisation and International Trade secretary Adan Mohamed said at a press briefing. The bloc had expected to strike a deal on July 18 in Nairobi but the plan failed.
Failure to reach a deal spells doom to thousands of workers involved in cut flowers, fruits, fish, beans, coffee and tea which are mainly exported to the EU.
The lapse of the existing interim preferential trade deal without another arrangement would mean imposition of import duties on Kenya’s fresh produce entering Europe.
The previously tax exempt products would attract duty ranging from 8.5 per cent to 14.5 per cent, making them less competitive and significantly cutting the returns to growers.
A lack of commitment by Tanzania has in the past delayed the signing of the pact.
Unlike Kenya, which is a developing nation, the other EAC members will continue to enjoy duty-free access to the EU market under the Everything-But-Arms arrangement accorded to the least developed nations like Uganda, Rwanda, Burundi and Tanzania.
The EU last month entered a deal with Southern African Development Community (SADC). The interim preferential trade arrangement between EU and Kenya, Uganda, Tanzania, Rwanda and Burundi was signed in 2007 after the expiry of a similar programme by the World Trade Organisation (WTO) the same year.