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MPs save Kenya Sh800m export duty in EU market

James Momanyi and Conrad Onyango @PeopleDailyKe

The National Assembly yesterday saved Kenya from incurring a whopping monthly duty of Sh800 million for its exports to the European Union (EU) next month after the House unanimously ratified the Economic Partnership Agreement (EPA) ahead of the October 1 deadline.

Industry, Trade and Investment Cabinet secretary Adan Mohamed said the consequences for Kenya could have been dire if Parliament had failed to ratify the document, even as it awaits the rest of the EAC states—Tanzania, Uganda and Burundi— to sign the treaty. Rwanda has signed the treaty but is yet to ratify it.

“While our other partner states in EAC will not be affected even if they do not sign and ratify the treaty before October 1 since they are considered Least Developed Countries (LDC), Kenya could have lost the duty-free and access-free market by September 30 because we have been accessing the EU market under a separate trade regime as a middle-income country,” said the CS.

“This could have made our exports uncompetitive in the EU market since they could have attracted duty of up to 22 per cent. This could have been a major hit on our economy because when we faced a similar situation in 2014 for three months, our exports were attracting a duty of up to Sh800 million a month,” he added.

National Assembly’s finance committee chairman, Benjamin Lang’at said the contentious issues including export taxes and good governance have been resolved. “It is now critical for us to approve ratification of the agreement because Kenya is strategically positioned to benefit from the deal,” Lang’at said during the special sitting of Parliament to approve the EPA.

Leader of Majority Adan Duale told legislators Kenya had a window to consult with regional economic partners whether to seek bilateral or multilateral arrangement on the deal initiated in 2008. Ugenya MP David Ochieng’ said the country should, however, be prepared to take advantage of the free market to benefit traders and local businesses.

“How the government responds by offering traders competitive operating environment is now critical,” he said. Lack of a structured system in the sugar industry, he said, has denied Kenya capacity to meet quotas set by foreign markets, stressing value addition and diversification of product offering will help grow the country’s market share.

Seme MP James Nyikal said it would have been catastrophic not to ratify the deal. “The agreement ties the economy to flexible negotiations that relieves us of competitive environment in EU markets.

We can actually negotiate on certain conditions,” he said. Mohamed calmed concerns that Kenya, and by extension the EAC market, opening its market will lead to the flooding of the market with EU imports , which may cause job losses and other undercurrents.

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