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Kenya at the mercy of EU on trade deal

Kenya’s hope to build a shared customs with its East African neighbours is still in limbo as three countries in the bloc continue dilly-dallying to sign a crucial pact with the European Union (EU).

Failure by Tanzania, Uganda and Burundi to sign the Economic Partnership Agreements (EPAs) to end uncertainty with the EU is a worry to Kenya as it would result into the latter being slapped with high taxes as the duty-free market regime ends.

The reluctance by the three East African Community (EAC) member states will be part of issues to be discussed during next month’s EU summit in Brussels, Belgium.

A senior official in the Ministry of Industry, Trade and Co-operatives confirmed that Uganda President Yoweri Museveni, the current EAC Chairman last month formally submitted to the European Commission President Jean-Claude Junker a list of issues the three countries want addressed before signing the agreement.

Our source who happened to have attended the meeting on September 27 said Junker promised to respond to the issues next month. The meeting followed a summit held by the EAC head of states in Arusha, Tanzania on May 20, that mandated the bloc’s chairman to engage with EU to address concerns that some EAC partner states are not comfortable with before signing the EPAs as a group.

Should the countries refuse completely to sign the trade agreement, analysts warn that Kenya will lose the most as it would be slapped with a wave of taxes on produce entering the EU market.

Since the other four member states are categorised as least developing countries they will continue enjoying duty and quota-free access to the European Union market.

Kenya is categorised as the only developing country in the region. The renewed EAC and EU engagement will pave way for a regional approach to signing and implementation of the EPAs. Some trade analysts claimed that EU is getting anxious over the continued delay by some EAC members to sign the agreement.

However, when contacted, Industry, Trade and Co-operatives Cabinet Secretary Adan Mohamed said Kenya signed and ratified EPAs last year guaranteeing free market access to the EU market. “Kenya signed and ratified the EPA agreement with EU.

We would not have done that if market access is blocked,” he said. He added: “We have market access to EU based on our signing and ratification. Anything else is false.”

However, in the event that an acceptable way forward is not reached with the EU within the next six months, the EAC summit authorised the chairperson to explore the use of variable geometry in implementation of the EPA by EAC partner states working with the council of ministers. “Kenya and Rwanda signed the agreement in August 2015 with Kenya ratifying the same in September last year.

The move by Kenya was aimed at securing Kenya’s duty and quota free market access in the EU,” Mohamed said. Rwanda even though has signed the trade deal is yet to ratify it while Uganda has expressed a commitment to append its signature on the deal but insists that all the EAC member countries must be on board first.

Whereas Burundi has declined to sign the agreement demanding EU first withdraw sanctions it imposed last year following political upheavals in the country.

Tanzania delays the full actualisation of the pact claiming it would have serious consequences for its revenues and the growth of its industries. Further Tanzania wants definition of parties as cited in the pact clarified and also has an issue with the development agenda as enshrined in the agreement.

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