TRADE

EU to consider concession for Kenya on stalled EAC export deal

The European Union says it will listen to Kenya’s proposal to move alone if the EAC fails to ratify the Economic Partnership Agreement as a bloc.

In Summary

•Tanzania, Uganda and Burindi are yet to ratify the deal, stalling the EAC-EU trade pact.

•Failure to secure a trade deal will see Kenyan exports to the EU attract taxes.

Presidents Uhuru Kenyatta and John Magufuli (Tanzania) in Uganda where they and other leaders attended the EAC Summit on February 23, 2018
WORKING TOGETHER: Presidents Uhuru Kenyatta and John Magufuli (Tanzania) in Uganda where they and other leaders attended the EAC Summit on February 23, 2018
Image: PSCU

Kenya could be allowed to secure its own preferential market access for exports to the European Union if the regional Economic Partnership Agreement fails to take shape, EU has signaled.

This comes amid continued delays by the East Africa Community(EAC) member states to ratify the EPA deal as a bloc, which would secure duty-free quota-free market access with the 28-member union.

While Kenya and Rwanda signed the EPA in September 2016, with Kenya ratifying the  pact the same year,Tanzania, Uganda and Burundi are yet to ratify the EPA.

 

For the EPA to enter into force, the three remaining EAC members need to sign and ratify the agreement. The delay is threatening Kenya's free market access for its exports to Europe.

EU ambassador to Kenya Simon Mordue  yesterday said Kenya could be allowed to go ahead solo under the "variable geometry" provision, which allows certain members states to implement trade agreements faster than others or before others which are not ready.

“Kenya is obviously very keen together with Rwanda to move forward and start this trading arrangement with European Union as quickly as possible because they full understand the benefits of this agreement,” EU ambassador to Kenya Simon Mordue said in Nairobi yesterday.

“You come to us and send a signal that there is a wish to pursue variable geometry. This  is something that the EU would look at very carefully and say how we would best be able to respond,” Mordue added.

Tanzania in  2016 rejected the deal on claims it was not aligned with its industrialization plans. It parliament passed a motion in November 2016 rejecting the EPA. However early this year, the government indicated it would consider the deal.

Burindi has on the other side stalled on political instability.

Mordue spoke during the 10th Kenya Editors' Guild Press Club, which addressed EU relations with Kenya with a focus on trade.

 

EU had earlier in July this year rejected Kenya’s proposal on variable geometry.

“Come back with that request and we will see what we can do to support you,” Mordue said.

All EAC countries are however currently accessing EU market duty and quota free under different arrangements.

This includes the Market Access Regulations (MAR) 1529, while Least Developed Countries enjoy access through the Everything but Arms arrangement.

The Heads of States Summit which has now been postponed to next year is expected to address the EPA deal with a push to have all countries commit to the pact. This would allow EAC enter into the deal as a bloc.

Kenya has the biggest stake in the EPA because of its middle-income country status and without securing a deal, its exports to the EU will start attracting numerous taxes making it uncompetitive.

 Kenya exports mainly agricultural products to the EU, notably cut flowers, tea, coffee,  peas and beans, with 21 per cent of Kenya’s exports going  to European Union market. Of these, 80 per cent of exports access EU quota free.