Kenya may pay between five and 22 per cent taxes on its exports to Europe after Tanzania failed to show up yesterday for the signing of the Economic Partnership Agreement with the EU.
This is the second time Tanzania has jeopardised the deal, after 2014, which would give the East African Community duty free and quota-free market access to the EU.
Kenya,Uganda, Burundi and Rwanda turned up yesterday and had hoped Tanzania would too.
In 2014, Kenya was placed under the General System Preference trade regime for three months – the private sector made Sh600 million per month – before successfully lobbying to be reinstated to duty free status.
About 87 per cent of Kenya’s exports – in agriculture and manufacturing industries – to the EU valued at Sh98 billion were affected, according to the Foreign Affairs ministry.
Foreign Affairs CS Amina Mohamed said Kenya will continue to engage other EAC member states to find a solution on the deal.
“It can’t be signed now because we have not all agreed, but we are hoping that we can do it in the near future. We have two more weeks until August 4. We are engaging with everyone to make sure that all of us agree at the same time,” she said.
The ratification deadline by the European Commission is October 1.
Tanzania Foreign Affairs PS Aziz Mlima two weeks ago said his government will not sign the deal as it needs to monitor the British exit from the EU.
UNCTAD secretary general Mukhisa Kituyi said the failure to sign the deal “has no implications to the conference”.
“East Africa did not come together because of an economic partnership agreement with Europe. Growing a partnership with Europe is a secondary matter,” he said and called for regional integration.