Tax window opens as accord with EU flops

European Union to Kenya (EU) Ambassador and Head of Delegation Lodewijk Briet gestures during a press briefing on March 18, 2014. The much-awaited signing of an economic partnership deal between the East African Community and the European Union has flopped following failure by the two parties to agree on three key points. PHOTO/FILE

In Summary
The aborted meeting in Nairobi failed to clear the way for signing of a permanent pact with EAC’s most important trading bloc on a new Economic Partnership Agreement with East Africa.
A statement from the EAC secretariat named five points which were not agreed upon at the technical level.


 By Nation Reporter
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The much-awaited signing of an economic partnership deal between the East African Community and the European Union has flopped following failure by the two parties to agree on three key points.

They include EAC’s adherence to certain governance benchmarks, export taxes and market access.

This paves the way for European states to introduce taxes on the region’s produce.

The aborted meeting in Nairobi failed to clear the way for signing of a permanent pact with EAC’s most important trading bloc on a new Economic Partnership Agreement with East Africa.

It was slated for signing in Brussels this week during an EU/ African heads of state summit from today until Friday, April 3. President Kenyatta is attending the meeting.

A statement from the EAC secretariat named five points which were not agreed upon at the technical level.

They have now been escalated to the ministers’ round of talks to be held later in mid May ahead of the expiry of the tax-and-quota-free trade on October 1.

Should the East African Community fail to conclude the agreements, previously tax exempt products — cut flowers, fruits, fish, beans, coffee and tea to the European Union would attract duty ranging from 8.5 per cent to 14.5 per cent, making them less competitive and significantly cutting returns to growers.