Attention shifts to President John Magufuli as Kenya
leads its integration partners to Arusha in a last-ditch effort to
safeguard its free trade arrangement with Europe, amid stiff opposition
from Tanzania
The East African Community’s extra-ordinary heads of state
summit follows a surprise move by Tanzania to pull out of an earlier
commitment that would see the bloc collectively sign Economic
Partnership Agreements (EPAs) with Europe before the September 30
deadline.
Kenya and Rwanda signed the pact in Brussels last
week while Uganda said it would append its signature on Thursday during
the Extra Ordinary Summit of the EAC heads of state.
That technically leaves out only Tanzania as
European Union had indicated it may not require Burundi to sign the deal
yet until it resolves its internal political problem.
South Sudan, the EAC’s newest member also does not
need to sign the pact until it completes the two-year bloc membership
assentation period.
As chairman of the bloc’s heads of state summit,
the decision made this week by President Magufuli will determine whether
Kenya’s exports face taxes of between four and 24 per cent to enter EU
market from October 1.
Kenya’s Industrialisation and Enterprise Secretary
Adan Mohamed who appeared before the EU Parliament’s International Trade
Committee believes the bloc will not tax Kenya’s exports once it sees
proof of commitment from EAC members.
“The proposed summit will provide further impetus
to the EPAs given the significance of the EU as a long term EAC trade
and development partner,” Mr Mohamed said in a statement last week after
his last-ditch effort to salvage the deal.
Kenya’s palpable expectation puts President
Magufuli between a rock and a hard place. As chairman of EAC’s top
organ, his partners in the bloc expect him to defend the shared customs
territory by endorsing EPAs.
But his country has consistently opposed the free
trade deal with Europe in the last 10 years. It argues that a clause in
the Economic Partnership Agreements (EPAs) seeking gradual opening of
80 per cent of the region’s market to EU products could derail
industrialisation in the region.
Benjamin Mkapa who ruled Tanzania as its third
President between 1995 and 2005 has particularly emerged as an ardent
critic of EPAs, discrediting the cocktail of agreement as precursor to
the latter-day scramble for Africa.
Renewed pressure from Kenya puts President Magufuli
in the unenviable position that his predecessor Jakaya Kikwete occupied
as chairman of the summit 10 years ago.
At the time, the bloc was haggling over a common
market protocol that sought to open borders to allow open competition
for jobs, land and capital among the region’s citizens against a stiff
opposition from Tanzania. The protocol was later launched six years ago
after Tanzania won major concessions.
Earlier, Kenya had to cajole its unwilling partners
to join EAC customs union in 2005 by immediately opening its market for
Tanzania and Uganda while its goods continued to attract border taxes
for five years before the two states began to reciprocate the same tax
free treatment from 2010.
In the present case, the World Trade Organisation has
outlawed the one-sided preferential market access that Europe has
extended to its former colonies for years, forcing beneficiaries to
adopt reciprocal arrangements.
All the African, Caribbean and Pacific (ACP) States have to
sign EPAs to safeguard their economic relations with EU except those
grouped as Least Developed Countries (LDCs)
Among the six EAC members, only Kenya — grouped as a
developing state — is a non LDC member. Official data produced by trade
ministry indicates preferential trade with EU has fuelled a booming
business that supports over 200 firms in Kenya with Sh224 billion (€2bn)
worth of investments.
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