By GEORGE OMONDI
In Summary
A cloud of secrecy shrouds proposed free trade pact
with Europe even as the region’s presidents gather in Dar es Salaam
today to make their final decision.
Except for its versions leaked earlier, the details of the
final Economic Partnership Agreement (EPA) draft that East African
negotiators settled for in July has remained a closely guarded secret of
a small clique of government officials.
Kenya and Rwanda signed the deal in Brussels two
weeks ago while Uganda is set to confirm its approval today at the
extraordinary summit of East African Community (EAC) heads of state.
“The 17th extra-ordinary meeting will be
considering the Council of Ministers report on EU-EAC Economic
Partnership Agreement,” the EAC secretariat said in a statement.
The ministers’ report had recommended collective
signing of the EPA to safeguard EU market that accounted for 32 per cent
of Kenya’s Sh1.577 trillion exports in 2015 but Tanzania later pulled
out of the deal.
Today, at the summit chaired by President John
Magufuli, President Uhuru Kenyatta will most likely push for Tanzania’s
signature after Kenya said its 200 firms and four million jobs are at
stake.
As the haggling continues, the region’s citizens
remain helpless bystanders. A lack of mass participation has relegated
public discourse to a two-side showdown between Tanzania — led by former
President Benjamin Mkapa — and Kenya (read flower industry).
Mr Mkapa, board chairperson of South Centre, a
regional economic think-tank, maintains that, among other things, EAC
stands to lose Sh25.1 billion per year in tax revenues if it signs EPA
to cushion Kenya from EU taxes totalling Sh10 billion a year.
According to Kenya’s EAC ministry, the EAC states
will gradually open up 82.6 per cent of its total trade European Union
firms in 25 years under EPA. The previous drafts had proposed a 15-year
period for trade liberalisation.
Tanzania
It is also known that after opposing EPA’s
most-favoured nation clause for several years, the EAC negotiators
eventually embraced the EU position that compels any EAC state to extend
any trade concession made to third countries to the European firms.
That means a country such as Tanzania — which
belongs to South African Development Community (SADC) — has to treat EU
firms the same way it treats those from its southern Africa neighbours.
Tanzania is one of the SADC states which declined to sign EPA in 2014.
Throughout the 14 years of EPA negotiations, export
taxes remained a contentious issue. The EU side — which buys mainly
unprocessed goods from developing states — had bargained for its
elimination while EAC which sees the tax as one way of encouraging
industrialisation (by making export of raw materials costly) campaigned
for retention
Only government officials can tell how that issue was resolved.
“The EAC-EU EPA has been negotiated and agreed to by the
EAC’s best trade negotiators over a period of 14 years,” argues Kenya’s
EAC Integration PS Betty Maina in an opinion piece published in the
current edition of the EastAfrican.
Ms Maina has previously lobbied for EPA as chief
executive of Kenya Association of Manufacturers. “The negotiations were
arduous and thorough,” she said.
Both EAC and EU sides have, however, confirmed that
EPA does not liberalise agriculture. They have also agreed on rules of
origin that benefit countries depending on their level of development.
Also unclear are details of capacity building, transparency in public projects and good governance which the EAC had opposed.
omondi@ke.nationmedia.com
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