Sigh of relief as Europe gives East Africa four months to sign EPA

 

Kenya's Deputy President William Ruto (left), Tanzania's President John Magufuli (centre) and his Ugandan counterpart Yoweri Museveni (right) during an East African Community extraordinary summit on September 8, 2016 in Dar es Salaam. PHOTO | DPPS 

By JAMES ANYANZWA

In Summary

• The European parliament extended the deadline to withdraw Kenya’s preferential market access to the EU market to February 2, 2017 after the country signed the Economic Partnership Agreement (EPA), demonstrating its commitment to the trade pact.
• The deadline to remove Kenya’s preferential market access privileges had been set for October 1, meaning that from October 2 Kenyan exports to the EU would have been subject to duties, which would have made them less competitive.
• However, The EastAfrican has learnt that it is unlikely that Tanzania will relax its hardline stance during the three months and the EAC Council of Ministers is considering a proposal for variable geometry, where member states would be allowed to sign the agreement at different times.

Kenya has received a four-month reprieve to ratify the trade agreement it signed with the European Union in Brussels on August 29, providing a ray of hope for exporters whose shipments to the EU market would have started attracting duty after October 1.

The European parliament extended the deadline to withdraw Kenya’s preferential market access to the EU market to February 2, 2017 after the country signed the Economic Partnership Agreement (EPA), demonstrating its commitment to the trade pact.

“We remain committed to the Economic Partnership Agreement reached with the East African Community, which we still expect can be signed and applied by all concerned countries. The signature process is ongoing with the region desirous to move ahead in unison. Meanwhile the free market access of Kenya, which has signed the EPA, is extended beyond 1 October until the beginning of January 2017,” said Stefano A Dejak,  European Union Ambassador to Kenya.

However, some EU Members of Parliament said Kenya has been given up to February next year to have the deal signed by all EAC countries.

European Union MPs who revealed the four-month extension are Helmut Scholz and Marie Arena. The deadline to remove Kenya’s preferential market access privileges had been set for October 1, meaning that from October 2 Kenyan exports to the EU would have been subject to duties, which would have made them less competitive.

The EU is Kenya’s biggest export destination, taking up cut flowers, French beans, fruit, fish, textiles, coffee and tea.

“We persuaded the EU parliament not to lock us out of the preferential terms and our request was accepted. We will now take the document to the Kenyan parliament for ratification so as to make it legal,” said Dr Chris Kiptoo, Kenya’s Principal Secretary in charge of Trade.

Lawmakers from the EU parliament also told an ongoing conference in Arusha that the deadline for signing the EPA has been extended from October 2016 to February 2, 2017.

The deadline for the EAC member states to sign the trade agreement as a bloc was set for October 1, 2016 but there has been resistance from some countries.

Kenya and Rwanda have already signed the agreement while Uganda has expressed a commitment to append its signature. 

Tanzania has refused to sign, saying the agreement would have serious consequences for its revenues and the growth of  its industries.

Burundi, which has been sanctioned by the EU following political unrest, said it would not sign the trade deal, given its currently deteriorating relationship with Europe.

Related stories

• Kenya, Rwanda sign EPA deal with Europe
• Uganda makes U-turn, says ready to sign EPA
• Burundi says will not sign EPAs; Dar mulls decision

The trade deal requires that all EAC states commit to it for it to take effect.

The EPA negotiations have been undertaken by the EAC as a bloc in line with Article 37 of the Protocol on the Establishment of the East African Community Customs Union and the Summit decision of April 1, 2002.

The Protocol provides that EAC partner states negotiate as a bloc on matters pertaining to participation in the World Trade Organisation and ACP-EU arrangements (under the Cotonou Partnership Agreement between the ACP Group of States and the European Community).

The EAC heads of state last week requested a three-month extension to deal with the concerns of some of the remaining partner states before signing EPA as a bloc.

READ: EAC seeks extension on signing trade deal with Europe

The 17th Extraordinary Heads of State Summit called upon the the EU not to punish Kenya and directed the EAC Secretariat to communicate to EU on this matter.

However, The EastAfrican has learnt that it is unlikely that Tanzania will relax its hardline stance during the three months and the EAC Council of Ministers is considering a proposal for variable geometry, where member states would be allowed to sign the agreement at different times.

“I think we will request the Summit to consider a proposal for countries to sign the agreement at different times if some are not ready. There is a need to adopt a flexible approach if people are not ready,” Betty  Maina, Kenya’s Principal Secretary  in charge of East African Affairs, said.

“It is unlikely that after the three-month period we shall have a fundamental change of country positions,” she added.

Kenya has been exporting products to the EU market under the Market Access Regulations (MAR) since 2007, but this was to be abolished on October 1.

It is feared that failure to  sign EPAs as a bloc would give rise to partner states operating in  different trading regimes.

Kenya is classified as a developing country, while Uganda, Rwanda, Burundi and Tanzania are considered Least Developed Countries. Failure to sign EPAs would mean that Kenya’s exports to the EU market would now start attracting duty under the Generalised Scheme of Preference granted to developing countries.

Additional reporting by Julius Barigaba.