East Africa summit to discuss EU trade pact
East African leaders will meet in the Tanzanian town of Arusha on Feb. 28 to discuss the Economic Partnership Agreements (EPAs) that allows regional countries to export its agricultural products to Europe without attracting tax.
Chris Kiptoo, Kenya's Principal Secretary in charge of Trade said Monday the matter is one of the agenda to be handled by the heads of state during the summit.
Kiptoo explained East Africa Community (EAC) countries are supposed to sign as a bloc so that they can enjoy quota and duty free market access.
"All the EAC countries ought to have signed the EPAs as a bloc with the European Union (EU) by Feb. 2. The deadline is over but only Kenya has signed and ratified and Rwanda has only signed," he said by telephone.
Tanzania has refused to sign, claiming the agreement would have serious consequences for its revenues and the growth of its industries.
Uganda has expressed a commitment to append its signature while Burundi which has been sanctioned by the EU following political upheavals, says it will not sign the trade deal until the sanctions are withdrawn.
Tanzania demands renegotiation of the some of the EPAs clauses. Further, Tanzania needs clarification on loses to be incurred after the liberalization of trade.
Kenya is the only country categorized as developing nation within the bloc while the other four are classified as least developing countries.
Trade analysts have warned that Kenya will lose the most and slapped with a wave of taxes on produce entering EU market as the other member states will continue getting duty and quota free access under EU's Everything but Arms initiative.
EU is Kenya's biggest export destination, taking up cut flowers, French beans, fruit, fish, textiles, coffee and tea.
However, Kiptoo explained that Kenya has no issue to raise during the summit on the EPAs as it has already signed and ratified the trade pact with EU.
"As required under the principles of the EPAs, Kenya has signed and ratified the trade protocol only waiting the other partners to follow suit. But all the EAC countries are individually supposed to sign and ratify the trade deal and collectively sign the document with the EU," said Kiptoo.
Under the EPA, Kenya is classified as a developing country while the other EAC states are classified as Least Developing Countries and so their goods will still access the EU market duty free even if they don't sign the agreement.
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. EU parliament on request by Kenya agreed to extend deadline to signing the EPA from October 2016 to Feb. 2.
The deadline is over and only two countries have signed. Kiptoo stated that the state of the other countries will be known during the summit later this month whether they will sign or not.
In the event they don't sign, the EAC summit has to agree on the next course of action and communicate the same to the EU parliament for further action.
If the summit agrees that Kenya be allowed to continue implementing the trade deal as the other organize how to sign, Kiptoo stated the implementation will have limitations owing to the bloc being a customs union territory.
"We are optimistic the other EAC countries will sign and ratify the agreement to allow smooth implementation and trading with EU," he added.
Nelson Ndirangu, Director of Economic Affairs and Diplomacy in the department of International Trade said that failure by the other EAC countries to sign the trade pact is delaying the full actualization of the pact and development.
But Ndirangu stated that the EPAs agreement provides for amendment only after the member states have signed and started implementation of the deal.
Further if a country wants to withdraw from the trade deal with EU it has to give a six-month notice.
Kenya Flower Council chief executive officer Jane Ngige said full benefits of the EPAs cannot be enjoyed until the agreement is fully enjoyed.
She warned that if the agreement is not signed as required, Kenya will face more consequences on its trade with EU.