Kenya signs EU trade deal, warns it may still lose market access
01 September 2016, 18:23
Nairobi - Kenya signed a trade deal that will keep the door open to European markets, as it warned that the failure by other countries in the East African Community to follow suit could lock it out of the key export destination.
The six-nation bloc has been negotiating a so-called Economic Partnership Agreement, or EPA, with the European Union since 2007, a pact that will give it duty- and quota-free access for produce including flowers, fruit and vegetables. The EAC groups Kenya, Tanzania, Uganda, Rwanda, Burundi and South Sudan.
“If the EPA is not signed and ratified by all EAC partner states by Sept. 30, Kenya stands to lose its market to the EU, having significant impact on her economy,” Kenyan Trade Minister Adan Mohamed said in an e-mailed statement.
Mohamed was at the EU parliament on Wednesday where the possibility of blocking Kenyan imports from Oct. 1 was discussed. While Kenya’s neighbors will still be able to export to Europe under the EU’s Everything But Arms program, because they’re classified as least developed countries, East Africa’s biggest economy won’t have the same benefit.
More than 200 companies in Kenya with investments worth in excess of 2 billion euros ($2.2 billion) are exporting flowers, vegetables and fish to the EU, according to the statement. More than 4 million people benefit from the industries, it said.
Rwanda’s trade minister also signed the agreement in Brussels on Thursday, according to the statement. The East African, a regional newspaper, reported this week that the nation’s trade minister had warned of cracks in the EAC should other nations fail to sign the agreement before the deadline.
Tanzania informed the EU in July that it won’t sign the EPA, former President Benjamin Mkapa said in an opinion piece in the East African’s July 30 edition.
“The agreement is antithetical to Tanzania’s as well as the region’s trade and development prospects,” Mkapa wrote. “The EPA for Tanzania and the EAC never made sense. The maths just never added up. The costs for the country and the EAC region would have been higher than the benefits.”
An EPA would force Tanzania to remove tariffs on 90 percent of EU non-agricultural imports into the gas-producing nation. Under the current Everything But Arms program, the $44.9 billion economy already exports without restrictions, giving it no incentive to adopt the EPA, Mkapa said.
Kenya’s Mohamed made a “concerted presentation” to the EU parliament’s International Trade Committee and “assured them of the EAC partner states’ commitment to the EPA as demonstrated by over nine years of consistent engagement with the EU leading to the successful conclusion of the EPA,” according to the trade minister’s statement.