News
EPA: Kenya’s fate now lies with heads of state
Kenya has left the fate of the controversial Economic Partnership Agreement with the European Union in the hands of the EAC heads of state, whose meeting was rescheduled to next month.
The Extraordinary Summit would have been held this week but Tanzania cancelled at the eleventh hour a ministerial summit that would have sought to resolve the EPA dispute.
Tanzania said it was not ready to participate in the EAC Council of Ministers meeting that was to be held from August 17-20, partly informing the agenda of the Summit.
Kenya had hoped to persuade Uganda and Tanzania to sign the EPA in order to safeguard its preferential export status to the EU.
“The EAC Heads of State Summit decided that the region negotiate with the EU as a bloc. If we have to do otherwise then it requires the summit’s decision,” Dr Chris Kiptoo, Principal Secretary in-charge of Trade in Kenya’s Ministry of Industry, Trade and Co-operatives told The EastAfrican.
Dr Kiptoo said he did not have details on why the meeting was deferred.
“I’m still trying to get details on their decision. Of course, that is not good for us [Kenya]. The more we delay, the more we get worried because we are getting closer to the deadline,” said Mr Kiptoo.
Options
The deadline for the East African countries to append their signatures to the trade agreement is October 1.
The EastAfrican has learnt that during the September summit the heads of state will consider three options:
-
First, the presidents could decide to sign the agreement as a bloc and pave way for provisional application of the agreement based on the resolutions by the Council of Ministers pending ratification of the agreement by the respective parliaments according to Article 139 of the EPAs treaty.
-
Second, they could reach a consensus and request the EU to allow those countries that are ready like Kenya to sign the agreement and let others join later under the geometrical variability rules.
-
Third, the EAC member states could request for a delay in the EU Market Access Regulations (MAR) to allow them time to sort out their problems, meaning that, if this request is granted, EAC products would still enjoy quota-free, duty-free access to the EU market after October 1.
President Yoweri Museveni alluded to the latter option on Thursday during a meeting with the East Africa Legislative Assembly speaker Dan Kidega, when he said he was interested in seeing how Kenya can retain its EU duty-free export status even without signing the EPA.
“I am interested in seeing how Kenya can be accommodated and especially if it can trade under Everything But Arms (EBA), which the rest of the partner states can,” President Museveni said.
Mr Kidega had said Kenya should not sign the EPA alone as this would go against a resolution of the regional parliament in 2008 for joint negotiations of international agreements and treaties that affect the bloc under the Trade Negotiations Act.
Mr Kidega said the issues raised by Tanzania and Burundi should be addressed so that every country was on board before signing the EPA.
“One major concern is Brexit and its implications, which we as a region need to take cognisance of. The other concern is the decision by the EU to blockade Burundi from enjoying the benefits of trade,” Mr Kidega said.
Failure by the EAC countries to sign the agreement as a bloc would see Kenyan products in the European market start attracting duty due to its status as a developing nation.
Its regional counterparts – Tanzania, Uganda, Rwanda and Burundi – which are classified as least developed countries (LDCs) would continue enjoying duty-free quota-free access to the EU market under the Everything But Arms protocol.
Tanzania, East Africa’s second largest economy, had expressed reservations that signing the agreement would not benefit local industries but would instead lead to their destruction with developed countries controlling the market.
“If we don’t sign this agreement, our industries are going to lose out heavily, particularly the flower sector,” Mr Kiptoo said.
It is estimated that over one million people in Kenya depend on the flower sector both directly and indirectly.
GSP+
Sources told The EastAfrican Kenya could be forced to negotiate for the EU’s preferential trade scheme dubbed GSP+, which allows products from vulnerable developing countries to access the EU market quota free duty-free.
However it is feared that negotiations will take up to 10 months and this decision would undermine its trading arrangements with other EAC member states.
“We are not keen to go to GSP+ because we don’t want to jeopardise other markets,” said the source.
The GSP+ is a component of the EU Generalised Scheme of Preferences (GSP) for developing countries that offers additional trade incentives to developing countries already benefiting from GSP to implement core international conventions on human and labour rights, sustainable development and good governance.
The scheme rewards developing countries that commit to implementing those conventions by granting duty reductions on exports to the EU on some 6,000 tariff lines. Kenya has signed all but two of the conventions – the ones on genocide and labour.
The beneficiaries of this scheme include countries such as Armenia, Bolivia, Cape Verde, Costa Rica, Ecuador, Georgia, Mongolia, Paraguay and Peru.
To be considered under the special trade arrangement countries must meet the vulnerability criteria and ratify 27 international conventions.
These are mainly United Nations, International Labour Organisation, environment and good governance conventions.
