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Kenya pursuing her own deal after region’s EPA deadlock

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Kenya pursuing her own deal after region’s EPA deadlock

Kenya pursuing her own deal after region’s EPA deadlock
Photo credit: Enos Teche

Kenya has sent a delegation to the European Union for talks, to shield the country from heavy taxes on its exports, as closing the Economic Partnership Agreement by October appears unlikely.

This follows failure by its neighbours – Tanzania, Burundi, Uganda and Rwanda to ink the EPA deal on time, to pave way for its ratification by the European Commission on October 1.

Industrialisation Cabinet secretary Adan Mohamed and Principal secretary Chris Kiptoo are leading the trade delegation including the private sector, on four days of talks in Brussels, Belgium, the Star learnt on Monday. The delegation aims to push for a bilateral trade deal with the EU.

It is not clear whether Kenya wants to go it alone or seek an extension of the deadline, but an official familiar with the talks said Kenya wants to secure preferential market access even after the October deadline.

PS Kiptoo, however, indicated that Kenya is still willing to sign the pact with EAC member states.

“We want to go together (EAC member states). So we are trying to hurry it up,” Kitoo told the Star on phone from Brussels. “It will be inappropriate to give you details as at now. We will give details after the meeting.”

The signing of the EPA by the East Africa Community was set for July 18, during the United Nations Conference on Trade and Development forum in Nairobi.

Tanzania, however, declined to sign. It was followed by Uganda where president Yoweri Museveni said the agreement needed consensus between presidents.

The deal was further dealt a blow after it emerged the EU could not sign any deal with Burundi due to the recent political chaos caused by controversial re-election of President Pierre Nkurunziza and his decision to run for a third term.

This is the second time Tanzania has jeopardised the deal, after 2014, which would give the EAC duty free and quota-free market access to the EU.

Kenya is the only country in the region that stands to lose, since other EAC countries could still access the market on favourable terms under Everything But Arms initiative. They are categorised as Least Developed Countries.

After October 1, Kenya will be placed under the General System Preference trade regime, where goods are charged a duty of between five per cent and 22 per cent on her exports to the EU.

“We are talking of Sh126 billion worth of revenue (exports to EU in 2015) and one million direct employment. This is something the government is not willing to lose,” an official familiar with the talks said.

In 2014, the country’s private sector suffered losses estimated to be Sh600 million per month before successfully lobbying to be reinstated to duty-free status.

About 87 per cent of Kenya’s exports – in agriculture and manufacturing industries – to the EU valued at Sh98 billion were affected.

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