logo logo

Bloc gives Kenya nod to enter into EU trade pact

Business Daily | 2 March 2021

Bloc gives Kenya nod to enter into EU trade pact

By Gerald Andae

Kenya has the green light to pursue the Economic Partnership Agreement (EPA) with Europe after the regional business bloc recalled its previous position that restricted East African Community member states from endorsing the deal.

Nairobi and Kigali were the only two countries in the region to sign an EPA deal with Europe in 2016 after Tanzania, Uganda and Burundi refused to endorse it, forcing Kenya to have a temporary arrangement with EU to allow its goods to access the expansive market duty free.

The EAC heads of state summit said not all partner members were in position to sign the agreement and urged those who are ready to move forward with the plan.

“The summit concluded that partner states who wish to do so should be able to commence engagements with the European Union with a view to starting the EU-EAC-EPA implementation under the principle of variable geometry,” said EAC in a communication during the 21st ordinary meeting.

Previously, it has been a prerequisite that the EPA agreement is endorsed by all EAC member states.

Normally, horticultural produce from Kenya, Uganda and Tanzania enjoy preferential terms exempting them from paying taxes to access EU market, making the goods more competitive.

But following the hesitation to sign the pact by some EAC members, Kenyan goods stood to attract higher taxes, forcing it to seek a temporary arrangement with the EU.

Signing of the EPA deal was delayed because some states wanted a provision for special export taxes in order to protect certain sectors they consider sensitive and to discourage exportation of raw material to Europe.

Tanzania and Uganda have also been cautious in signing the deal as they believe that cheap goods from European countries will flood their markets, affecting the locally produced ones especially in agricultural sector.

 source: Business Daily