The East Africa Community bloc is at a standstill in negotiating a trade deal with the European Union, to avoid paying up to 30 percent export duties from October.
The dead end came about after some countries announced that they are unenthusiastic to sign any deal owing to “recent developments affecting the bloc’s [EU] union.”
The ten-year-old trade negotiation deal called Economic Partnership Agreement (EPA) is a conglomerate between Kenya, Uganda, Tanzania, Rwanda and Burundi and the EU. But after UK’s June 23 referendum to withdraw from the EU, which would end a 40-year partnership, Tanzania and Uganda have said that they want to delay signing the deal. Following the announcement by the two nations, Kenya is ready to continue with the negotiations alone.
In an interview in the Capital, Kenyan Foreign Secretary Amina Mohammed said: “We would like to sign it together; the desire is that we sign it together,” but “If we get to a stage where we can’t do that then we also have the right to make our own sovereign decisions.”
If signed into a binding deal, the negotiated EPA would give members of the EAC instant duty-free quota-free access to the EU for all exports. However, the Brexit decision is making trade negotiations difficult even as ministers from around the world meet this week for the 14th United Nations Conference on Trade and Development in Nairobi, where the EPA accord has been scheduled to be signed.
According to data from the European Commission, the EU imported goods worth $2.9 billion from the EAC last year. Kenya exported $1.2 billion worth of goods to the EU in 2015, according to the national statistics office.
Willemien Viljoen, a researcher at the Tralac Trade Law Centre in Stellenbosch, South Africa, told the Bloomberg that countries like Tanzania want to “wait and see what happens with Brexit,” a move that “will affect other members of the East African Community.”
Among many challenges that Brexit will cause East Africa include limiting capital flows into the region, hindering trade and investment, weakening exchange rates and damaging economic stability in the region, central bank governors from the EAC trading bloc said in a statement to reporters in the Ugandan capital, Kampala, on July 14. Nairobi-based Business Daily newspaper reported on Friday, that Uganda wants to delay the signing of the EPA to ensure the deal is signed collectively. The newspaper cited Julius Onen, permanent secretary for the Uganda’s trade ministry.
Brexit should not be an excuse
While “there may be some dynamics about East Africa negotiating market access to Britain,” UNCTAD Secretary-General Mukhisa Kituyi said in an interview in Nairobi that “there is no sufficient reason to dither the EAC’s engagement with the EU on the basis of Brexit. Brexit should not be an excuse,” the Bloomberg reported.
Kenya is the only country in the East African Community that is not classified as a least-developed country, as such, it stands to lose all its favored access to the EU if the deal is not signed by October 1.
“The partners in the region realize there is a time pressure, so does the European Union,” Betty Maina, Kenya’s principal secretary for the East African Community, said in an interview on July 14. “So we are looking at all measures and engagements to ensure we don’t miss October 1.”
Image credit: PPU