You are here  » Home   » Business News

Kenya and Rwanda sign EU trade deal as Tanzania and Uganda stay out

By Paul Wafula | Published Fri, September 2nd 2016 at 00:00, Updated September 1st 2016 at 21:27 GMT +3
From Left: Industry and Trade Cabinet Secretary Adan Mohamed, Rwanda Trade Minister Francis Kanimba, Ambassador of Slovakia to EU Peter Javorcik and Sandra Galina (right) of the European Commission.

Kenya has won over Rwanda as it races to secure access to the European Union market even as Tanzania and Uganda stay out of the deal.

The Industry, Trade and Cooperatives ministry said Thursday that trade ministers for Kenya and Rwanda had signed the EAC-EU Economic Partnership Agreement (EPA) in Brussels, Belgium.

The ministry said the deal was pursuant to the East African Community (EAC) Council decision earlier in the year for the EAC to sign the trade agreement with the EU. “This signals a start of the EAC Partner States securing the Duty Free Quota Free market access to the EU,” the statement reads in part.

The trade ministry said the signing of the EPA sends strong signals to the EU on the EAC Partner States commitment to the EPA.

On Wednesday, Kenya’s Trade Minister Adan Mohamed made an appearance at the EU Parliament where the matter to lock out Kenya from the EU market after 1st October 2016 was being discussed.

“He made a concerted presentation to the EU Parliament’s International Trade Committee (INTA) 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,” the statement reads.

But it is not clear the fate of the deal now that the rest of the EAC members were not on board yet it was being negotiated jointly.

Tipping point

Tanzania pulled the plug on the deal after it refused to sign on it on grounds that it would kill its local industry. This has been one of the tipping points for the deteriorating relationship between Kenya and Tanzania that has put the EAC under threat. Kenya decided to go it alone after it became clear that it would be caught by the deadline.

All EAC members have been negotiating the EPA since 2007 leading to conclusion of negotiations in 2014 where it was initialled, translated and legal scrubbing concluded.

If the EPA is not signed and ratified by all EAC partner states by September 30, 2016, Kenya stands to lose its market to the EU, having significant impact on her economy.

Unlike the rest of the EAC countries, Kenya will be the only country to be slapped with extra taxes since it is a middle income economy.

Mohamed informed the EU Parliament of the proposed EAC Heads of State Summit that will provide further impetus to the trade deal given the significance of the EU as a long term EAC trade and development Partner.

It is estimated that there are investments worth over 2 billion Euros in over 200 companies in Kenya benefiting nearly four million people most of whom are women and youth, particularly in the rural areas, who currently derive their livelihoods directly or indirectly from enterprises that are exporting to the EU in floriculture, horticulture, agro-processing and fisheries.

Accompanying Mohamed is Trade Principal Secretary Chris Kiptoo, EAC Principal Secretary Betty Maina as well as Private sector members represented by KAM CEO Phylis Wakiaga and Kenya Flower Council CEO Jane Ngige.

The Economic Survey 2016 shows that Kenya exported goods worth Sh125 billion to the whole of Europe, with a third of the exports going to the United Kingdom.


RECOMMENDED