Kenya now at the mercy of EU on trade deal
SEE ALSO :Forester digs in against dam planTanzania’s dalliance with the failed Ujamaa brand of Socialism till the 1980s, meant that a lot of its industries remained underdeveloped. Now, as it struggles to rise again with new-found capitalism, the country’s Chinese-powered industrilisation plans have no room for European plans. Tanzania thinks EPAs is just a way for Europe to use Africa as a source of raw materials like it happened in the 19th Century scrabble for Africa. “Under the Common External Tariff of the EAC, when you sell raw material you charge zero percent levy, while intermediate products attract 10 percent and finished products are charged 25 per cent while under...all these will not be there under the EPAs; we have to discuss this and see how we can lose under these agreements,” Susan Kolimba, Tanzanian Deputy Minister for Foreign Affairs, East African, Regional and International Co-operation was quoted saying while giving reasons for rejecting the deal. Ugandan President Yoweri Museveni, in his usual trademark maverick style said he rejected the deal because at first he “thought it was as small deal that could be handled by ministers, but now he sees it’s a big thing that should be handled by presidents who should be given more time”. Well, the EAC has been given an extension till January. But will they sign? Rwanda, which has been tagged as Kenya’s foremost ally in the region has no qualms signing the deal at all. The country has expressed a fervent eagerness in signing the EPA deal as the country seeks to expand its exports and tap into the EU development funds and boost foreign investments. Rwanda’s exports have been falling over years, and to cushion the economy from further stress on foreign reserves, the country has embarked on an export diversification plan targeting Europe as one of the markets. Burundi, which is another signatory country has no problem signing the deal, but the country currently is embroiled in a bloodletting political turmoil, and is being accused of human rights abuses by the EU.
SEE ALSO :Prelate thanks Pope for new jobThe political turmoil and the accusations have created a huge and insuperable wall of virulence between Burundi and the EU, such that signing the EPA deal is no longer a matter of priority between the two. All said and done, if the EPA deal flops, it is Kenya that stands to lose the most than its regional friends. Failure to see other East African countries sign the deal will see Kenya, which is the only country in the region classified as middle income, others falling under the category of least developed nations, lose preferential treatment for its exports in the European market. The country will be hit with a Sh10 billion annual tax by the EU. This will make its hitherto valuable exports like fruits, coffee, tea, flowers and vegetables lose their competitive edge in the European market with major repercussions for the economy. The rest of the East African markets have alternative access to EU given their least-developed-nations status. And finally the EPA question, and Kenya’s interest in the European market, will only be answered by Tanzania’s Burundi’s and Rwanda’s signatures. Lack of which, EPA, and again Kenya’s interest, will be as good as dead and buried.
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