M a r k e t N e w s

MPs ratify EPAs trade deal to save Kenya's exports to Europe

Posted on : Wednesday, 21st September 2016

 MPs yesterday put aside their political differences to ratify a trade agreement that will allow Kenyan traders free access to the European market.

In a special parliamentary sitting, the lawmakers unanimously voted for the ratification of the Economic Partnership Agreement (EPA) between the European Union and the East African Community (EAC).
This decision offers a ray of hope to Kenyan traders, especially those exporting flowers, fruits, fish and livestock products to the 28-member market. The decision to hold a special sitting to ratify the agreement is said to have been pushed by the Executive, which has been burning the mid-night oil to have the agreement ratified ahead of the October 1, deadline.
Now Kenya has until September 30, to rally its four EAC peers Uganda, Tanzania, Rwanda and Burundi to sign the deal, or risk having its exports to the EU slapped with punitive taxes of up to 22 per cent.
Kenya being the only middle-income economy in the region has found itself isolated, fighting alone for the ratification of the trade deal that has a huge bearing on the country’s employment and economy. Other countries do not stand to lose anything considering they automatically qualify given their position as least developed countries.
However, the Kenyan Government was challenged to put in place necessary environment for traders to take advantage of the agreement including in the areas of leather, cement, horticulture, livestock and meat. Emurua Dikirr MP, Yohana Ng’eno said there was need for the East African states to speak in unison, even as they try to navigate their different ideologies. National Assembly Majority Leader Aden Duale said by signing the agreement they will not undermine their membership to EAC.
Tanzania has refused to sign until certain prevailing conditions are addressed, including the effect the agreement will have on the country’s infant industries. Dar es Salaam also cited the uncertainty occasioned by Britain’s decision to bolt out of European Union as a reason for its reluctance.
However, Kenyan lawmakers moved to allay fears that the agreement would strangle EAC’s infant industries. They said that although EU products have been given market access, only 82 per cent of the market would be opened up.
Moreover, the opening up would be gradual giving the East African countries enough time to strengthen their industries. The delay in signing has seen Kenya isolated after its peers in East Africa developed cold feet on a trade deal with EU.
The EPAs are trade and development agreements negotiated between the EU and African, Caribbean and Pacific (ACP) partners engaged in regional economic integration processes. When talks on the deal began in 2002, the East African Community (EAC) agreed to enter the negotiations as a bloc.
But with the signing deadline looming, Tanzania has put the first nail in the coffin after publicly declaring it would not sign the agreement until further consultations. Kenya will still have to wait for other member countries particularly Tanzania and Uganda, which have requested for more time to ratify the agreement.
“We will continue discussing with them and if by January they are not convinced we’ll still have to give them more time,” explained Trade Principal Secretary Dr, Chris Kiptoo.
“We are in a customs union and we can’t engage in preferential trade agreements alone and the decision we have taken today (yesterday) is to safeguard our market access under the current terms with the EU,” he explained. However, Dr Kiptoo points out that Kenya can still reap the benefits of the agreement through special provisions. “If the summit meets in January and some members say they need more time there is nothing wrong with those ready proceeding since the treaty recognizes we can move at different speeds,” he explained.
Cabinet Secretary to the ministry of Trade and Industrialization,  Adan Mohammed stated that the agreement has recognised several goods, mostly in the agricultural sector as protected in a bid to safeguard local industries. “We have a Sensitive list which entails several items produced locally, including most agricultural goods and those produced by our light industries and imports from the EU that fall on this list will be taxed,” he said.
According to Mrs Jane Ngige, the CEO of the Kenya Flower Council, Kenya’s ratification of the EPAs is a good trade.

Source : www.standardmedia.co.ke
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