By EDWIN OKOTH,
Members of the European Parliament are rooting for the
extension of the October deadline to sign the comprehensive Economic
Partnership Agreement (EPA) between East African Community (EAC) and the EU.
The MPs said the extension would help salvage
the deal expected to offer Kenya relief from heavy taxes for exports to the EU
after Tanzania and Burundi threw a spanner in the works.
Tanzania has refused to sign the agreement
while Burundi is on the verge of being sanctioned by the EU following political
instability in the country.
Bernd Lange, the chairman of a joint EU
delegation of Trade and Development Committee attending the 14th United Nations
Conference on Trade and Development (UNCTAD) in Nairobi, said Kenya would be
the biggest casualty should the standoff persist.
“Our first proposal is to have the October 1st
deadline extended to allow for more time and see whether Tanzania will agree to
sign or if Burundi will improve her democratic situation and evade sanction
from the European Union. If none of these happen then I expect that Kenya will
apply for the GSP [Generalised System of Preferences] Plus and when it is
received then we can begin the market access regulations and save Kenya,” Mr
Lange said.
The GSP Plus status will allow Kenya to
continue exporting at the current preference terms even if the two countries
don’t sign up.
But the situation now leaves Kenya with a huge
headache of dealing with the political problems of one neighbour as well as
convincing another one that is reluctant to sign up.
Kenya is the only country among the East
African partners who does not enjoy the Least Developed Country (LDC) status
hence has to depend on the agreement or risk preferential treatment in the
lucrative EU market.
European parliamentary member Marie Arena said
the countries needed to agree, having structured the deal not to leave any of
them out.
“The question now is not even the details of
the agreement but the timeliness and the countries really need to do that this
August because as EU parliament, we have no control on sanctions to Burundi or
convincing Tanzania to sign the agreement. Kenya and other members can do that
better so that we have a smooth signing sail in this agreement,” Ms Arena said.
Under the trade deal, the EU would be granted
unlimited market access to Kenya for the next two and half decades. The East
African nation will also enjoy the exemption from the 8 -12 per cent taxes
while selling goods to the EU market.
Should the deal flop, these taxes will hurt
Kenyan exports by making them uncompetitive.
A failure will also hurt one of Kenya’s
engines of economic growth, agriculture. Close to 90 per cent of the
country’s exports to the EU are agricultural, agro-processed and manufactured
products.
The scenario might also spell doom to more
than 600,000 workers, mainly on the flower farms, and fresh foods producers.
This is not the first time Tanzania has been a
hurdle in the signing of the EPA. In 2014, Kenya suffered a setback after
Tanzania refused to sign the pact that East African delegates negotiated in
Brussels.
Tanzania says it is resisting the pact due to strict EU
market access conditions. The Southern African Development Community signed a
similar pact with a clause providing that the signing can be done even if one
member opts out.
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