Regional NGOs Warn Kenya on EU Trade Deal

Eastern and Southern African trade promotion organisations are pushing for the rescinding by Kenya of the recent agreement with the European Union to implement the Economic Partnership Agreement (EPA) between them.

They say the deal pauses “imminent danger” to the integration of East Africa and the continent as a whole, as well as the ongoing trade initiatives like African Continental Free Trade Area.

The EPA is a free trade agreement between the EU and countries in the African, Pacific and Caribbean regions, under which the European Union allows them quota- and tariff-free exports, while these countries also lift trade restrictions on European goods in a phased manner.

The Southern and Eastern Africa Trade Information and Negotiations Institute, SEATINI, Uganda, SEATINI Southern Africa and Akina Mama Wa Afrika say Kenya’s move to implement the deal will have far-reaching impacts on the region and continent.

SEATINI Uganda Executive Director, Jane Nalunga says Kenya should have first pushed EAC governments to put in place measures that would respond to the outstanding issues.

They were was discussing the deal on a theme: ‘‘Inherent Danger of the EU – Kenya Economic Partnership Agreement (EPA) on the EAC Regional Integration and AfCFTA Implementation.’’

The EAC countries agreed to jointly negotiate the deal as a bloc to avoid disrupting the integration process, but they failed to agree on whether to sign up and ratify the agreement that was launched in 2002.

In 2013, the EU gave the EAC, which by then had Uganda, Burundi, Kenya, Rwanda and Tanzania, a one-year deadline to sign up or risk losing their preferential trade positions with Europe.

While the other countries can still trade under the “Everything But Arms” trade initiative which the EU offered law developed countries, Kenya would have no trade favours left because it had attained the middle income status.

It was therefore signed and ratified in 2016, while Rwanda also signed in the same year but did not ratify the deal.

Tanzania outright rejected it saying the EAC industries would be affected because local products would not be able to compete with those imported from Europe. The other issue was the expected loss of revenues of the import taxes were scrapped on European products.

Uganda decided to wait until all the EAC partner states reached a common position for fear of the community disintegrating, while Burundi is not part of the negotiations because it has been and is still under EU sanctions.

Nalunga says that because the regional economic blocs in Africa have been made the base for continental integration, Kenya’s move will affect continental trade and integration.

However, Kenya’s dilemma, Nalunga says while the EU is a significant market for Kenya, it exports there raw material and fresh products like flowers and fruits, yet it has a bigger market in East Africa, which it could focus on.

At their 21st ordinary summit in February 2021, EAC heads of State authorised EAC states who wish to do so to commence engagements with the EU without needing approval from all other EAC members under a ‘principle of variable geometry’.

“This means in practice that Kenya, which expressed the wish to individually access the EPA, will be able to move forward in the implementation,” says the EU in its argument.

On 22 June 2021, Kenya and the EU formed a joint taskforce to prepare a Kenya-EU EPA, and agreed on 18 February 2022 to advance negotiations on an interim EPA, open for other EAC member states to join.

With the EU/Kenya announcement, the Agreement will now undergo “legal scrubbing and translation” before signature and conclusion by the EU Council, upon which the E and Kenya can sign and ratify.

Rangarirai Machemedze, Coordinator SEATINI Southern Africa says that while Kenya will find it hard to trade with Europe without a deal, the dilemma should give the EAC countries, including Kenya, to diversify their export markets instead of relying on one.

He also condemned the way the EU/Kenya deal is designed, without providing for incentives that had been agreed on in the early negotiations.

He says the deal was aimed at improving production and productivity in in the EAC and promote technology transfer and generally support the economies to grow, but that these are not anywhere in the Kenya deal.

In 2005, the United National Economic Commission for Africa commenced studies on the possible impacts of the EU-EPAs on the undeveloped regions if they signed and implemented them.

It concluded that the European countries were poised to benefit more from the deal that the ACP countries.

Faith Lumonya, the Economic Justice and Climate Action Lead at Akina Mama wa Africa, says the deal is being rushed at this time when the EU badly wants minerals to boost its energy transition.

The deal, she says, will give way to EU to access duty-free raw materials in Africa which are increasingly becoming vital as the west looks to power its energy transition at the expense of the poor countries.

Lumonya calls on Kenya to reject the deal and urges the other African countries not to panic into signing and ratifying.

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