The East African Community (EAC) has sought a three-month extension on whether to sign the Economic Partnership Agreement (EPA), with the European Union, pushing back the final agreement to January 2017. EAC Chair, Tanzania’s President John Magufuli told a plenary session that after considering all the issues raised by member states, the bloc’s leaders were seeking a three-month extension to arrive at a “win-win” result.
The deadline for the East African countries to append their signatures on the trade agreement was October 1, 2016. Dr Magufuli noted that there are number of contentious issues that some partner states especially Tanzania would like to be ironed out first before signing the deal. He said top of the list was how the Community would protect its industries.
“In Tanzania we have already resolved to create an industrialised economy; so if we are to adopt this agreement the way it is right now, the question would be how can we safeguard those industries from competition with European industries?” he said.
Another issue of contention, according to President Magufuli, was the likely impact on the region’s agricultural sector – which is the largest contributor of GDP – as imported produce from Europe would likely be cheaper considering that EU farmers largely benefit from subsidises.
“Imports are also a major source of income in our countries. In Tanzania, for example, we estimate that we would have lost 45 per cent of income from EU in 25 years,” said Dr Magufuli.
Burundi, which is embargoed by the EU following political unrest, had said it would not sign the trade deal given its current relationship with the Europe.
Dr Magufuli also said EAC would need to make a thorough review on how the Brexit will impact the execution of EPA since UK has been a major trading partner with the region.
Since 2007, Europe and EAC have been negotiating on EPA, a reciprocal pact that would give a duty- and quota-free access to the EU. Kenya and Rwanda have already signed the pact (see previous posting), but the trade deal requires that all EAC states commit to it for it to take effect.
Kenya is the only nation that stands to lose access to Europe because it is not grouped among the Least Developed Countries hence does not benefit from the unilateral Everything But Arms protocol.
The EAC secretariat was been tasked to officially write to EU not to penalise Kenya with huge tariffs on its exports for missing the October deadline.
Uganda’s President Yoweri Kaguta Musevi urged the EU to agree to the extension request to allow the region to come up with a collective response.
“I had to read all 146 EPA articles so we know what we’re talking about. Give us three months and we shall give a collective answer which is better than fragmented ones. Don’t punish Kenya because it is one or two inches taller than others, that is not fair,” he said.
He noted that as much as market access is important, industrialisation of EAC was the way forward and thus the region could not continue to export raw materials.
For his part Kenya’s Deputy President William Ruto, who represented President Uhuru Kenyatta at the meeting, said that after long and candid consultations, they had agreed that more time and deliberation was needed so that all member states could move together as a bloc. However, he did not comment on the fact that Kenya has already signed the EPA
“Going forward our commitment is to our development paradigm… which must be of the nature that can give us the best value and must underpin our engagement with all our friends and partners,” he said.
Rwanda’s President Paul Kagame said all member states needed to remain determined on integration. “We should always remain together and be flexible whenever possible,” he said. Again, he did not comment on the fact that Rwanda had also signed the EPA last week in Brussels.