EU strikes trade deal with East African Community
The European Union (EU) and five East African nations - including Kenya - have agreed a new comprehensive Economic Partnership Agreement (EPA) allowing duty-free exports between the two regions.
Negotiators reached the deal last week, and say it will provide certainty for businesses and provide "free and unlimited access" to the EU for products from East African Community (EAC) countries Burundi, Kenya, Rwanda, Tanzania and Uganda.
The agreement offers reassurance that the countries' improving economic performance will not lead to the loss of full duty-free and quota-free access to the European market. All EAC members, with the exception of Kenya, are least developed countries (LDCs) according to the UN classification.
For Kenya the move reinstates free EU market access for the country's exports, which was withdrawn at the beginning of October after negotiators failed to reach a deal on the EPA by a 31 September deadline. This meant Kenya moved to the General Preference System where exports incur duty of 4% to 24% to the EU.
"The comprehensive partnership agreement we have just reached is the best way in which we can support EAC's aspirations", said EU Commissioner for Trade, Karel De Gucht.
Beyond the elimination of customs duties, the agreement covers issues such as free movement of goods, cooperation on customs and taxation, and trade defence instruments.
The agreement, which finalises an interim Economic Partnership Agreement signed in 2007, will now be presented for approval according to the domestic procedures of each partner. Imports from EAC countries have entered the EU duty- and quota-free since 1 January 2008, with total trade between the two regions amounting to EUR5.8bn (US$7.3bn) in 2013.
The delay in concluding the EPA means Kenyan firms "will have to pay taxes for another three to six months before the full legal processes for reinstatement into the duty free schedule can be concluded," according to Betty Maina, CEO of the Kenya Association of Manufacturers (KAM).
But she added: "Consultations are underway between Government and private sector on how to cushion Kenya exporters to the EU against the effects of the GSP tariff system.
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