EAC and EU Set to Draft Text for EPAs

Negotiators from the EAC and EU failed to reach a deal on the EPAs during the January talks in Belgium.

Technical experts from the East African Community (EAC) and the European Union (EU) will meet in Arusha later this month to formulate text for the Economic Partnership Agreement (EPA), paving way for the final agreement.

Negotiators from the EAC and EU failed to reach a deal on the EPAs during the January talks in Belgium.

“By the end of March, it is our hope that the meeting will conclude the text and spell the way forward,” said Phyllis Kandie, Kenya’s Cabinet Secretary for East African Affairs, Commerce and Tourism.

Experts say changing the text to serve the interests of the two parties could help iron out the differences that have been there since 2007.

A part of the text, the Rules of Origin, previously read that the EU was willing to consider allowing cumulation of goods with any African, Caribbean and Pacific country, except South Africa.

“The text was formulated to allow cumulation of goods with any African country, including South Africa,” said Jane Ngige, Chief Executive Officer of the Kenya Flower Council.

Cumulation refers to the possibility of getting goods from another country and exporting to the EU as originating from the EAC.

Considering the current drive to have a tripartite arrangement between SADC, EAC and Comesa, EAC was unwilling to let go of the option of sourcing from South Africa.

Previous efforts to come to an agreement on the EPAs failed, prompting the March meeting.

“The ministerial negotiations in Brussels in the first week of February ended without an agreed text, and was hence recorded as ‘informal consultations’ without any official record of the meeting,” said Stephen Mbithi, CEO of the Fresh Produce Exporters Association (FPEAK).

Mr Mbithi said delayed signing will set the process back, because after signing the agreement, it will have to be assented to by all concerned parties.

“If we do not have an agreed text by April 2014, on which Parliament can begin debating, it will be difficult to meet the September 30 deadline. This is because the document will need to go through the five EAC parliaments simultaneously, and also through EU member states consultations. What happens between now and April is critical,” he said.

The EU accounts for 85 per cent of Kenya’s fresh produce market. East Africa exports approximately $4.8 billion worth of products to the EU market including oil products, medicines, machinery, mechanical equipment.

“The EU/EAC ministerial meeting will take place in early April, possibly in Brussels. The meeting should produce an agreed text to avoid a crisis in horticulture exports later in the year,” said Mr Mbithi.

The negotiations are critical for the horticulture sector because if they are not finalised and signed by September 30, the industry will pay taxes on fresh produce exports to the EU, ranging from 8 per cent to 14.5 per cent, depending on the category of produce. The higher rates apply for processed products.

Tariffs will be raised in October, with flower exports attracting a duty of 8.5 per cent, which will make them uncompetitive against other exporters such as Colombia.

– The EastAfrican