Europe Keen to End Stalemate With EAC in Trade Talks

Differences over a clause that makes trade terms between the EU and EAC conditional upon the latter’s adherence to certain governance benchmarks, export taxes, market access and the Most Favoured Nation status remain contested ahead of the Nairobi talks.

European Union Ambassador to Kenya and Head of Delegation Lodewijk Briet at a Press briefing on Brussels summit in Nairobi March 18, 2013. Photo/Salaton Njau

European Union Ambassador to Kenya and Head of Delegation Lodewijk Briet at a Press briefing on Brussels summit in Nairobi March 18, 2013. Photo/Salaton Njau

Europe is hoping for a breakthrough on the four main sticking issues next week when it engages East African Community members in Nairobi talks aimed at ending a stalemate that has long delayed signing an economic partnership deal between the two.

Mr Lodewijk Briet, the European Union head of delegation to Kenya, said Europe would be glad to seal a final deal on new Economic Partnership Agreement (EPA) with East Africa when it hosts African Heads of State for a summit in Brussels from April 2-3.

“We hope to tie up the deal at the summit,” he told a media briefing Tuesday in Nairobi in preparation for the Brussels meeting expected to be attended by President Uhuru Kenyatta. The summit is held every three years under the Joint Africa-EU Strategy adopted in 2007.

Negotiators from the EAC and EU converge in Nairobi next Monday for a three-day session aimed at striking a new trade deal before the October 1 deadline.

“It is my hope that the Nairobi talks will find a breakthrough. A time has come for us to conclude the last details,” Mr Briet said.

Kenya and other EAC members are currently trading with the EU under an interim preferential deal signed in 2007 following the expiry of a similar programme by the World Trade Organisation (WTO) in the same year.

Under the non-reciprocal trading arrangement deal by WTO, exports from all countries in the continent used to enjoy a duty waiver in foreign markets.

With EPA, Kenya and neighbouring nations would be required to cut duty on several products imported from Europe while a wide range of their export products would attract duty in the EU market.

The previously tax exempt products would attract duty ranging from 8.5 per cent to 14.5 per cent, making them less competitive and significantly cutting the returns to growers.

Kenya exports cut flowers, fruits, fish, beans, coffee and tea to the EU which accounted for about a quarter (Sh110 billion) of Kenya exports.

Mr Briet said differences over a clause that makes trade terms between the EU and EAC conditional upon the latter’s adherence to certain governance benchmarks, export taxes, market access and the Most Favoured Nation status remained contested ahead of the Nairobi talks.

Negotiators from the EAC have remained adamant over a clause requiring future trade relations between the two blocs be based on governance issues as opposed to commercial concerns.

The principle popularly referred to as the non-execution gives a trade partner the right to defer contractual obligations in case a country is involved in massive human-rights violations, default on good governance criteria or non-observance of the rule of law.

– Business Daily