Focus Shifts To Magufuli In Kenya Bid To Secure Trade Deal With EU

Attention shifts to President John Magufuli as Kenya leads its integration partners to Arusha in a last-ditch effort to safeguard its free trade arrangement with Europe, amid stiff opposition from Tanzania.

Industrialisation and Enterprise Secretary Adan Mohamed. PHOTO | FILE

Industrialisation and Enterprise Secretary Adan Mohamed. PHOTO | FILE

The East African Community’s extra-ordinary heads of state summit follows a surprise move by Tanzania to pull out of an earlier commitment that would see the bloc collectively sign Economic Partnership Agreements (EPAs) with Europe before the September 30 deadline.

Kenya and Rwanda signed the pact in Brussels last week while Uganda said it would append its signature on Thursday during the Extra Ordinary Summit of the EAC heads of state.

That technically leaves out only Tanzania as European Union had indicated it may not require Burundi to sign the deal yet until it resolves its internal political problem.

South Sudan, the EAC’s newest member also does not need to sign the pact until it completes the two-year bloc membership assentation period.

As chairman of the bloc’s heads of state summit, the decision made this week by President Magufuli will determine whether Kenya’s exports face taxes of between four and 24 per cent to enter EU market from October 1.

Kenya’s Industrialisation and Enterprise Secretary Adan Mohamed who appeared before the EU Parliament’s International Trade Committee believes the bloc will not tax Kenya’s exports once it sees proof of commitment from EAC members.

“The proposed summit will provide further impetus to the EPAs given the significance of the EU as a long term EAC trade and development partner,” Mr Mohamed said in a statement last week after his last-ditch effort to salvage the deal.

Kenya’s palpable expectation puts President Magufuli between a rock and a hard place. As chairman of EAC’s top organ, his partners in the bloc expect him to defend the shared customs territory by endorsing EPAs.

But his country has consistently opposed the free trade deal with Europe in the last 10 years. It argues that a clause in the Economic Partnership Agreements (EPAs) seeking gradual opening of 80 per cent of the region’s market to EU products could derail industrialisation in the region.

Benjamin Mkapa who ruled Tanzania as its third President between 1995 and 2005 has particularly emerged as an ardent critic of EPAs, discrediting the cocktail of agreement as precursor to the latter-day scramble for Africa.

Renewed pressure from Kenya puts President Magufuli in the unenviable position that his predecessor Jakaya Kikwete occupied as chairman of the summit 10 years ago.

At the time, the bloc was haggling over a common market protocol that sought to open borders to allow open competition for jobs, land and capital among the region’s citizens against a stiff opposition from Tanzania. The protocol was later launched six years ago after Tanzania won major concessions.

Earlier, Kenya had to cajole its unwilling partners to join EAC customs union in 2005 by immediately opening its market for Tanzania and Uganda while its goods continued to attract border taxes for five years before the two states began to reciprocate the same tax free treatment from 2010.

In the present case, the World Trade Organisation has outlawed the one-sided preferential market access that Europe has extended to its former colonies for years, forcing beneficiaries to adopt reciprocal arrangements.

All the African, Caribbean and Pacific (ACP) States have to sign EPAs to safeguard their economic relations with EU except those grouped as Least Developed Countries (LDCs)

Among the six EAC members, only Kenya — grouped as a developing state — is a non LDC member. Official data produced by trade ministry indicates preferential trade with EU has fuelled a booming business that supports over 200 firms in Kenya with Sh224 billion (€2bn) worth of investments.

– Business Daily