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Kenya will continue enjoying duty-free and quota-free access for its goods to the European Union (EU) even if neighbouring countries fail to approve the Economic Partnership Agreements (EPAs).
Among the benefits that will remain pending is the rules of origin, a provision that allows Kenyan exporters to enjoy duty- free access to the European market despite their goods being made using raw materials sourced from other countries.
“On the basis of Kenya ratifying the agreement, the country will continue benefiting from the duty-free, quota-free access for as long as we are still trying to sort ourselves out at the EAC level,” Mr Rotich said during a roundtable meeting organised by the Institute of Economic Affairs (IEA).
“What Kenya is benefiting from the EU is market access only. All the other things in the agreement like rules of origin, the financial support, development component— we don’t benefit from that because so far the agreement has not been ratified by everybody else.”
Kenya and Rwanda signed the European trade deal in September, but it needs approval from all members of the East African Community bloc — which also includes Burundi, Tanzania and Uganda — to take full effect.
Burundi and Uganda have indicated they are willing to sign the deal, but Tanzania has declined to ratify it citing adverse effects on its industrial ambitions.
It was feared that Kenya will lose the most without the deal signed, as other member states would still continue getting duty- and quota-free access under EU’s Everything But Arms initiative since they are classified as Least Developed Countries.
The trade deal with the European Union gives EAC member states duty- and quota-free access for their goods to the EU as long as they meet the set health and safety standards.
EAC member states initialised an interim EPA deal in 2007 and another in 2014. Governments were given two years from the October 2014 agreement to ratify the deal in national parliaments.
Failure to ratify the deal would have seen Kenyan face a Sh10 billion-a-year tax on exports to the EU market and put to risk exports of more than Sh120 billion.
This would make its produce — mainly cut flowers, tea, fresh vegetables and coffee — uncompetitive in the EU market, putting at risk four million jobs.
The decision by Tanzania to pull out of the deal at the last minute after 13 years of negotiations has put to question the EAC’s willingness to work as a bloc.
– Business Daily