Talks Debacle Heightens Crisis On EAC Exports To European Union

The growing crisis over Kenya’s exports to Europe took a new turn on Friday after European Union officials said no date had been set for talks, contrary to the government’s position on the matter.

European Union trade and communication councillor Christophe De Vroey (left) and Ministry of Foreign Affairs and International Trade director general Nelson Ndirangu during a forum to discuss the crisis on the Economic Partnership Agreement. PHOTO | CHEBET CAROLINE

European Union trade and communication councillor Christophe De Vroey (left) and Ministry of Foreign Affairs and International Trade director general Nelson Ndirangu during a forum to discuss the crisis on the Economic Partnership Agreement. PHOTO | CHEBET CAROLINE | NATION MEDIA GROUP

This means that chances of speedy resolution of issues forestalling signing of the trade agreement between East Africa Community and European Union to facilitate duty free access of Kenya exports will take longer than promised.

“Brussels has received the request from EAC but a date (for the meeting) is yet to be arrived at,” Mr Christophe De Vroey, head of communication at the European Union delegation in Kenya, said at a press briefing in Nairobi on Friday.

It is understood that EAC had requested for an October 15 meeting with the European Union, which was declined by EU’s Brussels office.

NOT WORTH REVIEWING

Lack of a specific date for the negotiations is not the only problem, with the European Union saying the draft agreement reached by the EAC council of ministers is not worth sitting down to review.

Mid last month, the East Africa Council of ministers hurriedly convened a meeting in Arusha in which they agreed among themselves on how contentious issues should be worded, which the European Union secretariat later objected to.

“The proposal considered two weeks ago was declined as insufficient to have us arrive at a deal,” Mr Vroey said without elaborating on the contents of the proposal.

Among the sticky issues, according to those in the know, is a demand by EAC for freedom to ‘protect’ itself by imposing taxes on goods from the European Union whenever regional governments feel such goods threaten local industries.

The European Union, on the other hand, demands that EAC members ask for permission before implementing such measures.

The European Union, considered the largest single market, is also demanding that EAC countries eliminate export taxes before signing the Economic Partnership Agreement.

EAC is also pushing European Union members to abolish internal subsidies advanced to its farmers which see goods reach the markets at lower prices.

“It is imperative to note that only a few issues stand between us (EU/EAC) and signing of the deal,” Mr Vroey added.

Currently, Kenya is the only country on the continent whose exports — mainly agricultural — are being subjected to higher tax regimes before entry into the European Union market.

This is because other EAC member states are classified as least developed countries and thus continue to enjoy duty-free and quota-free exports to Europe, even without EPAs.

Other trading blocs on the continent have signed EPAs.

MAIN EXPORT MARKET

The European Union is the main export market for all East Africa Community member states, particularly Kenya.

About 23 per cent of Kenya’s total exports go to that market.

Kenya exports 70 per cent of its flowers to the European Union, and it earned the economy Sh110 billion last year, making it one of the top foreign exchange earners.

The European Union estimates that the delay will cost the economy at least Sh400 million a month while industry players such as the Kenya Flower Council put the loss at Sh1 billion every month.

The Kenya Association of Manufacturers, on the other hand, puts the estimated loss as a result of the new tax regime at Sh637 million per month.

– Daily Nation

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