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East Africa investors call for fast conclusion of EAC-EU trade talks

NAIROBI (Xinhua) -- East African Business Council (EABC), a regional business lobby have called for the speedy conclusion of the ongoing East African Community (EAC)-European Union (EU) trade talks.

EABC Executive Director Lillian Awinja told Xinhua here that the delay in signing the agreement is causing anxiety among the EAC business community.

"We are concerned that if the agreement is not reached before the Oct. 1 deadline, Kenyan exports into the EU will begin to pay import duty," Awinja said during the Financial Services Sector Forum that took place as part of the UNCTAD 14.

If an agreement is not reached, Kenyan goods will be subjected to import duty in order to access the EU market while goods and services from the other EAC member states will still access the EU duty free because they are considered Least Developed Countries (LDCs).

Awinja noted that lack of a trade deal will not only affect Kenyan goods because Kenyan exporters currently have working arrangements with the companies in the other EACs nation in order to meet quantity requirements.

She noted that some of the EAC member states are reluctant to sign the EU-EAC trade deal because they will not get additional benefits from the agreement.

"We therefore need to bring on the table, the contentious issues and renegotiate as soon as possible in the spirit of the EAC," Awinja said.

She added that some of the EAC states will take about two years to graduate into becoming developing countries and will soon be in the same situation as Kenya.

Awinja said that it will be beneficial if all the EAC partner states signed a trade agreement as a bloc because it will portray the region as a single working customs union.


European Union parliamentarians delegation visits Kenya over trade deal

NAIROBI (Xinhua) -- A delegation of European Union (EU) parliamentarians has embarked on a series of meetings with Kenyan officials on alternatives to an outstanding dispute over the signing of an Economic Partnership Agreement (EPA), allowing barrier-free trade, the lawmakers said Wednesday.

The members of the delegation held talks with Kenyan trade and foreign affairs ministry officials and prepared to meet with members of the civil society to gather concerns about the EPA, a free trade deal which is being prepared for signature after more than 10 years of talks with the EU in Brussels.

Bernd Lange, Chairman of the European Parliament’s Committee on International Trade, said the EU was prepared to discuss new alternatives to the agreement ahead of the Oct. 1 deadline for signing it.

Kenya, a country classified as a developing nation, risks losing a big market for the flowers, fruits and vegetables unless an agreement is reached on duty-free access to the EU after the deadline.

Trade talks between the East African Community (EAC) member states, Burundi, Kenya, Rwanda, Uganda and Tanzania, on the EPA have dragged on since they kicked off in 2004.

Tanzania, a member of the EAC, declined to sign the trade deal until certain issues of concern, mostly those dealing with export regulations, are fully settled, according to officials.

The EU lawmakers, including Helmut Scholz, Marie Arena, Arne Lietz and Lange, said an arrangement to enable Kenyan farmers and exporters continue to access the EU market could be agreed, but only if the Kenyan authorities make an official request for consideration by the EU bodies.

"We have a big problem with Burundi.

"The EU rules of procedure do not allow us to vote on an agreement with countries under EU sanctions," Arena told reporters at a news conference at the venue of the UN Conference on Trade and Development’s (UNCTAD) 14th session holding in Nairobi.

Kenyan foreign affairs Cabinet Secretary Amina Mohamed has been playing down the potential of Kenyan exporters failing to get access to the European market due to the failure to have the trade agreement with the EU.

The EU lawmakers said a meeting with the Kenyan officials due to be held next month, would determine the decisions required to guarantee Kenya’s access to the European market.

The EU lawmakers said it would be possible for Kenya to gain access to the EU once a request is made for consideration under the EU’s General Scheme of Preferences (GSP).The agreement allows developing countries to access the EU market by paying minimal duty or no duty at all.

"We are keen on having more development aspects on the trade negotiations," Arena told reporters in Nairobi.

"We have problems from the EU side and the problems from the region," Arena said.

The EU has declined granting Burundi access to its markets because of sanctions against President Pierre Nkurunziza, whose controversial re-election for a disputed third term, led to the EU sanctions.

The EU lawmakers said measures to protect the Kenyan economy would be required urgently, including consideration of requests for approval allowing Kenya to trade under the GSP classification.

The Kenyan government has embarked on shuttle diplomacy to have Burundi and the other EAC states sign the EPA to save the country from losing the key export markets.

Kenya’s deputy President William Ruto visited Burundi on July 13 for talks with the authorities on the signing of the trade agreement.

Four East African countries are set to sign economic
partnership agreement with the European Union (EU)

NAIROBI (Xinhua) -- Four East African countries are set to sign economic partnership agreement with the European Union (EU) next week in Nairobi, a senior Kenyan official said on Wednesday.

Kenya’s Deputy President William Ruto said Burundi, Kenya, Uganda and Rwanda will ink the Economic Partnership Agreement (EPAs) that allows these countries to export their agricultural products to Europe without attracting tax.

The deal will however be signed without Tanzania which said last week it will not sign the trade pact between East Africa Community (EAC) and EU following Brexit.

The announcement caused shock at the EAC countries. Aziz Mlima, Tanzania’s Permanent Secretary in the Ministry of Foreign Affairs, said the country had decided to halt the signing because of "turmoil" that the EU is experiencing following Britain’s exit.

Mlima said signing the pact would risk exposing young EAC countries to harsh economic conditions given the prevailing conditions in Europe.

The official said Tanzania’s Parliament would first peruse and advise the government before committing to the deal.

"Our experts have established that the way it has been crafted, the EPA will not benefit local industries in East Africa. Instead it will lead to their destruction as developed countries are likely to dominate the market," Mlima said.

Ruto had travelled to Burundi to meet President Pierre Nkurunziza on Wednesday over the EPAs deal set to be signed on Monday next week. All four partner states, except Tanzania, participated and agreed to sign the agreement.

A statement issued in Nairobi after the visit to Burundi said the development (Tanzania refusal) poses a great threat to the EAC Customs Union which requires all Partners States to sign the EPA in order to safeguard against the perforation of the Common External Tariff.

"In the event that the EAC does not sign the EPA as a bloc, all EAC partner states stand to lose generous market access terms negotiated under the EU market," Ruto said.

The decision by Tanzania not to sign the agreement leaves the region, and specifically Kenya, at a great risk of losing a lot of revenue when exporting goods to the EU.

This essentially means Kenya’s exports to the European Union-mainly flowers and vegetables-will attract tax. Kenya exports produce worth 1.2 billion U.S. dollars to the European market.

The EAC partner states negotiated EPA as a bloc since 2007 and Ruto said Kenya stands to lose more because its exports to the EU will attract import duties thereby threatening jobs, revenue, and relocation of industries to less developed neighboring countries.

According to the statement, Ruto and Nkurunziza said stability of the region was important for economic growth and welfare of the people.

The economic agreement is due for signing by East African countries after the Sectoral Council of Trade, Industry, Finance and Investment (SCTIFI) EAC agreed.

An extra-ordinary council meeting of ministers responsible for East African Affairs met on June 30 and proposed that the countries sign the agreement on July 18.

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