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No need to shy away from EU economic pact

The effect of the agreement, according to the study, is that it will open up the market to cheaper imports from the EU therefore posing danger to local industries. PHOTO | FOTOSEARCH
The effect of the agreement, according to the study, is that it will open up the market to cheaper imports from the EU therefore posing danger to local industries. PHOTO | FOTOSEARCH 

The East African Community is in the process of signing an economic partnership agreement with the European Union. So far, only Kenya and Rwanda have signed the agreement.

Burundi is reluctant to sign the agreement in the wake of economic sanctions imposed on it by the EU.

Meanwhile, Tanzania has commissioned a study on the effects of signing the agreement on the region. Uganda has stated that it will sign the agreement only if all the EAC member states reach a consensus, which seems difficult at this stage.

However, of interest are the possible effects of such an agreement on the region as highlighted in the study commissioned by Tanzania.

The research seems to conclude that it is not advisable for the EAC to sign the agreement due to a number of negative effects including the danger posed to local industries and reduced revenue from tax.

The effect of the agreement, according to the study, is that it will open up the market to cheaper imports from the EU therefore posing danger to local industries.

Furthermore, due to the reduction of taxes on such imports, revenue will be less. These are some of the reasons highlighted against the agreement.

However, Kenya and Rwanda have signed the agreement as it gives them access to more markets.

While I have not looked into the economic impact of such agreements, I believe that EAC member states can resort to using domestic laws to protect the local industry from whatever harmful effects that may arise from the agreement.

The pact has a provision that supports this approach, which is that nothing in the agreement would prevent member states from passing national laws.

The doctrine of the sovereignty of nations further supports the notion that a treaty or agreement with another state or region cannot prevent a country from passing national laws it deems fit unless, of course, it waives its sovereignty as is the case in regional laws where countries agree that they supercede national laws.

My take therefore, is that in the event of any undesirable effects arising from the agreement, then partner states can resort to using national laws to protect local industry.

For example, Kenya’s construction industry has a legal framework that should in effect protect local stakeholders from domination by foreign companies.

The law provides that only a limited amount of projects can be undertaken by foreign companies.

The sector is open to foreign companies, however the local industry is protected from competition and domination by foreign players using legal instruments.

The same can be applied to minimise risk attendant to signing the EAC-EU economic partnership agreement.

Cathy is the founder of CMputhia Advocates.

cmputhia@cmputhiadvocates.com