Economy

Tanzanian sues to stop Kenya from concluding trade deal with Europe

From left: Kenya's Deputy President William Ruto, Uganda President Yoweri Museveni, his Tanzanian counterpart John Magufuli and Paul Kagame of Rwanda during the opening of the EAC Heads of State and Government Summit in Dar es Salaam, Tanzania. FILE PHOTO
From left: Kenya's Deputy President William Ruto, Uganda President Yoweri Museveni, his Tanzanian counterpart John Magufuli and Paul Kagame of Rwanda during the opening of the EAC Heads of State and Government Summit in Dar es Salaam, Tanzania. FILE PHOTO 

Kenya’s quest to close an economic partnership agreement (EPA) with the European Union ahead of next year’s deadline has run into fresh head winds after a Tanzanian lodged a civil suit in the East African Court of Justice, seeking to stop it.

Castro Pius Shirima, a law lecturer at Iringa University, wants the regional court to stop the remaining signatories of the pact from penning the agreement that Kenya needs to protect a third of its export market. Kenya and Rwanda signed the contentious deal in September.

Mr Shirima argues in the case, which comes up for hearing next week, that the remaining members of the EAC — Tanzania, Burundi, Uganda and South Sudan — should be prevented from signing the EPA because of the many risks it poses to the region’s economy.

He further argues that “signing such an agreement by the second and third respondents (Kenya and Rwanda) has violated the letter and spirit of the EAC Treaty.” 

“If (the signing of EPA is) not stayed, any further signature will allow ratification and regional application of the agreement, which will most likely displace EAC products from the market thereby undermining industrialisation policy and tariff regimes,” he says in the papers filed on October 31.

The Arusha-based EAC Secretariat confirmed that its top officials had been served with the court papers.

“Yes, there is case to that effect that is coming up. Once we have more information we’ll issue a statement,” a source at the EAC Secretariat said.

The case commences barely one month before the region’s leadership meets again in Arusha at the start of next year to decide the fate of the EPA -- a deal that guarantees EAC member states quota-and-duty free access to the EU market. 

The presidents met in September in the wake of Tanzania’s stiff opposition to the pact. It was during the meeting that the leaders decided to give technocrats more room for consultations on EPAs and to review their position in January.

Kenya has, however, since 2007 been pushing for the deal to be concluded with speed. Being the only developing state in EAC (the rest are classified as Least Developed Countries that enjoy duty-free trade with EU without reciprocating), Kenya has had to lobby its partners to endorse EPA because of the shared customs territory.

Observers are likely to interpret Mr Shirima’s suit as the latest attempt by Tanzania to throw a spanner in the works after Kenya – backed by Rwanda - pulled off a surprise move to beat the psychological September 30 deadline that the EU Parliament had issued earlier.

The rushed signing of EPA helped to shield Kenya from an estimated Sh100 million-a-month tariff cost that the EU had threatened to impose from October 1.

Tanzania has long stated its opposition to the EPA. Former Tanzanian President Benjamin Mkapa has previously personified the country’s resistance to the trade deal.

Mr Mkapa maintains that the deal — which he describes as a latter-day scramble for Africa — would kill the region’s industrialisation dream.

Earlier in the year, Tanzania’s cabinet apparently took the cue when it, in a decision announced by its Foreign Affairs ministry,  opted to pull out of a joint deal hammered by the bloc’s ministers to have the region sign EPAs collectively.

Unanimous vote

Last week, the Tanzanian parliament, which has the power to ratify such trade deals, joined the fray with a near unanimous vote to block the country from signing the EPA.

The EU absorbed 32 per cent of the Sh581 billion that Kenya exported last year.

Data prepared by Kenya’s Industrialisation ministry shows that the booming Europe-bound exports directly sustain 200 firms and four million citizens.

Under the EPA, the EU will immediately keep its market open for the region in exchange for gradual liberalisation of 82.6 per cent of the signatories’ market over a period of 25 years.

Mr Shirima, who previously worked at the Arusha Resident Magistrate Court and describes himself as a tax administration specialist, is seeking orders staying the signing of the deal by the remaining EAC members until the European side guarantees that its subsidised agricultural products will not expose the region’s farmers to unfair competition and compromise food insecurity.

Both the EU and EAC side have, however, maintained that the EPA does not include liberalising the agricultural sector.

He wants the regional court to order Kenya and Rwanda to suspend further engagement with the EU side over the EPAs.

Kenya has already deposited a ratified document with the EU parliament while Rwanda is in the process of ratifying the agreement.

Mr Shirima has also asked the regional court to order EAC Secretary-General Liberat Mfumukeko to suspend trade negotiations with the EU until his case is determined.

Being a shared customs territory, however, all the six EAC members must sign the EPA for it to be implemented in the region.

Mr Shirima says the deal already endorsed by Kenya and Rwanda does not have any compensatory remedies for negative consequences of its implementation.

He states in his suit: “I stand to suffer irreparable economic loss and violation of my rights under the EAC Treaty in case of further signatures and /or ratifications to the EPA before the determination of this application.” 

The case is once again expected to test the EACJ’s mettle to handle the hard political question of regional integration.

omondi@ke.nationmedia.com