Relief for Kenya as Tanzania signs EU trade deal

Tanzania has endorsed a regional trade pact with the European Union, clearing the way for Kenyan products to regain duty free export access to Europe.

EU officials say the formal endorsement happened Thursday evening.

The move completes the Economic Partnership Agreements (EPAs) East African Community officials concluded with their EU counterparts this week after nearly one decade of grueling negotiations.

All members of the East African Community needed to sign the deal for it to be valid. Putting it into effect, however, could take up to half a year.

Beyond the elimination of customs duties, the agreement also covers issues such as free movement of goods, cooperation on customs and taxation, and trade defence instruments, which mirror EAC efforts to strengthen its customs union and set up an effective internal market.

Tanzanian delegates had requested more time to “consult” when Kenya, Uganda, Rwanda and Burundi signed the pact on Tuesday.

READ: Kenya’s quest for free access to EU market suffers setback.

“I wish to advise that Tanzania initialled the EAC-EPA late evening yesterday in Brussels,” EU Delegation in Kenya’s trade counsellor Christophe De Vroey told the Business Daily. “Hopefully it will now not take too long for Kenya to come back to a duty-free quota-free access to the EU market”.

The EU has said it needs between three and six months to complete its internal procedures for reinstating Kenya to the preferential agreement.

Any delay could prove costly for Kenya, which is losing between Sh400 million and Sh1 billion a month under a harsher trade regime that kicked in when the deal was not concluded on time.

Since October 1, at least 87 per cent of Kenya’s exports to EU – equivalent to Sh98 billion according to last year’s trade figures – have been attracting tariffs ranging from five to 22 per cent to enter Europe. Among the key exports, cut flowers attract tariffs of 8.5 percent, fish six per cent while fruit juices from Kenya now cost 11.7 per cent more on the European shelves.

East African countries can now focus on improving their economic performance without worrying about the potential loss of full duty-free quota-free access to the European market, EU officials say.

“All EAC members, least developed or more advanced, will benefit from the same predictable and uniform trade scheme,” a statement put out Friday says.

“To comply with the rules of the World Trade Organisation, EAC countries committed to increase the share of their duty-free imports to 80 per cent over the coming 15 years. As EAC customs union tariffs on imports are already low, absorbing the EPA is a feasible endeavour. Also, when EAC countries will be ready to grant more far-reaching concessions to Europe's main competitors, the EU will be able to claim those same improvements.”