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EAC Debates EU Trade Agreement

After years of negotiations between the East African Community (EAC)—the regional organization including Burundi, Kenya, Rwanda, Uganda and Tanzania—and the European Union (EU), early reports suggest that the two partners will sign a comprehensive trade deal, an Economic Partnership Agreement (EPA), by the end of the month.

This agreement will extend duty- and quota-free access to East African exporters targeting European markets, while also expanding the EU’s reciprocal market access in EAC countries—a measure that has been contested by some observers.

Earlier this year, other African regional bodies such as the Economic Community of West African States (ECOWAS) and Southern African Development Community (SADC) signed similar EPA agreements.

In recent weeks, some observers have criticized the EAC-EU arrangement, arguing that in its current form the “EPA cannot work for Africa’s development, given the extensive level of liberalization (82.6 percent) that the EU demands as part of the agreement.”

Furthermore, disagreements over the EAC’s export taxes on raw materials and the EU’s subsidies on its own agricultural exports have hindered consensus. Meanwhile, the EU has set a deadline of October 1, 2014, by which time it will remove its trade preferences for all EAC countries that have not signed onto the EPA (but are currently afforded these preferences under an interim agreement.)

However, EAC countries qualifying as least developed countries (LDCs), including all EAC members except for Kenya, will continue to receive preferential EU market access under the Everything But Arms (EBA) trade arrangement. This puts Kenya, which is not an LDC, in a uniquely vulnerable position, according to the Daily Nation, considering that nearly 40 percent of Kenya’s fresh produce is destined for European markets, and the failure of the EPA would subject Kenya to an immediate 12 percent duty for all products entering the EU.

Concerns that the Kenyan horticultural sector will experience substantial reduction in revenues if the EPA fails to be implemented are already surfacing as the EPA deadline approaches.

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