EAC, European Union aim to conclude crucial pact

September 23, 2014
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The EAPs deal is supposed to be signed by October 1, 2014 failure to which, imports in the EU market from Kenya will attract higher taxes hence becoming uncompetitive/FILE
The EAPs deal is supposed to be signed by October 1, 2014 failure to which, imports in the EU market from Kenya will attract higher taxes hence becoming uncompetitive/FILE
NAIROBI, Kenya, Sep 23 – Officials from ministries of East African Community are set to hold a meeting with European Union officials on Thursday and Friday in Nairobi with hopes of concluding the long awaited Economic Partnership Agreements (EPAs).

The meeting comes after the EAC reached a common position on the trade agreements last Friday, paving way for signing of the deal between EAC and the EU.

East African Affairs, Commerce and Tourism PS John Konchella said Kenya is looking forward to have the final negotiations and have the document ready for signing.

“I must say that we are on course. The problem is that we should have entered into this agreement maybe six months ago. But I think all is not lost. If we manage to initialise this document on Friday, I think we can say we are in business with European Union,” Konchella said.

Prior to the meeting on Thursday, technical officials from the EAC and EU will be meeting on Wednesday in Nairobi to what he termed as cleaning the document ready for initialling during the meeting by Principal Secretaries from the EAC ministries and EU officials meeting.

Konchella was speaking on Tuesday when he appeared before the parliamentary committee on Regional Integration led by Meru County MP Florence Kajuju.

The EAPs deal is supposed to be signed by October 1, 2014 failure to which, imports in the EU market from Kenya will attract higher taxes hence becoming uncompetitive.

Kenya had to agree with other EAC member states since it is considered a developing country hence the reason for attracting higher import taxes. The rest of the EAC countries are still on the safe side even if the EU-EAC deal is not signed as they are considered least developed.

“What we have agreed as EAC region that on 25th and 26th, the PSs in the region and EU trade office will now negotiate what we have agreed on. And if we do this and we are through, then the deal is there,” said Senior Assistant Director of Economic Affairs at the Ministry Eliazar Muga, who had accompanied the PS.

However, even if the deal concludes any time from now, local exporters to the EU market will still incur cost of close to Sh1 billion in terms of import taxes for up to 4 months, a period that may take for EPAs to be ratified.

Based on this, Kenya Association of Manufacturers (KAM) CEO Betty Maina called on the government cushion exporters like those in the horticultural sector to avoid these disruptions.

“The issue is, these exporters have to pay taxes for goods going into Europe. What they would like to know is if they could get support from government to pay those taxes on their behalf so that they don’t have to reduce their prices,” Maina, who was also appeared before the committee said.

She revealed that there were consignment worth millions of shillings sitting at the port of Mombasa after some buyers in EU delayed concluding transactions until the EPAs are concluded.

But the Ministry confirmed that if an agreement will be reached by Friday, EAC will seek legal instruments from EU to avoid the trade disruption before the ratification of the EPAs.

The Kenya flower exports for example in EU, has a market share of 40percent, with total exports holding a market share of 21 percent. The latter is second after EAC which has a market share of 25percent.

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