EPAs key to regional trade growth

November 29, 2011

, NAIROBI, Kenya, Nov 28 – An Economic Partnership Agreement (EPA) is a necessary component in cultivating trade opportunities in the region, according to German Ambassador to Kenya Margit Hellwig-Boette. 

Ambassador Hellwig-Boette, who was speaking at the International Trade Fairs seminar on Monday said Kenya’s position as a driving economic force in East Africa gives it the leverage to spearhead such an initiative.

“LDCs (Least Developed Countries) in the region do not really have an interest in bringing this agreement together, but for Kenya, this is different because it exports a lot to the European market and they have preferential access with this agreement,” she said. 

Hellwig-Boette added that Kenya’s failure to sign the EPA will result in paying higher taxes when exporting to the European market.

The issue has been a bone of contention between Kenya and its East African Community (EAC) counterparts who fear that if it were to sign an EP, it would break ranks with the EAC on its trade deal. 

As it stands, the EPA deal would require Burundi, Kenya, Rwanda, Tanzania and Uganda to liberalize tariffs on 82.6 percent of European Union (EU) goods imports by 2033, while the EU would liberalize all tariffs on EAC goods imports, with transition periods for rice and sugar.

In October 2007, the EAC partner states in a bid to preserve their Customs Union, agreed to form the EAC EPA configuration to enable them to negotiate with EU as a bloc.

As a result, the EAC initialed the Framework Agreement for establishing an Economic Partnership Agreement (FEPA) with the European Communities (EC) in November 2007. 

However, since 2007 talks between the EAC and the EU have been held up, with issues such as export taxes, the most favoured nation (MFN) clause, rules of origin and agriculture still to be negotiated.

With an estimated ($13 billion) Sh1.17 trillion worth of German oil and other goods imported into Kenya annually, German investment is certainly not lacking. However, the German envoy insists more needs to be done on Kenya’s political front to attract more investors. 

“Apart from corruption it needs more engagement to reform the judiciary. A lot has been done at the top level but to reform the judiciary as quickly as possible and make the rule of law prevail in all the sectors in Kenya will help enormously to attract foreign investors,” she said.

Hellwig-Boette noted that trade fairs were a step in the right direction in facilitating investment and trade cooperation between countries.

Germany is the second largest export destination for Kenyan goods particularly in coffee and horticultural products. 

Trade and Fairs Consulting Chief Executive Officer Skander Negasi, who spoke during the International Trade Fairs seminar said the group has been instrumental in pairing African businesses with foreign buyers from Europe and the United States. 

“The East African textile fashion market as well as crafts and jewellery are really booming. The business response within Europe or the USA especially for East Africans was always fantastic,” he said.

Trade and Fairs Consulting is the representative of the lead trade fair organiser Messe Frankfurt in East and Southern Africa and has already set up shop in Nairobi, to assist Kenyan enterprises in acquiring visas to international trade shows.

Plans are underway to bring the first Messe Frankfurt Trade Show to Nairobi that Negasi said will launch the Kenyan capital as an exhibition hub for the East African region.

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