East Africa: Region Okays Kenya's Proposal to Go It Alone With European Union

28 February 2021

The East African Community member States on Saturday endorsed Kenya's proposal for individual accession to a trade deal with the European Union, seeing it as a cure for continual wrangles over the agreement.

The decision first mooted in 2018 means each member State will decide when and how to enter the trade pact known as the Economic Partnership Agreements (EPAs).

First tabled in 2016, only Kenya and Rwanda had signed and ratified it while Uganda, Tanzania, Burundi and South Sudan dragged their feet, arguing it could damage their nascent industries.

A communique of the 21st Summit of the East African Community heads of State on Saturday said Kenya and Rwanda should be allowed to continue implementing the agreement as others think over it.

"The summit recalled its previous discussions on the EU-EAC economic partnership agreement and recognised that not all partner states are in a position to sign, ratify and implement the agreement.

"The summit recognised the importance of some partner States moving forward ... partner States which wish to do so should be able to commence engagements with the EU with a view to starting the EU-EAC EPAs implementation under the principle of variable geometry," the leaders agreed, according to a dispatch from the EAC after their virtual summit.

Variable geometry in international trade means countries committed to a specific agreement involving trading blocs may be allowed to proceed implementing it while members with reservations get time to think about the deal.

In the EAC, however, the EPAs between the bloc and the European Union were to be valid only after all members signed on.

Development funds

An EAC summit in Kampala in 2018 agreed in principle to try variable geometry even though Uganda had raised reservations about the potential for such a move to weaken the strength of the bloc and ambitions for more integration.

On Sunday, Johnson Weru, the Principal Secretary in the State Department of Trade, told the Nation the deal will allow those who have signed to reap the attendant benefits without being held back by others.

"It is meant to encourage unlocking of development funds for countries that have signed and ratified the deal pursuant to article 75 and 102; annexes IIIa and IIIb of the agreement," he said, referring to EU commitments to boost infrastructure for regional trade and connectivity.

The EU had earlier expressed reservations about dealing with individual countries.

Under EPAs, the EU would open to duty-free, quota-free imports from the EAC while the latter opens up a common market for its goods.

Some member states like Tanzania, however, refused to sign, saying it would allow flooding of cheaper imports into its market, killing local industries.

Amb Weru told the Nation variable geometry will not be unique to EAC, however.

"It is an international principle in trade. It has been applied elsewhere in regions where the EU is involved," he said.

Trade volumes

The EAC exported goods worth $2.29 billion in 2019 and imported $3.86 billion from the European Union.

The EU buys 30 per cent of its fresh flowers from Kenya, making it an important horticultural market for Nairobi.

However, as Kenya is the only country in the region considered to be a lower middle class economy, Tanzania, Uganda, Rwanda and Burundi, all categorised as least developed countries, could still be allowed to export their goods duty-free and quota free under an arrangement called 'everything but arms'.

Tanzania was last year elevated by the World Bank to the lower middle income category but it will take about three years to be fully considered as one.

As member states haggled over EPAs, Nairobi had negotiated a special arrangement under the Market Access Regulation. This does not, however, include EU's commitments to help develop regional infrastructure for trade.

Member applications

Meanwhile, member States agreed to fast-track Somalia and DR Congo's applications to join the East African Community.

The communique on Saturday said the stalled verification for Somalia and the DRC should be undertaken as soon as possible.

"The summit considered an application by the Democratic Republic of the Congo (DRC) ... and directed the Council (of ministers) to expeditiously undertake a verification mission in accordance with the EAC procedure for admission of new members into the EAC, and report to the 22nd Summit," said the dispatch.

The DRC, the largest country in sub-Saharan Africa, applied to join the EAC in 2019, as soon as President Felix Tshisekedi took over power.

Kenya and Rwanda have specifically supported its application to provide the needed market and access to resources the DRC has.

However, both DRC and Somalia, which first applied to join in 2013 but was unsuccessful, must meet a minimum threshold for stability and intention to endorse laws that will allow regional integration and free movement of people and goods.

Both Somalia and DRC will be assessed to determine their full membership when the leaders meet again.

In South Sudan's case, the summit said Saturday that it should be supported to "accelerate" its integration, including passing laws for free movement.

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