EU agrees to drop clause in trade talks

The European Union has ceded ground on one of the contentious clauses stalling the conclusion of a new trade pact with the East African Community.

European Union head of delegation to Kenya, Mr Lodewijk Briet, yesterday said that following a January meeting in Belgium, clauses on tax governance would be dropped from the Economic Partnership Agreement (EPA).

EPAs have been on the table since 2004 and they seek to establish a new trading regime for the two regions. Although an October deadline is looming, EAC partner states have taken issue with some provisions of the treaty.

“There was another clause on tax governance and that, at least as the EU, we were ready to drop on January 30,” Mr Briet said.

However, during talks to be held next week in Nairobi, the European Union will still pursue the inclusion of a non-execution clause in the EPA document. This pre-conditions trade ties on compliance with certain good governance and human rights benchmarks.

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East African Community partner states have previously objected to this provision, citing the variable manner in which it can be interpreted.

Another sticking point is pursuit, by the EU, of a trading regime that would protect its domestic agriculture sector. 

Technical teams from the EAC and the European Union are also expected to thrash out details on the rules of origin for at least 15 products, including olive oil, cocoa and coffee.

The most favoured nation (MFN) clause as well as the issue of export taxes are yet to be resolved.

If the agreement is not signed in time, Kenyan exports to the EU will be subjected to potentially higher tariffs, leading to losses worth billions of shillings, especially to horticulture.

Mr Briet said he hopes the EPA deal with the East African Community will be concluded in Brussels next month during a summit hosting African leaders.