Kenya faces tight EU deal deadline

Kenya is faced with a tight deadline in signing an economic partnership agreement with the European Union to avert loss of market for its products that form 22 per cent of total national exports.

The government on Thursday expressed concern that the deadline of October 2014 could see exports to the EU subjected to high taxes, reducing their competitiveness in that market.

“In the event the East Africa region will not have signed the EPA, Kenya in particular stands to incur huge losses given that its current export to the EU is estimated at Sh100 billion,” said Principal Secretary for East African affairs, Ms Mwanamaka Amani Mabruki.

Speaking during a breakfast meeting in Nairobi, Ms Mabruki said the country would be hit hard as most of its products will be subjected to tariffs by the EU.

“The affected products will experience sudden hikes in import duties into the EU with effect from October 2, ranging from 5 per cent to 20 per cent in such sectors as floriculture, horticulture, fisheries, food, beverages and tobacco as well as supplies and services,” she said.

The EPA is being negotiated within the framework of the East African Community that brings five countries in a trading bloc working towards a customs union and common market protocol.

Experts have in the past warned Kenya not to sign the EPAs on its own as this would distort the regional market that constitute 27 per cent of total exports.

The principal said Kenya is willing to sign the EPAs once the outstanding issues have been agreed on with the EU.

“Most of the outstanding issues have been moved to the political level where EAC cabinet secretaries will consult with the EU commissioners,” she said.

Some of these issues include export taxes, article 16 of Most Favoured Nations, agriculture text, rules of origin, institutional arrangements and dispute settlement.