East African Community and European Union never ending ratification

With no agreement for the Economic Partnership between the European Union (EU) and the East African Community (EAC) in sight, the biggest question at this time is what is keeping the individual countries from finding common ground and if that could be expected soon.

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Source: Global Risk Insights

The region-to-region comprehensive Economic Partnership Agreement (EPA) with the European Union (EU) seems to be a controversial topic. Even if there is no media coverage on the European continent. The  goals are aimed to strengthen the relationship between the EU and the EAC and drive forward development. The EPA agreement is centered around the trade of goods.

The main objective is to achieve a duty-free and quota-free access to the EU market and to open the EAC market gradually. This means that an equivalent of 82.6% imports from the EU will be liberalized and there will be no changes on the import taxes for the next 25 years.

The EU has been trying to work on a ratification of the EPA since 2007. It seems most countries have a common opinion on the trade and are all ready to contribute to the increasing business relations in East Africa. The further points about economical, health and rural development will all be run with existing EU funds that do not affect the individual countries of the EU directly.

The countries of EAC have made attempts since 2007 to  gain access to the European market. Kenya and Rwanda succeeded first with the EPA consolidating their commercial position. On the other hand, it brought disadvantages. Kenya belongs to middle-income economies so it will be charged by higher taxes if the  EAC does not sign the EPA and it will influence Kenya’s economy negatively.

Tanzania is still considering the pros and cons of signing the deal by running a study first but there are two countries that oppose the request. Without a study Tanzania will not sign the trade deal with the EU,with one of its important European business partner being the United Kingdom.The EPA seems inconvenient after Brexit and the deal could damage relations with China Tanzania’s main Investor.

The EU imposed trade sanctions against Burundi that caused civil unrest and unwillingness to make a deal. The latest country be involved in the intergenerational process was  South Sudan.

Uganda is also preparing to sign however prefers to wait for all countries of the EAC. Permanent Secretary, ministry of Trade, Amb. Julius Onen, said: “We are not going to allow EPA to disfranchise EAC. What is happening now is that this issue (EPA) is being blown out of proportion by a group of people.” it is not the end of the world for the EAC region. “Uganda does not want to see a weakened EAC, this is why as a country we are trying to see that we are all pulling from the same direction.”

Regarding the signing of the trade treaty between the EU and the EAC, the UN think tank has warned the EAC not to sign the deal. This is because they have made studies to look up how the deal would favor the East African countries nonetheless this deal would not have a positive impact in the trade of this countries. “UNECA says the removal of taxes on capital goods from Europe will cause the EAC accumulated revenue losses of $1.15 billion per year.”

To conclude, several countries of the EAC are still examining the characteristics, advantages and disadvantages of the trade. Some of them,  disagree due to higher taxes and stronger competition from the EU, it is a complex agreement that will still be negotiated for several years.

Source: CTGN AFrica