MORE REACTION AND SCREAMING HEADLINES FROM NAIROBI
July 12, 2106
Nairobi, Kenya
By Standard Newspaper
Kenya reads mischief in Tanzania's move to pull out of joint EPA talks
Reliable sources within the Foreign Affairs ministry say Kenya sees the decision by Tanzania as ‘blackmail’ and is taken out of ‘malice’ as part of a series of decisions that have been taken by President Magufuli’s government that promise to hurt Kenya’s economy.
“We see this as blackmail and may be aimed at increasing its share of exports to the EU at the expense of Kenya. The argument that the deal is not good for local industry is hollow because it’s the entire region stand to benefit from better export terms,” explained the source.
The source requested to remain anonymous on grounds it would jeopardise the talks and go against the code of secrecy that is required of negotiating teams. Kenya will be the biggest loser if Tanzania refuses to sign the deal by October.
However, Tanzania will continue enjoying preferential treatment for its exports to EU since it falls under the category of least developing countries. Kenya is the only country from the EAC that was dropped from this list after it was classified as a middle-income country, which has seen it lose out on some of the trade privileges it used to enjoy.
“This really is killing the spirit of EAC given that we are not moving together as one, which is the basic principle of the regional bloc,” he said. A similar stunt pulled by Tanzania in 2014 after it delayed in signing the agreement saw Kenya temporarily placed under what is known as the Generalised System of Preferences (GSP) trade regime.
This saw Kenya’s exports attract duty of between five per cent and 22 per cent, threatening to price Kenya out of the lucrative EU export market. This cost exporters more than Sh600 million in discounts every month to allow traders factor in the new taxes and remain competitive.
More than 87 per cent of Kenya’s exports to EU are agricultural, agro-processed and manufactured products.
“As Kenya suffered, other EAC countries continued accessing the EU market under Everything But Arms (EBA) initiative since they are categorised as least developing countries,” the source said. This was reversed in December 2014, three months after it was enforced.
The agreement was to be signed on July 18 on the sidelines of the UNCTAD conference .
Source:
Kenya reads mischief in Tanzania's move to pull out of joint EPA talks