Kenya and Rwanda have signed the Economic Partnership Agreement with the European Union (EU) agreement in Brussels, Belgium an announcement made by Adan Mohamed, the Cabinet Secretary, Ministry of Industry, Trade and Cooperatives.
“Kenya and Rwanda’s signing signals a start of the EAC Partner States securing the Duty Free Quota Free market access to the EU,” said the CS after assuring the EU Parliament’s Trade Committee of the EAC Partner States commitment to the deal.
Both the Rwandan Trade minister Francois Kanimba and Adan Mohamed signed the agreements however; Tanzania, Uganda, Burundi and South Sudan are yet to sign the pact to make it enforceable.
#Kenya & #Rwanda, who signed the #EPA with the EU this morning, are the firsts @jumuiya partner states to sign. pic.twitter.com/FlQe8fgLbQ
— Olivier J.P. Nduhungirehe (@onduhungirehe) September 1, 2016
If the EPA is not signed and ratified by all EAC partner states by the September 30, 2016 deadline, Kenya stands to lose its market to the EU, having significant impact on her economy.
In July during a media briefing after the Monetary Policy Committee meeting, Dr. Patrick Njoroge, the Central Bank of Kenya Governor had urged the country to secure the market after the withdrawal of the United Kingdom (UK) from the Union.
Dr. Patrick Njoroge proposed that those involved in the negotiations, for a long term approach, Kenya needed to settle in their competitive areas and do a comparative advantage of their products.
However, if the deal is not signed, “We are in a fast effect. It will lead to reduced profit margins depending on the product and the current tariffs are between 5-20 percent.”
The EU and the East African Community (EAC) finalised their Economic Partnership Agreement (EPA) on October 16, 2014. To comply with the rules of the World Trade Organisation, the EAC countries committed to increase the share of their duty-free imports to 80% over the coming 15 years.
Beyond the elimination of customs duties, the agreement covers important issues, such as free movement of goods, cooperation on customs and taxation, and trade defence instruments, which mirror the effort of the EAC to strengthen its customs union and to set up an effective internal market.