Magufuli terms EPA trade deal with Europe "a form of colonialism", dampening Kenya's hopes of favorable access to EU market
This means Kenyan will now be subjected to a 12 per cent duty for entering the world's biggest trading block if Tanzania and Uganda do not bulge.
Tanzanian President, John Magufuli on Sunday described the Economic Partnership Agreement (EPA) which was meant to promote competitiveness and preferential treatment of goods from East Africa as a “form of colonialism”, dampening the country's possibility of signing the deal with the European Union (EU).
“It is bad for our country,” Dr Magufuli affirmed.
Agriculture is Kenya’s biggest foreign earner and EU takes about 40 per cent of Kenya’s fresh produce exports with flowers exports worth Sh46.3 billion and vegetables valued at Sh26.5 billion every year.
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Addressing a joint press conference with visiting Ugandan President Yoweri Museveni at the State House, Dr Magufuli disfavored EPAs, which are aimed at creating a free trade area between EU and the African, Caribbean and Pacific Group of States.
“I believe that our neighbour, Uganda, will second us for the betterment of our countries. We have discussed EPA for a long time but to me it seems like another form of colonialism… it is bad for our country,” Magufuli said.
President Museveni echoed Magufuli’s sentiments stating that the fact that many African countries had not signed EPA shows that the proposal was meant to create disunity among African countries.
Kenya negotiated the EPAs under the auspices of the East African Community-EU-EPAs arrangement however in 2014 following fresh computation of data, the World Bank placed Kenya as a lower middle-income nation, having crossed the United Nations’ $1,045 gross domestic product (GDP) per capita threshold.
Therefore while Uganda, Tanzania, Rwanda and Burundi are all classified by as poor countries and will continue to enjoy market access under EBA, Kenyan goods will be subjected to higher taxes.
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Trouble began late last year when Tanzanian lawmakers rejected the EPA deal when the agreement was sent to Parliament for debate.
Mr Hussein Bashe (Nzega Urban-CCM) warned that EPA would kill EAC by creating rift since not all member states would enjoy the same benefits.
“Some are going to earn a lot while others will see their productive sectors collapse.”
Kenya then held several meeting with its counterpart to try and iron out all outstanding issues such as duty and taxes on exports and until late last year was optimistic Tanzania would sign the deal.
After failing to sign the agreement within the stipulated time line twice, it is not clear if EU will hold any longer, but for now it is back to the drawing board for Kenya.
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Kenya was supposed to be the biggest beneficiary of the EPA agreement, now it stands to be the biggest loser.
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