EU-EAC bond grows with comprehensive trade deal

A free trade deal supporting almost €6 billion a year in bilateral trade between the European Union and East Africa has been finalised.

The new Economic Pact Agreement (EPA) between the East Africa Community (EAC) and the European Union (EU) will "provide legal certainty for businesses and open a long-term perspective for free and unlimited access to the EU market for products from [the EAC]”, according to the European Commission, the EU’s executive body.

The EU and the EAC's five member states of Kenya, Uganda, Tanzania, Rwanda and Burundi, designed the EPA to provide a solid foundation for EU-EAC trade relations and is intended to support the regional objectives of the EAC in its plans to harmonise the tax regime.

EU commissioner for trade, Karel De Gucht, said “the comprehensive partnership agreement we have just reached is the best way in which we can support EAC's aspirations”.

Over the next 15 years, the EPA sees the EAC countries committed to increase the share of their duty-free imports to 80 per cent, in accordance with the rules of the World Trade Organisation (WTO).

The EAC already has low customs union tariffs so the EPA should not be hard to bring about and the two regions have also reached agreement on export tariffs. Looking ahead, the EU should also be able to claim the more far-reaching concessions to Europe’s main competitors, when the EAC countries are able to give these.

Ms Betty Maina, CEO of the Kenya Association of Manufacturers, said: “This could see the country saving jobs and maintaining its market share for Europe."

However, such deals aren’t supported by everybody as Günter Nooke, the German chancellor’s Africa commissioner, claimed the EPA cancels out the large sums of tax money contributed by Germany and Europe toward development programmes in Africa.

“Economic negotiations should not destroy what has been built up on the other side in the Development Ministry”, he said.