European MPs warn EAC to be cautious on EU trade deal

The proposed Economic Partnership Agreement (EPA) between the East African Community and the European Union is not ideal for the region and could stifle the infant industries if passed as it is, some European Union Members of parliament told The New Times, yesterday. The agreement, they said, could pose a risk to regional economies as their infant industries will face unfair competition due to products from the European Union. Marie Arena, a European Parliamentarian, told The New Times that the agreement was unfair as it is and, if enforced in its current form, it could promote unfair competition in the region. She pointed out that the European Union had pushed a hard bargain in the deal largely by ‘arm twisting’ Kenya which risked to lose access to the European market. “I think this kind of agreement is unfair for the East African region. Europe is pushing a very hard satance and they have taken Kenya as a leader. Kenya is the only one that has interest in this trade agreement because they are not a least developed country. They (Kenya) need the agreement to maintain access to the European market,” she said. There were fears that if the deal is not signed by September 30, 2016, Kenya could lose its access to the European Union market as it is not grouped among Least Developed Countries like her partners in the bloc who are granted duty free access to the EU for all products, except arms and ammunition. Arena, who is part of the Parliament’s Trade Committee, said that a consequence of signing the agreement was that regional countries could lose preference of what products should enter the region. “If the agreement goes through, you (EAC) have no more preferences; you will receive all products coming from Europe in your market which will promote unfair competition. European competitiveness is higher. You will lose your tax because it will not be possible to impose tax for these products. You could also lose your infant industries as the European products are more competitive than local products,” she said. In an attempt to correct the situation, Arena said that a section of parliamentarians opposed to the deal were lobbying to convince the August House that the agreement was not good in building the relationship with Africa. However, they said that the lobbying process would require support from EAC countries in pointing out their infant industries need to be protected from unfair competition. “We will have to convince the European parliament that going through with this agreement is not a good relationship with Africa. We want to have a new partnership with Africa, not the old one that we have had in our history. We need the support of these countries, they need to say that they would like some protection,” she said. So far, they have been able to guarantee Kenya access to the EU market even without the agreement. “We have guaranteed Kenya that they will still have access to the European market and to help them make it an internal African market. This can work without having to sign the agreement,” she said. The parliamentarians went on to caution the region not to rush into the deal and take time to assess the state of industries within the region as well as their plans for coming years. Considering that more countries within the bloc hope to move from Least Developed countries status in coming years which could necessitate such an agreement, they called on the region to negotiate such agreements based on the status of their economies. Julie Ward, a EU parliamentarian from UK said that the EPA was not suitable as it comes at a time when EAC member states are working to expand their manufacturing base and improving trade amongst themselves. An ideal agreement, she said, should support infant industries and sustainable development for all trade parties. “There should be more protection for infant industries. We have to protect them, it should not only be about making business, it should be about making sustainable development, for people and environment,” Ward said. “We are for trade but not destroying the local business environment. I could not understand why they are not for sustainable development. We should ensure that no trade deals harm people’s wellbeing,” she added. The comments by the parliamentarians come days after East African Heads of State requested for additional time to review the proposed agreement before going ahead to sign it as a bloc. During the summit held in Dar es Salaam, Tanzania, on September 8, the Heads of State said that they needed additional time to review and reach a unanimous decision on the way forward. They had further called on the European Union not to penalise Kenya for failure to sign the agreement by 30th of this month. The agreement between the two blocs has been under negotiation since 2007 with an aim to create a deal giving a duty- and quota-free access to the EU market editorial@newtimes.co.rw

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European MPs warn EAC to be cautious on EU trade deal