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EAC set to negotiate trade agreements with UK, UAE after EPA flops

 

EAC looking for trade partners

Arusha, Tanzania | THE INDEPENDENT | At least seven countries have requested free trade arrangements with the East. African Community (EAC), as the bloc also intensifies efforts to expand the markets for its products.

These countries include the United Kingdom, Singapore, Pakistan, and the United Arab Emirates (UAE), as well as China, Turkey, and Serbian.

It follows the failure of the deal between the European Union (EU) and EAC dubbed the EU-EAC Economic Partnership Agreement (EPA) after the EAC states failed to agree amongst themselves on key issues. The EAC leaders have called on the relevant authorities for the prioritization of the negotiations with the seven countries.

Now, at the 43rd Meeting of the Sectoral Council of Trade, Industry, Finance, and Investment, the EAC line ministers approved negotiations of FTA Agreements between the EAC and the United Kingdom, United Arab Emirates, Pakistan, and Singapore. The Council also directed the EAC Secretariat to engage each of the four countries by July 30, 2024, with a view to the commencement of negotiations for FTA Agreements.

The Ministers resolved that negotiations with Turkey, China, and Serbia will be undertaken after negotiations of FTAs have progressed with the first four. The countries are some of the major trading partners with the region, with some, like the UK and Pakistan considered traditional partners as they have traded with the region for more than a century.

The EAC has tried similar arrangements before, with the most prominent being the EU-EAC EPA that aims at opening up the European market to EAC products, quota, and tariff-free, while the EAC countries gradually phase out the tariffs on imports from the north. This, however, met challenges after the EAC states failed to agree on the possible effects of the deal, with some saying it would lead to European products flooding EAC countries and suffocating local production, among other fears.

Only Kenya signed and ratified the deal, but its implementation is still challenged by EAC rules that bind Kenya. Kenya, for example, also signed a Free Trade Agreement with the UK in 2020, featuring provisions on tariffs and quotas between the two. However, in 2022, it also faced challenge after the EAC raised the Common External Tariffs to 35 percent, for all goods coming in from other countries with no deal with the bloc.

The UK rejected the tariffs, telling Kenya that it had to abide by the agreement between the two countries. This has left Kenya in a dilemma, abiding by the rules of the EAC or observing the UK FTA.

Such international agreements are monitored and regulated by the World Trade Organisation (WTO), however, the other challenge with the EAC, is that some of its members; Somalia and South Sudan are not members of the WTO.

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