The Economic Partnership Agreement (EPA) signed by the Trade ministers of Rwanda and Kenya on Wednesday in Brussels, Belgium will make it easier for Rwandan products to access the EU market, according to the Ministry for Trade and Industry (MINICOM).
The EAC-EU Economic Partnership Agreement is a trade and development agreement between the East African Community (EAC) Partner States and the EU member countries providing a framework for cooperation between the two blocs in areas of trade and development.
In a statement, the ministry noted that last year alone, the EU took in 28 per cent of Rwanda’s total exports, mainly composed of minerals, coffee, tea and horticulture products.
“The agreement provides a more predictable and rule governed transparent trade regime which will enhance FDI inflows. The regime also has simplified rules of origin which will make it easier for Rwandan products to access the EU market,” reads part of the statement.
Rwanda’s Trade and Industry minister Francois Kanimba and his Kenyan counterpart Adan Mohammed signed the trade deal in Brussels on Thursday, pursuant to the EAC council decision earlier this year for the EAC to sign the EPA with the EU around August 2016.
MINICOM says this signals a start of EAC Partner States securing the duty free quota free market access to the EU on a non-unilateral offer but contractual basis.
Countries started negotiating the EPA in 2007 and concluded the negotiations in 2014 when it was initiated by all Partner States, “commencing its legal scrubbing and translation” which was concluded early 2016.
According to the MINICOM, the signing by Rwanda and Kenya is “very important” as it marks the beginning of EAC countries signing the EPA legal text paving the way for its ratification by the individual Partner States.
Under the trade aspect of the agreement, the EU liberalised fully whereas EAC agreed to liberalise 82.6 per cent on a progressive basis over a period of 25 years after signature. The remaining 17.4 per cent of tariff lines has not been liberalised mainly constituting agriculture processed and non-products.
Included in the 82.6 per cent liberalisation is 65.4 per cent covering raw materials and capital goods already at zero duty in the EAC common external tariff.
In effect, the EPAs only further liberalised 17.2 per cent of the region’s trade with the EU.
Under the development cooperation segment, among others, the EU committed to provide support to address supply side constraints critical for the EAC economies, especially by focusing on industrialisation, infrastructure and energy development.
If the deal was not signed and ratified by all EAC partner states by September 30, Kenya feared it would lose its market to the EU.
Might be difficult to implement
Despite the signing by Rwanda and Kenya, however, uncertainty still abounds as regards what really happens in the event that not all EAC countries sign the deal.
In July, Tanzania indicated it will not sign the agreement, citing the “turmoil” that the EU is experiencing following Britain’s exit from the bloc.
Asked what would happen if Tanzania continues to drag its feet, Emmanuel Hategeka, the Permanent Secretary, MINICOM, admitted there could be difficulty.
Hategeka said: “I agree, it might be difficult to implement it if others don’t sign but we really hope that other countries also will sign and come on board in the next one month or so and thus pave way for ratification.”
Rwanda kept its commitment, he said, and when it was ready, “there was no reason not to sign.”
Uganda and Burundi are yet to sign too but Hategeka is optimistic.
Uganda’s Trade minister, Amelia Kyambadde, on Tuesday told the media her government had made up its mind and is ready to sign the deal.
Kyambadde is quoted as saying: “The EU is our major trading bloc and we are going ahead to sign the EPAs.”