The East African Business Council (EABC), a regional voice of private sector associations and corporates within the East African Community (EAC), has urged partner states to negotiate trade agreements with third parties collectively as a bloc, warning that unilateral deals could undermine regional integration efforts. ALSO READ: EABC’s Adrian Raphael Njau advocates for stronger EAC market In a statement issued on May 28, from EABC headquarters in Arusha, Tanzania, the council emphasized that concluding separate trade agreements with third parties may erode trust among partner states and distort the Common External Tariff (CET), a key pillar of the EAC Customs Union. “A unified approach will enhance trust among partner states, improve negotiation leverage, and uphold a common policy in the field of external trade,” said Adrian Raphael Njau, the Acting Executive Director of EABC. The EAC Customs Union Protocol mandates coordination of trade relations with foreign countries to ensure uniform implementation of the CET. This instrument imposes a common duty on goods entering the EAC Customs Territory from the rest of the world. However, the EABC has expressed concern over the growing number of bilateral trade deals being negotiated by individual partner states outside the agreed EAC framework. “Individual countries having separate tariff concessions with third parties which is different from the existing EAC CET may compel other partner states to restrict free circulation of goods to mitigate trade deflection,” Njau said. ALSO READ: EABC pushes for 35 per cent common external tariff rate Although Article 37 of the EAC Customs Union Protocol permits partner states to enter into agreements independently, so long as they do not contradict the protocol, the council underscored the need to follow the proper procedures to avoid conflict and fragmentation of the regional trade policy. Despite efforts to negotiate as a bloc, the regional bloc has struggled to conclude reciprocal trade agreements with global partners. According to EABC, separate Economic Partnership Agreements (EPAs) signed by individual partner states with third parties reflect the growing difficulty in reaching consensus on external trade deals as a bloc. The EABC cited Kenya’s bilateral agreements with the European Union and the United Kingdom as examples of this challenge. ALSO READ: EABC roots for common approach in regional integration process The Council noted that although the EAC and EU concluded an EPA in 2014 after seven years of negotiation, only Kenya and Rwanda signed the agreement in 2016. Kenya ratified it but was unable to implement it without approval from the EAC Summit. This led to a renegotiation with the EU, resulting in a bilateral Kenya-EU EPA signed in December 2023 and enforced in April 2024. Similarly, the EABC pointed to the post-Brexit period when the UK approached the EAC for a continuity agreement. Most partner states argued the proposed timeline was too short, while Kenya proceeded with a bilateral EPA that came into force in March 2021, largely mirroring the EAC-EU EPA. The EABC explained that one factor behind Kenya’s decision to negotiate separately was its classification as a non-Least Developed Country (non-LDC), unlike most of its EAC counterparts. Njau stressed that third-party agreements must align with EAC objectives while being sensitive to the development disparities among partner states. “Dual classification of development of EAC partners should be used as strength not weakness when negotiating trade agreements with third parties,” he emphasized, advocating for inclusive strategies that accommodate the region’s diverse economic capacities. ALSO READ: EABC discusses regional food insecurity response plan The Council also noted that while non-reciprocal GSP schemes with the EU and UK offer some market access, they are underutilized due to restrictive rules of origin and the unilateral nature of such arrangements, which can be revoked at any time. Moreover, differences in tariff structures further complicate the region’s external trade posture. For instance, while Kenya is still applying the 2017 CET version in its EPAs with the EU and UK, other EAC states have adopted the updated 2022 CET, which introduced a fourth tariff band to strengthen regional production and protect sensitive sectors. In response to growing global trade uncertainty, EABC is urging EAC partner states to analyze the implications of existing EPAs for regional commitments and the African Continental Free Trade Area (AfCFTA). To preserve the gains made under the Customs Union and Common Market, the council calls for a collective review of EPAs signed with the EU and UK, ensuring alignment with the bloc’s common external trade policy. ALSO READ: Private sector should drive integration process: new EABC boss The EABC underscores the importance of negotiating new trade agreements with global partners as a bloc, especially where interest in Free Trade Agreements (FTAs) with the regional bloc has already been expressed. It also emphasizes that the private sector must be actively involved throughout all stages of third-party trade negotiations to ensure that resulting agreements are inclusive, practical, and reflective of both public and private sector interests.
