Deadline looms for signing of UK-EAC Brexit trade pact

Deadline looms for signing of UK-EAC Brexit trade pact

Kenya is racing against time to sign a post-Brexit trade deal with the UK, as ideological differences among EAC member states threaten to derail negotiations for a collective trade agreement.

Having only four months to the December 31 expiry of the current trade arrangement, in which EAC partner states enjoy duty-free and quota-free access to the lucrative UK market, Kenya is starting to lose patience with the slow pace of negotiations at the regional trade bloc level, The EastAfrican has learned.

As a Lower Middle-Income country, Kenya stands to lose the most if the EAC does not sign a collective post-Brexit trade deal with the UK, as its exports will become subject to taxes and other restrictions.

Deadline looms for signing of UK-EAC Brexit trade pact

The other EAC member states, which are classified as Least Developed Countries (LDCs), will continue to enjoy unrestricted access to the British market.

Kenya and Rwanda were seeking to be allowed to negotiate bilateral deals with the UK that will allow in EAC partners wanting to join later; the proposal was opposed by Uganda.

“A decision, which includes options of the application of variable geometry, will be reached in the coming days,” said Kenya’s Trade Permanent Secretary Johnson Weru in an interview with The EastAfrican.

Variable geometry, in global trade terms, refers to a situation in which member countries of a regional trade bloc enter into trade agreements as individuals rather than as a group.

Kenya is by far EAC’s biggest trade partner with the UK, having exported goods worth $393 million last year against imports of $349 million.

Tanzania sold $60 million worth of goods to the UK in 2018 against imports of $170 million, while Uganda exported $10 million against imports of $81 million in the same year, as per the latest available trade data.

Kenya’s frustrations were heightened last week after Tanzania, Burundi and South Sudan skipped a preparatory negotiation meeting between the EAC and the UK, making it difficult to chart a way forward.

The EAC is supposed to have signed a draft agreement by the end of September, which is now looking more unlikely after the initial meeting last week was downgraded to “consultative talks” rather than a decisive, agenda-setting forum.

Member states could not agree on the September timeline that Kenya is supporting, terming it as being too short.

The available timetable requires intense talks within the next five weeks, after which a draft agreement reached by negotiators is submitted to each EAC partner states for approval.

A proposal by the UK, seen by The EastAfrican, shows that Britain has proposed the same type of duty-free and quota-free privileges to goods from the EAC, with safeguards and flexible rules of origin similar to those under the current European Union agreement.

London proposes the existing EU-EAC agreement to be the basis for negotiations, saying that “deviating substantially would require a new mandate and could take many years”.

Opponents of the timetable, like Uganda, want talks to continue until December this year. Kampala says that will allow sufficient time to discuss the pros and cons of the new deal, but Nairobi argues that the extended deadline will not allow room for national debates because the transitional period ends on December 31.

Britain, which voted to exit the EU in 2016, formally left the bloc in January this year. A transitional period of one year means that all previous trade deals it signed with Kenya, through the EU, will continue until the transitional period is over.

In July, Kenyan President Uhuru Kenyatta and UK Prime Minister Boris Johnson spoke on phone and authorised post-Brexit discussions.

State House spokesperson Kanze Dena-Moraro, at the time, said the talks would happen within the confines of the EAC integration.

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