Trade Ministers for Rwanda and Kenya have on Wednesday September 1st 2016 signed the EAC-EU EPA agreement in Brussels Belgium, pursuant to the EAC Council decision earlier in the year for the EAC to sign the EPA with the EU Party around August 2016. This signals a start of the EAC Partner States securing the Duty Free Quota Free market access to the EU on a non-unilateral offer but contractual basis.
All EAC members have been negotiating the EPA since 2007 and concluded the negotiations in 2014 when it was initialed by all EAC Partner States, commencing its legal scrubbing and translation which was also concluded early 2016.
The signing of the EPA this September 1st 2016 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.
This EAC-EU Economic Partnership Agreement, commonly referred to as the “EAC-EU EPA” is a trade and development agreement between the EAC Partner States and the EU Member Countries. It provides a framework for cooperation between the two blocs in the areas of trade and development.
The EAC Partner States are among a number of regional groupings from the African, Caribbean and Pacific (ACP) regions that have negotiated and concluded similar WTO-compatible trade arrangements with the EU.
Under the trade chapter of the agreement, the EU liberalized 100% whereas EAC agreed to liberalize 82.6% on a progressive basis over a period of 25 years after signature.
The remaining 17.4% of tariff lines has not been liberalised mainly constituting agriculture processed and non-products. Important to note that included in the 82.6% liberalization is 65.4% covering raw materials and capital goods already at zero duty in the EAC Common external tariff.
In effect, EPAs only further liberalized 17.2% of our trade with the EU. Under market access, the chapter also provides for trade defensive and safeguard measures that may be taken by a partner State when there is an injury to the economy.
This can be applied in case of the liberalization on equipment, intermediate and finished products, among others.
Under the Development cooperation chapter, the EU committed to provide support to address supply side constraints that are critical for the EAC economies, especially by focusing on industrialization, infrastructure and energy development.
In 2015, EU accounted for 28% of Rwanda’s total exports mainly composed of Minerals, Coffee, Tea and horticulture.
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.
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