EAC exports to be taxed by EU due to delay in EPA

The European Union has informed the East African Community (EAC) that the failure or delay in signing the Economic Partnership Agreement would lead to taxes on the exports of the EAC-member states. In a recent release by the EU Delegation in Nairobi said that failure to finalise the EPA process could lead to putting non-Least Developed Countries such as Kenya on the Generalised System of Preferences list. According to the statement, some of the key export products particularly from Kenya would attract re-introduction or increase in tariffs. The EPA was supposed to be concluded by July 31, 2009-but missed the deadline due to lack of consensus on rules of origin-most favoured a clause on agriculture, trade in services and sustainable development. The head of the union’s delegation to Nairobi Eric van der Linden said that he was looking forward to the success of the EPA soon. Likewise, the head of EPA unit at the DG Trade of the European Commission Jacques Wunenburger said that talk should now move from the "cost of EPA" to talk about the "cost of non-EPA". A decision to tax EAC exports by the EU would be death knell to the future of cut flowers from Kenya as it is the largest exporter to the bloc. Besides, the country’s floriculture industry has been spending a lot of money to modernize its facilities for the past decade.

Source: Toboc