Nairobi will press neighbours to finalise EU deal

Subject Implications if the EU and EAC fail to finalise a proposed trade deal. Significance Kenya is urging its East African Community (EAC) counterparts to resolve an impasse in signing an Economic Partnership Agreement (EPA) with the EU. The EPA was initialled by all parties in October 2014 and was due to be signed in July, but in the wake of 'Brexit', Tanzania and Uganda announced that they would not sign the EPA until further discussions and investigation had taken place. The countries have until October 1 to sign the agreement, otherwise existing trade deals with the EU will lapse. Impacts A collapse of the EPA process will weaken the EAC customs union, as member states will lack a common external tariff. Kenyan exporting firms could relocate to neighbouring states if access to EU markets is threatened. Without steps toward resolving Burundi's political crisis, the EU could withhold finalising any deal that affords benefits to Bujumbura.

Subject Burundian peace efforts. Significance On May 25, efforts to renew the Inter-Burundian Dialogue (IBD) ended in failure after chairperson Benjamin Mkapa, former president of Tanzania, refused to allow several high-profile Burundian civil society leaders to take part. The decision is the latest reason why opposition groups believe Mkapa should be removed from his position. Meanwhile, current Tanzanian President John Magufuli has argued that members of the East African Community (EAC) should refuse to back the Economic Partnership Agreement (EPA) with the EU until sanctions against Burundi are scrapped. Impacts President Pierre Nkurunziza may further purge the security services of ‘disloyal’ officers. Armed opposition groups based in the DRC will pose an increasing security threat. The ongoing crisis will hinder Bujumbura’s ability to respond to food and fuel shortages. The ruling party’s youth wing, the Imbonerakure, may intensify both violent actions and rhetoric.


Significance Earlier in February, Tanzanian President John Magufuli met with his Ugandan counterpart, Yoweri Museveni, on the sidelines of an African Union (AU) summit to discuss reviving the EU Economic Partnership Agreement (EPA) with the EAC, a contentious trade agreement dividing EAC members. Failure to agree on the trade deal is indicative of a broader trend, which has recently seen various initiatives aimed at deepening regional integration stall. Impacts Absent the EPA, Kenya will look to strike a bilateral trade deal with the EU. A collapse of the East Africa EPA increases the likelihood that the EU’s other major EPA in West Africa could succeed. Weak regional unity will complicate efforts to develop common responses to shared security threats.


Subject Outlook for Kenya's external relations. Significance Last week, Uganda overrode its oil pipeline agreement with Kenya by agreeing a rival deal with Tanzania in a major setback for Kenya's ambitions to lead economic integration in the East African Community (EAC), while boosting its own oil export plans. It comes amid several other external challenges, notably the deputy president's case at the International Criminal Court (ICC) and overspill from the Somali conflict. Impacts Deals signed during the president's visit to Israel will likely result in skills and technology transfer to improve Kenya's water security. Recent US airstrikes against an al-Shabaab training site in Somalia will boost the AMISOM mission. However, the EU decision to cut AMISOM funding by 20% will pose longer-term difficulties unless regional states find substitute funding.


Significance Opposition parties reject the new dates, stating that their main demand is for Nkurunziza to step down before polls take place. The new dates adhere to East African Community (EAC) recommendations to delay elections. While the regional bloc may have more influence over Burundi than other external players, it will struggle to play an effective diplomatic role in ending the political crisis. Impacts A prolonged crisis will worsen a poorly performing economy, which is heavily dependent on foreign support. Belgium, the largest donor, may cut further bilateral support should Nkurunziza secure a third mandate. Economic disruption continues to hurt agricultural supply chains across the country, risking food security.


Subject Outlook for Kenyan-Tanzanian relations. Significance The Kenyan and Tanzanian governments in early September continued disagreements over a trade agreement with the EU. The deteriorating relationship comes at a time when the stability of the East African Community (EAC) is already strained by other crises. Impacts Attempts to forge bilateral agreements within the bloc or with non-EAC states could cast doubt on the EAC's future. Uncertainty over the long-term future of the EAC will worry investors and could reduce investment. Tensions lower the probability of instating a common currency in East Africa by 2024. Domestic political pressures could push Kenyan and Tanzanian leaders to demonise each other as a distraction.


2021 ◽  
pp. 1-12
Author(s):  
Jakob Rauschendorfer ◽  
Anna Twum

Abstract The Common External Tariff (CET) of the East African Community (EAC) customs union has long been considered the cornerstone of the most successful example of regional integration in Sub-Saharan Africa. In this paper, we assess the implementation of the EAC-CET using a novel dataset of country- and firm-level deviations from the common tariff regime constructed by digitizing information in gazettes published by the Secretariat of the EAC between 2009 and 2019. Employing these data, we present five patterns on EAC tariff policy: (i) increased usage of country-level deviations from the common tariff regime render the EAC-CET less and less ‘common’; (ii) Kenya, Tanzania, and Uganda predominantly use unilateral deviations to increase external protection while Rwanda mostly decreases tariffs; (iii) Kenya, Tanzania, and Uganda increase tariffs for the same classes of products, but target different industries; (iv) unilateral tariff reductions at the country level are mostly used to facilitate access to inputs; (v) data on firm-level exemptions suggest that private sector development in the EAC would benefit from lower tariffs on intermediate inputs. Our findings demonstrate an incipient but clear trend in the EAC away from a communal tariff regime and towards national and more protectionist trade policies.


Subject Progress in towards an East African monetary union. Significance In November 2013, East African Community (EAC) partner states endorsed the East African Monetary Union (EAMU) Protocol, outlining plans for full monetary union by 2024. For the union to happen, at least three partner states must be willing to cede their monetary policy independence. Furthermore, EAC states have agreed to certain convergence criteria that they will need to meet. Impacts Closer economic and political integration will offer benefits to the EAC even without a monetary union. Domestic taxes will be insufficient to fund projects, forcing increased borrowing to the detriment of convergence criteria. Worsening political crises in South Sudan and Burundi may erode their regional standing and complicate diplomacy. Kenya and Tanzania’s current trade dispute with the EU foreshadows larger regional economic clashes ahead.


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