Mkapa awajibu wakenya kiaina, afunga mjadala wa EAC-EU EPAs

Cicero

JF-Expert Member
Jan 20, 2016
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By Benjamin Mkapa

The EPA issue once again emerged when, in early July, Tanzania informed EAC member states and the European Union that it would not sign the Economic Partnership Agreement (EPA) between EU and the six EAC member states.

The European Commission had reportedly proposed the signing of the EPA in Nairobi, on the sidelines of the 14th session of the UN Conference on Trade and Development (Unctad XIV).

This is a major quadrennial event where all UN member states negotiate guidance for Unctad. For the European Commission, it would have been a propitious place for a signature ceremony as it would have projected the EPA as a “trade and development” agreement to the benefit of EAC.

Nevertheless, the agreement is antithetical to Tanzania’s as well as the region’s trade and development prospects.

The EPA for Tanzania and the EAC never made sense. The maths just never added up. The costs for the country and the EAC region would have been higher than the benefits.

As a least developed country (LDC), Tanzania already enjoys the Everything but Arms (EBA) preference scheme provided by the European Union.

In other words, we can already export duty-free and quota-free to the EU market without providing the EU with similar market access terms. If we sign the EPA, we would still get the same duty-free access, but in return, we would have to open up our markets for EU exports.

Threats to domestic producers and industries

The EPA is a free trade agreement. Under it, Tanzania would have to reduce to zero the tariffs on 90 per cent of all its industrial goods trade with the EU, according duty-free access for almost all the EU’s non-agricultural products into the country.

Such a high level of liberalisation vis-à-vis a very competitive partner is likely to put our existing local industries in jeopardy and discourage the development of new industries.

Research using trade data shows that Tanzania currently produces and exports on 983 tariff lines (at the HS 6 digit level.

The EU produces and exports on over 5,000 tariff lines). If the EPA were implemented, 335 of the 983 products we currently produce would be protected in the EPA’s “sensitive list,” but 648 tariff lines would be made duty-free.

So the existing industries on these 648 tariff lines would have to compete with EU’s imports without the protection of tariffs. Will these sectors survive the competition?

These 648 tariff lines include agricultural products (maize products, cotton seed oil cake); chemical products (urea, fertilisers); vehicle industry parts (tyres); medicaments; intermediate industrial products ( plastic packing material, steel, iron and aluminium articles, wires and cables); parts of machines and final industrial products (weighing machines, metal rolling mills, drilling machines, transformers, generating sets, prefabricated buildings etc); parts of machines (parts of gas turbines, parts of cranes, work-trucks, shovels, and other construction machinery, parts of machines for industrial preparation/ manufacturing of food, aircraft parts etc).

Threatening regional industrialisation and trade
Statistics show that, in fact, for the EAC region, the African market is the primary market for its manufactured exports.

In contrast, 91 per cent of its current trade with the EU is made up of primary commodity exports (agricultural products such as coffee, tea, spices, fruit and vegetables, fish, tobacco, hides and skins).

Only a minuscule 6 per cent or about $200,000 of EAC exports to the EU is composed of manufactured goods. In contrast, of the total EAC exports to Africa, almost 50 per cent is made up of manufactured exports – about $2.5 billion.

These figures tell two stories. One, the importance of the African market for the EAC’s aspirations to industrialise.

In contrast, the EU market plays almost no role in this. Two, the EAC internal market makes up 60 per cent of its manufactured exports to Africa. Thus, the EAC regional market is extremely valuable in supporting the Community’s industrialisation efforts..

Removing an important industrialisation tool - not new export taxes

The other area where the EPA hits the heart of our industrialisation aspirations are its disciplines on export taxes.

The logic of export taxes is to encourage producers to enter into value-added processing, hence encouraging diversification and the gradation of production capacities. Developed countries themselves used these policy tools when they were developing.

The EU has a raw materials initiative aimed at accessing non-agricultural raw materials found in other countries.
According to the European Commission, “Securing reliable and unhindered access to raw materials is important for the EU.

In the EU, there are at least 30 million jobs depending on the availability of raw materials.” The EPA therefore prohibits signatories from introducing new export taxes or increasing existing ones.

For Tanzania and the EAC region with its rich deposits of raw materials including tungsten, cobalt, tantalum and so on, such disciplines in the long-run would be incongruent with our objective of adding value to our resources.

Losing important tariff revenue - shrinking the government coffers

The other area of loss resulting from the EPA is tariff revenue, and the numbers are not small.

Conservative estimates (assuming import growth of 0.9 per cent year on year) show that for the EAC as a whole tariff revenue losses would amount to $251 million a year by the end of the EPA’s implementation period Cumulative tariff revenue losses would amount to $2.9 billion in the first 25 years of the EPA’s life.

For Tanzania, the losses based on 2013–2014 import figures are about $71 million a year. Cumulatively, just for Tanzania, they come up to $700 million over the first 25 years.

The EPA to safeguard Kenya’s flower industry – a fair exchange?

The only area where the EPA is supposed to serve the interest of the EAC is by providing duty-free access to Kenya. As a non-LDC, Kenya does not have duty-free access via the EU’s EBA. Kenya’s main export item to the EU is flowers – total sales are worth just over $500,000 a year.

Without the EPA, Kenyan’s flowers would be charged a 10 per cent Customs duty. There are other Kenyan exports also – vegetables, fruit, fish – that will face tariffs.

However, the flower industry has thus far been the most vocal.

Nevertheless, all in all, Kenyan exports to the EU market (including the UK) amount to about $1.5 billion. If no EPA is signed, the extra duties charged to Kenyan exports amounts to about $100 million a year.

Is this worth signing an EPA for? The avoidance of duties of $100 million? The tariff revenue losses as the EPA is implemented (and more tariff lines are liberalised) would be comparable. This does not even include the tariff revenue losses of the other EAC LDCs, nor the challenges posed to domestic/regional industries.

Africa is a critical market for the EAC’s manufactured goods. Regional integration and trade is the most promising avenue for EAC’s industrial development. The EPA would derail us from that promise.
 

Geza Ulole

JF-Expert Member
Oct 31, 2009
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With my due respect, i have to dispute the misrepresentation of what Mkapa said on Daily News!

Mkapa did not ask for Kenya to be allowed to trade on duty free with the rest of EAC members under LDC countries category, but he suggested to them to apply for a Generalised System of Preferences Plus (GSP+) scheme.

Kenyan media should stop their stupid bigotry policy that always seeks to cohese ones opinion to fit their nationalistic agenda by distorting the truth on what was Mkapa argument. I serious don't like that Kenyan media stupid egocentric mentality.

Its time for them to educate the risk of GOK pushing for EPA as failure is looming while Kenya cannot trade as an LDC but under GSP+ scheme! A qualification of which is a procedure that needs Kenya to apply for.
 

Sammuel999

JF-Expert Member
Jun 1, 2016
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so in other words


no one is seeing Tanzania being promoted from a

LEAST DEVELOPED COUNTRY TO A

LOWER MIDDLE INCOME COUNTRY IN THE NEXT 12YRS

TALK ABOUT SHITTING WHERE YOU EAT AND MYOPIA

CAUSE KENYA IS NO LONGER AN LCD COUNTRY



TANZANIA IS BUT WELL ITS UP TO YOU IN 2-5YRS TIME YOU WILL BE REGRETTING NOT SIGNING THAT DEAL UNLESS TANZANIA WILL BE AN LCD COUNTRY FOR THE BETTER PART OF 2016-2045
 

Geza Ulole

JF-Expert Member
Oct 31, 2009
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Sammuel999 then pull big man's pants n pay ur dues as a middle income country n stop feeding our X President words. He is not ur campaign machine!

I see the demerits of cooking data as now when the time to pay tarrifs has come hell is breaking loose u victimize even those who r not supposed to pay! Typical of Nyang'aus with free rider mentality..
 

Sammuel999

JF-Expert Member
Jun 1, 2016
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well hate us or not..... what ever makes you sleep at night.... I have never met a single tanzanian in my life I have met several Somalis who we share work space I have met countless Ugandans even 3 rwandans and hundreds of south Sudanese but oddly enough I have never met a single Tanzanian in my life..... that is how unimportant you bunch are....and to cap it all JF OFFERS KENYANS THE BEST OF ON LINE EXPERIENCE!!!!


TELLS A LOT ABOUT WACHAWIS
 

Sammuel999

JF-Expert Member
Jun 1, 2016
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but anyway keep pushing the buttons on switch kenya you will eventually hit the proverbial red button ndio mtatambua just remember


countries worlds apart are never in war it's usually neighbours that go into war

USA and Russia are neighbours that hate each other (Alaska is 120km away from Russia it was Russian territory till USA bought it)

Somalia Ethiopia neighbours

Egypt Israel neighbours

france Germany neighbours

south north Korea

China and USA neighbours (LA IS JUST NEXT TO CHINA)


WELL KEEP PUSHING KENYA'S BUTTON LONG ENOUGH MTAKITAMBUA!!
 

Sammuel999

JF-Expert Member
Jun 1, 2016
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and trust me there is ALOT OF "LOVE " FOR TANZANIANS UP HERE JUST WATCH ANY KENYAN TV AND SEE
 

Usher-smith MD

JF-Expert Member
Jul 7, 2015
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Hiko kichwa cha Habari kizuri nikadhani utaweka habari kwa ufupi tena kwa kiswahili ila wewe ume kopi na kupesti
 

Barbarosa

JF-Expert Member
Apr 16, 2015
22,383
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well hate us or not..... what ever makes you sleep at night.... I have never met a single tanzanian in my life I have met several Somalis who we share work space I have met countless Ugandans even 3 rwandans and hundreds of south Sudanese but oddly enough I have never met a single Tanzanian in my life..... that is how unimportant you bunch are....and to cap it all JF OFFERS KENYANS THE BEST OF ON LINE EXPERIENCE!!!!


TELLS A LOT ABOUT WACHAWIS


Sasa unafanya nini hapa JF yetu? Kwa nini usiende kwenye social media za Wapokoti wenzako huko mkajadiliane kuchomana mikuki na visu?
 

BAK

JF-Expert Member
Feb 11, 2007
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Kwani lini imezuiliwa humu kuleta habari kutoka vyanzo vingine? Humu lugha zote mbili ambazo zinazotumika nchini zinaruhusiwa kwanini umtake muanzisha uzi atume kwa Kiswahili!? Kama huna cha maana cha kuandika pita kimya kimya tafuta uzi ambao utaweza kuelewa.

Hiko kichwa cha Habari kizuri nikadhani utaweka habari kwa ufupi tena kwa kiswahili ila wewe ume kopi na kupesti
 

simplemind

JF-Expert Member
Apr 10, 2009
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Pamoja na kufaidika na very sound elimu ya EA Mkapa does not care about us- raia wa EA. Shame Mkapa. We don't love Tanzania any less we live EA more.
 

Geza Ulole

JF-Expert Member
Oct 31, 2009
32,630
2,000
simplemind, which EA? It is only Kenya supporting EPA! Tanzania n Uganda r against EPA n hav given out their stand, while Burundi n Rwanda r quiet! If EPA is so important for Kenya than the interest of all EA members, Kenya should go n sign..
 

simplemind

JF-Expert Member
Apr 10, 2009
14,941
2,000
simplemind, which EA? It is only Kenya supporting EPA! Tanzania n Uganda r against EPA n hav given out their stand, while Burundi n Rwanda r quiet! If EPA is so important for Kenya than the interest of all EA members, Kenya should go n sign..
It's about give and take silent diplomatic way. EA ni Muungano wa equals we may agree to disagree lakini interest za region should prevail. Mkapa is an inconvenience, surely utamuelewa vipi msomi anayetamka hadharani anayetaka mabadiliko abebe mimba. Mkapa is bottleneck to EA integration. Ampumzike na amani in sunset.
 

SueIsmael

JF-Expert Member
Dec 11, 2013
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1469990657044.jpg
1469990665367.jpg
1469990677808.jpg
 

Geza Ulole

JF-Expert Member
Oct 31, 2009
32,630
2,000
It's about give and take silent diplomatic way. EA ni Muungano wa equals we may agree to disagree lakini interest za region should prevail. Mkapa is an inconvenience, surely utamuelewa vipi msomi anayetamka hadharani anayetaka mabadiliko abebe mimba. Mkapa is bottleneck to EA integration. Ampumzike na amani in sunset.
umeyasoma hayo makubaliano kwanza au unabisha kwa vile tu unataka kubisha? Pitia hapa usome halafu uje ubishane nami!
 

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