The heightened rivalry within the East African Community threatens to sink Kenya’s hard-won Economic Partnership Agreement with the European Union.

A recent case at the regional court suspending Kenya’s EPA deal with the EU raises fears that political undercurrents in the bloc could imperil the country’s annual €1.45 billion (Sh218 billion) export market in Europe. 

Kenya signed and ratified a full EPA with the EU, taking advantage of the Principle of Variable Geometry due to the delay by some member states to sign the agreement as a bloc.

Article 7(1)(e) of the EAC treaty provides for progressive cooperation among a group or groups within the Community toward wider integration schemes.

It also provides for differentiation in speeds of implementation, meaning some member states can move forward with certain integration activities or agreements while others join at a later date. 

However, the East African Court of Justice on Monday suspended the implementation of the deal for failure to consult EAC member states.

Ugandan-based think tank Centre for Law Economics and Policy on East African Integration lodged the case against Kenya on the grounds that the country’s trade pact with the EU “violated certain provisions of the treaty establishing the East African Community common market,” of which Kenya is a member. 

The move re-awakens historical differences among the EAC, with the so-called Coalition of the Willing (Tanzania and Burundi) having long resisted the EPA.

They cite fears that European goods could flood regional markets, undermine domestic industries, and weaken the bloc’s bargaining power. While Kenya and Rwanda were the only two countries in the region to sign the EPA deal with Europe in 2016, Kampala and Kigali have adopted a more cautious tone.

That divergence has also accused Kenya of pursuing a “solo economic diplomacy” as partner states feel economically disadvantaged or bypassed.

 Trade analysts had warned that Kenya’s solo move would complicate functioning of the EAC Customs Union, whose legal framework expects the bloc to negotiate external trade arrangements as a unit.

 With the rivalry, the fate of Kenya’s $1.56 billion EU export market hangs in the balance.

However, Kenya has moved to reassure exporters, investors and development partners that access to the EU market remains uninterrupted.

The Ministry of Trade and Industry, however, acknowledged the ruling had created “uncertainty” for traders and the wider business community, given the centrality of the agreement to Kenya’s export economy.

 And while Trade CS Lee Kinyanjui said the matter would be discussed at the EAC Summit in Nairobi that was set for next week, the same has been postponed to at least in January at the request of Kenya and Tanzania. 

The Kenya–EU EPA grants Kenyan goods duty-free access to the European market. The EU is one of Kenya’s largest export destinations, with Kenya exporting goods worth $1.56 billion to the bloc last year, while importing $2.09 billion. By ELIUD KIBII, The Star