The European Commission (EC) is increasing the pressure on the East African Community (EAC) to sign the free trade deal known as an Economic Partnership Agreement (EPA) with the European Union (EU). Both options would entail more stringent rules of origin and higher duties on EU imports than an EPA, burdening companies that buy machinery and capital goods from Europe.
The interim EPA, also known as a Framework EPA (FEPA), is the first legally binding step towards a full EPA, a new trade framework that replaces the preferential, non-reciprocal trade system between the EU and the African, Caribbean and Pacific (ACP) Group of States that expired in 2007. Talks have stalled due to EAC fears concerning reduced policy space, declining tariff revenue and damage to local industry from EU imports. Compensation aid has also been a source of dispute. The deal would require Burundi, Kenya, Rwanda, Tanzania and Uganda to liberalise tariffs on 82.6 percent of EU goods imports by 2033, while the EU liberalises all tariffs.