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Daily Nation : February 16th 2014
SUNDAY NATION February 16, 2014 33 BUSINESS INDUSTRY | Country risks massive economic disruptions Impasse on trade talks threatens Kenya’s quota-free market status Failure to agree on 10-year partnership deal could see hitherto untaxed exports draw as much as 15pc duty BY ZEDDY SAMBU @zeddysambu email@example.com the duty-and quota-free market access with the key European Union trade area met a sudden deadlock that blocked the signing of the bilateral Economic Partnership Agreements (EPAs). The delayed conclusion of an K EPA stalled following disagreements touching on economic and development co-operation, rules of origin, export taxes and the most-favoured nation clause. These sticking points are contested by the East African Community, which is negotiating for a common position for the region. Trade ministers from the East African Community held talks with the European Commissioner for Trade at the end of January. Kenya’s delegation was led by East African Affairs secretary Phyllis Kandie, who also chairs of the Council of Ministers. The EU delegation was led by Trade commissioner Karel De Gucht at the talks meant to have been concluded seven years ago, but which are running into their tenth year. Should Kenya not sign the Economic Partnership Agreements, its trade with Europe would revert to the less-generous terms of the General System of Preferences where some of its products, which have been enjoying zero duty, would attract attracting charges of between 8.5 to 15.7 per cent. These products include cut flowers, fresh fruit and vegetables, fish and fish products, textiles and apparel, nuts, hides and skins. The EPAs are expected to enya’s delegation to the recent talks in Brussels to craft a trade deal to retain SUNNY SUNDAY “In a modern economy, a famine is a moral and intellectual disgrace, yet another blot on our tattered national CV.” Page 31 PSV owners sue county over ‘illegal’ Finance Act BY JAMES KARIUKI @kamaukariuki firstname.lastname@example.org Matatu operators in Naivasha sub-county have moved to court seeking to have the Nakuru County Finance Act that increased service levies scrapped. The operators, led by Mr John Methu, said they are opposed to the new levies because they were not involved in the decision-making process as citizens. Lawyer Winfred Konosi urged Lady Justice Abigail Mshila to let the traders seek justice in court since the county government had blocked all avenues to dialogue. The case was certified as urgent. “My clients have suffered as the county government has insisted that the new levies must be paid before any form of meetings can take place,” Mr Konosi said. The operators have accused Na- kuru Governor Kinuthia Mbugua and his assembly of fleecing traders by imposing illegal levies. Mr Methu said county PARTNERSHIP Why bilateral talks stalled Disagreements on eco- nomic and development co-operation, rules of origin, export taxes and the mostfavoured nation (a status where a country enjoys all lowered tariffs and reductions of trade barriers) clause Divergent views among EAC members on agreement EU’s stance on existing customs union with other trade blocs to which Kenya is party — such as the Africa Growth Opportunity Act replace the General System of Preferences (GSP), preferential trade deals that the World Trade Organisation has rejected but which would apply in case of failure to establish a comprehensive EPA trade agreement. The United Nations Conference This week’s indicators MARKET PERFORMANCE Points Close NSE20 6.67 1 week change UP TOP GAINERS Price Index 4838.47 Pan Africa Unga Group CFC Stanbic 115.00 22.00 102.00 % 22.34 10.00 9.68 BIGGEST LOSERS Price 151.00 BOC Kenya Car and General 40.00 EABL 243.00 % -10.65 -9.09 -6.18 TOP TRADERS Price(sh) Safaricom 11.80 Equity Bank 33.00 Co-op Bank 17.70 Shares(m) 50m 18m 5m MARKET TURNOVER Friday Equity: Bond: Sh382mn; Sh4bn; Prev Sh569m Sh10bn MACRO INDICATORS Interest rates Latest(%) 91-day T-Bills 182-day T-Bills Compiled by Joshua Masinde 9.156 20/02/2014 10.357 19/02/2014 on Trade and Development Secretary General Mukhisa Kituyi, Kenya’s minister of Trade and Industry from 2002 to 2007, was the lead negotiator for Eastern and Southern Africa ministers at the European Union-ACP EPA talks. He chaired the Council of Ministers for the Common Market for Eastern and Southern Africa and the African Trade Ministers Council. He also served as chairman of the Council of Ministers of the ACP Group of States, and was convenor of the agriculture negotiations carried out at the WTO in 2005. Ten years on, and with Kenya under pressure to sign the protocol or risk massive disruptions to the economy, fingers are being pointed at the negotiating skills of the delegation in which the majority of the negotiators are new, coming in with the new government in 2013. This has prompted the hiring of the Kenya Institute for Public Policy Research and Analysis, a public policy think tank, to strengthen the government’s negotiating position. “We are doing a paper for the Ministry of Foreign Affairs and International Trade on the implications of EPAs on Kenya. We are trying to back up the government,” said a top Kippra official, who did not want to be named. CONTINUED ON PAGE 34 government employees were implementing the new levies without regard to the protests and complaints lodged by the traders across the county. Lady Justice Mshila allowed FILE | NATION A montage of some of the products Kenya exports to the European Union under a zero duty regime. The products, including cut flowers and fresh fruit and vegetables, could attract duty if the country fails to sign an Economic Parnership Agreement with the EU by October. the suit to go into full hearing but declined to grant exclusive orders stopping the new charges as sought by the traders. In their suit, Mr Methu, together We’re doing a paper on implications of EPAs to Kenya... to back up government” Kenya Institute of Public Policy Research official with Maruti United, Aberdare Line, Mau-Narok Nissan Group, New Nairobi-Naivasha United and Naivasha PSV Operators Association, said their constitutional rights had been infringed and sought the court’s relief to have them restored. The Finance Act was enacted last December 11 and immediately became enforceable. Mataus, which used to pay a flat fee of Sh700 per month, are now being charged Sh1,500, in addition to the annual fee of Sh2,000. The court allowed the traders to summon the governor and his government via a public announcement in the Daily Nation. Anyone, wishing to be enjoined can do so before the matter comes up for hearing in mid-February.
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