East African Community says will delay signing trade deal with EU

September 8, 2016 9:41 AM EDT

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By Fumbuka Ng'wanakilala

DAR ES SALAAM (Reuters) - The East African Community trade bloc will delay signing a trade agreement with the European Union, originally set for Oct.1, Tanzanian President John Magufuli said on Thursday.

Kenya and Rwanda signed the agreement earlier this month, but it needs approval from all members of the East African Community bloc to take effect.

The pact, known as the Economic Partnership Agreement (EPA), gives products from EAC member states duty- and quota-free access to the EU as long as they meet health and safety standards.

"We have given ourselves three months to discuss further the signing of the EPA agreement, and we will meet in January 2017 over this issue," Magufuli, who is also the East African Community chairman, said at a meeting of fellow heads of state in Dar es Salaam

"We appeal to the EU not to punish Kenya by denying it access to the European market," he added.

Kenya stands to lose the most without the agreement. Member states Tanzania, Burundi, Uganda and Rwanda would continue to get duty- and quota-free access under the EU's Everything But Arms initiative, since they are classified as least developed countries.

Governments in the region want to ensure that exports such as tea and fresh flowers, which are major sources of foreign exchange, are not hampered by any tariffs on trade with Britain after it leaves the European Union.

"Our decision to move together as East Africa is not negotiable. We agreed that the Economic Partnership Agreement, though already signed by two countries, we are going to give ourselves three months so we can move together as a community," Kenyan Deputy President William Ruto said.

Tanzania has said on Wednesday it would not sign the agreement and urged neighboring countries to back a delay pending discussions on its effect on the region's manufacturers.

"We are giving ourselves more time to synchronized our understanding. We need to achieve market access of the EU market with industrialization of our countries. We cannot continue to export raw materials," Ugandan President Yoweri Museveni said.

"We say to our European Union friends, please don't panic ... don't panic. Give us another three months and you will see our position."

EAC member states initialed an interim EPA deal in 2007 and another in 2014. Governments were given two years from the October 2014 agreement to ratify the deal in national parliaments.

South Sudan, which joined the bloc this year, was not part of initial negotiations of the deal, which began in 2002.

The EAC trade bloc had a combined gross domestic product of $169.5 billion at the end of last year.

(Reporting by Fumbuka Ng'wanakilala; Editing by George Obulutsa, Larry King)

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