Arusha, Tanzania — May 28, 2025
The East African Business Council (EABC) has urged East African Community (EAC) Partner States to adopt a collective approach when negotiating trade agreements with third parties, warning that separate bilateral deals could weaken the region’s economic integration and distort its Common External Tariff (CET).
Speaking in Arusha, Adrian Raphael Njau, the acting executive director of the EABC, said a unified stance would improve trust among Partner States, enhance negotiation leverage, and reinforce a common policy on external trade.
“Individual countries having separate tariff concessions with third parties, different from the existing EAC CET, may compel other Partner States to restrict the free circulation of goods to mitigate trade deflection,” Njau said.
The EAC Customs Union Protocol mandates coordination in external trade relations to facilitate uniform implementation of the CET, a key pillar of the EAC Customs Union. The CET ensures that goods entering the region from outside are subject to a common duty structure.
Despite this framework, several EAC countries have entered into bilateral trade agreements in recent years. Kenya, in particular, has signed separate Economic Partnership Agreements (EPAs) with the European Union and the United Kingdom. These agreements have raised concerns within the region about the erosion of collective bargaining and the potential for conflicting trade commitments.
The EAC and the EU concluded negotiations for an EPA in 2014 after seven years of talks. However, only Kenya and Rwanda signed the agreement in 2016, and only Kenya ratified it. Delays in regional implementation led to Kenya renegotiating a bilateral version of the EPA with the EU, which was signed in December 2023 and came into effect in April 2024.
A similar situation occurred following the UK’s departure from the EU. While the UK initially sought a bloc-wide trade deal with the EAC, only Kenya proceeded to sign a bilateral agreement in December 2020, ratified by both sides in 2021. The move was prompted by Kenya’s classification as a non-Least Developed Country (non-LDC), which excluded it from the preferential treatment that other EAC members receive under the EU and UK’s Generalized Scheme of Preferences.
Kenya’s bilateral deals with the EU and UK require it to progressively eliminate tariffs on most goods, excluding certain sensitive products. Meanwhile, other EAC members continue to access those markets through non-reciprocal trade schemes, though the EABC noted that utilization remains low due to restrictive rules of origin and uncertainty tied to the unilateral nature of GSP mechanisms.
The divergence in trade regimes has introduced further complications. While EU and UK goods enter Kenya based on the 2017 version of the EAC CET, the rest of the region has shifted to the updated 2022 version. The new CET introduced a fourth tariff band with a 35 percent rate on finished goods sufficiently available in the region—up from a three-band system in the earlier structure.
Njau warned that the lack of coordination on external agreements risks weakening the EAC’s common market and customs union, especially as more global partners express interest in trade deals with the region. The EAC has received Free Trade Area (FTA) proposals from countries such as China, Turkey, Singapore, Pakistan, Indonesia, and members of the Gulf Cooperation Council. The bloc is also engaged in frameworks like the EAC–U.S. Trade and Investment Framework Agreement and Kenya’s recent agreement with the United Arab Emirates.
He said third-party agreements should align with the EAC’s development goals while accounting for the varied economic status of its members. “The dual classification of Partner States should be used as a strength, not a weakness, in negotiations,” Njau said.
Despite the challenges, the EABC emphasized the importance of moving forward collectively, particularly as global trade becomes more protectionist. Njau called for inclusive trade agreements that address market access, supply-side constraints, and the broader development needs of the region.
He underscored the role of the private sector in shaping effective trade policies, noting that their active participation in negotiations is essential to ensuring that agreements are practical and serve the broader economic interests of the EAC.
