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Why Tanzania’s Magufuli won’t sign EU trade deal

Tanzania’s Magufuli
Tanzania’s Magufuli
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Tanzanian President John Magufuli has maintained his hard-line stand on signing the Economic Partnership Agreement (EPA) with the European Union, saying it threatens local industries.

The no-nonsense leader said his country needs to industrialise hence the need to cushion young enterprises from European competition, but opened the door for further negotiations over deadline extension.

He made the remarks at a tense six-hour meeting at the Magogoni State House in Dar es Salaam, effectively shattering any real hopes for consensus among the East African Community (EAC) member states before the October 1 deadline.

“In Tanzania, we have already resolved to create an industrialised economy; so if we are to adopt this agreement the way it is right now, the question would be how can we safeguard those industries from competition with European industries?” Magufuli posed.

The meeting ended with a proposal that the EAC pushes the date for the final decision on the bloc’s commitment on the EPA to January next year. Mr Magufuli, also the chairman of the EAC, asked the other regional leaders, including Kenya’s Deputy President William Ruto, to consider seeking an extension of the deadline from the EU to allow for further deliberations, saying this would a “win-win” for all.

On Thursday, Mr Ruto had made a last-ditch effort to convince the Tanzanian President to reconsider his stand on the trade pact that guarantees exporters unlimited access to the European market.

The DP, who represented President Uhuru Kenyatta, said after long and candid consultations, they had agreed that more time and deliberation are needed for all member states to move together as a bloc.

Kenyan exporters are staring at huge monthly taxes of at least Sh600 million if regional leaders fail to agree on a deal before the October 1 deadline. Kenya is the only nation that stands to lose access to Europe because it is not grouped among the Least Developed Countries and does not, therefore, benefit from the unilateral Everything But Arms protocol.

Exporters are already considering cutting their prices to remain competitive with hopes for consensus fading by the day reluctance. Magufuli said that there were a number of contentious issues that Tanzania would like to be ironed out first before signing the deal, including how the EAC would protect its industries.

Another issue of contention, according to the Tanzania President, is the likely impact on the region’s agricultural sector – which is the largest contributor of GDP – as imported produce from Europe would likely be cheaper considering that EU farmers largely benefit from subsidies.

“Imports are also a major source of income in our countries. In Tanzania, for example, we estimate that we would have lost 45 per cent of income from EU in 25 years,” said Mr Magufuli.

Burundi, which has also been reluctant to sign up for the EPA is protesting an embargo slapped by the EU following political unrest. Mr Magufuli also said EAC would need to make a thorough review on how the Brexit will impact the execution of EPA since the UK has been a major trading partner with the region.