Title
ECONOMIC PARTNERSHIP AGREEMENT BETWEEN THE EUROPEAN UNION, OF THE ONE PART, AND THE REPUBLIC OF KENYA, MEMBER OF THE EAST AFRICAN COMMUNITY, OF THE OTHER PART
Preamble
PARTIES TO THE AGREEMENT
of the one part,THE EUROPEAN UNION,
(hereinafter referred to as the "EU"),
and
(hereinafter referred to as "the EAC Partner State(s)"),
of the other part, hereinafter referred to singularly as "Party" and jointly as "the Parties",
RECALLING their commitments within the framework of the Marrakesh Agreement Establishing World Trade Organisation (WTO), done on 15 April 1994;
HAVING REGARD TO the Georgetown Agreement on the Organization of the African, Caribbean and Pacific Group of States, concluded on 6 June 1975;
HAVING REGARD TO the Partnership Agreement between the Members of the African, Caribbean and Pacific Group of States of the one part, and the European Community and its Member States of the other part, signed in Cotonou on 23 June 2000, as first amended in Luxembourg on 25 June 2005 and as amended for the second time in Ouagadougou on
22 June 2010 (hereinafter referred to as the "Cotonou Agreement"), and its successor agreement;
HAVING REGARD TO the Treaty for the Establishment of the East African Community (EAC) signed in Arusha on 30 November 1999 and its Protocol on the Establishment of the East African Community Customs Union;
HAVING REGARD TO the Economic Partnership Agreement between the East African Community Partner States, of the one part, and the European Union and its Member States of the other part, whose negotiations were finalised on 16 October 2014 (hereinafter referred to as
REITERATING their desire for a wider unity of Africa and the achievement of the objectives of the Treaty Establishing the African Economic Community;
HAVING REGARD TO the Treaty on European Union and the Treaty on the Functioning of the European Union;
CONSIDERING that the EAC Partner State(s) and the EU have agreed that their trade and economic cooperation shall aim at fostering the smooth and gradual integration of the African, Caribbean and Pacific (ACP) States into the world economy with due regard to their political choices, levels of development and development priorities, thereby promoting their sustainable development and contributing to the eradication of poverty in the EAC Partner State(s);
REAFFIRMING also that this Agreement shall be consistent with the objectives and principles of the Cotonou Agreement and, in particular, with the provisions of Title II of Part 3 thereof, on Economic and Trade Cooperation, and the corresponding provisions of its successor agreement;
REAFFIRMING that this Agreement shall serve as an instrument of development and shall promote sustained growth, increase the production and supply-side capacity of the EAC Partner State(s), foster structural transformation of the economies of the EAC Partner State(s) and their diversification and competitiveness and lead to the development of trade, the attraction of investment, technology and the creation of employment in the EAC Partner State(s);
REITERATING the need to ensure that particular emphasis shall be placed on regional integration and the provision of special and differential treatment to all EAC Partner State(s), while maintaining special treatment for least developed EAC Partner State(s);
RECOGNISING that substantial investment is required to raise the standards of living of the EAC Partner State(s);
REITERATING that this Agreement aims to implement the provisions of the EU-EAC EPA;
HAVE AGREED AS FOLLOWS:
Body
Part I. GENERAL PROVISIONS
Article 1. Scope of the Agreement
The Parties hereby establish an Economic Partnership Agreement (EPA) (hereinafter referred to as "this Agreement"). This Agreement covers:
(a) general provisions;
(b) trade in goods;
(c) fisheries;
(d) agriculture;
(e) economic and development cooperation;
(f) institutional provisions;
(g) dispute avoidance and settlement;
(h) general exceptions;
(i) general and final provisions; and
(j) Annexes, Protocols and Joint Statements.
Article 2. Objectives
1. The objectives of this Agreement are to:
(a) contribute to economic growth and development through the establishment of a strengthened and strategic trade and development partnership consistent with the objective of sustainable development;
(b) promote regional integration, economic cooperation and good governance in the EAC Partner State(s);
(c) promote the gradual integration of the EAC Partner State(s) into the world economy, in conformity with their political choices and development priorities;
(d) foster the structural transformation of the economies of the EAC Partner State(s), and their diversification and competitiveness by enhancing their production, supply and trading capacity;
(e) improve the capacity of the EAC Partner State(s) in trade policy and trade-related issues;
(f) establish and implement an effective, predictable and transparent regulatory framework for trade and investment in the EAC Partner State(s), thus supporting the conditions for increasing investment and private sector initiatives; and
(g) strengthen the existing relations between the Parties on the basis of solidarity and mutual interest. To this end, consistent with their WTO rights and obligations, this Agreement shall enhance commercial and economic relations, support a new trading dynamic between the Parties by means of the progressive, asymmetrical liberalisation of trade between them and reinforce, broaden and deepen cooperation in all areas relevant to trade and investment.
2. This Agreement also aims, consistent with Articles 34 and 35 of the Cotonou Agreement and the corresponding provisions of its successor agreement, to:
(a) establish an agreement consistent with Article XXIV of the General Agreement on Tariffs and Trade 1994 (GATT 1994);
(b) facilitate continuation of trade by the EAC Partner State(s) under terms no less favourable than those under the Cotonou Agreement or its successor agreement;
(c) establish the framework and scope of potential negotiation in relation to other issues including trade in services, trade-related issues as identified in the Cotonou Agreement or its successor agreement and any other areas of interest to both Parties;
Article 3. Rendez-vous Clause
The Parties undertake to conclude the negotiations on the subject matters listed below, within five (5) years from the date of entry into force of this Agreement:
(a) trade in services;
(b) trade-related issues, namely:
(i) competition policy;
(ii) investment and private sector development;
(iii) trade, environment and sustainable development;
(iv) intellectual property rights;
(v) transparency in public procurement;
(c) any other areas that the Parties may agree upon.
Article 4. Principles
This Agreement is based on the following principles:
(a) building on the acquis of the Cotonou Agreement and its successor agreement;
(b) strengthening integration in the EAC region;
(c) ensuring asymmetry, in favour of the EAC Partner State(s), in the liberalisation of trade and in the application of trade-related measures and trade defence instruments;
(d) allowing the EAC Partner State(s) to maintain regional preferences with other African countries and regions without an obligation to extend them to the EU; and
(e) contributing to enhancing the production, supply and trading capacity of the EAC Partner State(s).
Part II. TRADE IN GOODS
Article 5. Scope and Objectives
1. The provisions of this Part shall apply to all goods originating in the EU and EAC Partner State(s).
2. The objectives in the area of trade in goods are to:
(a) provide full duty-free and quota-free market access conditions for goods originating in the EAC Partner State(s) into the market of the EU on a secure, long-term and predictable basis in accordance with the modalities established in this Agreement;
(b) liberalise progressively and gradually the EAC Partner State(s) market(s) for goods originating in the EU in accordance with the modalities established in this Agreement; and
(c) preserve and improve market access conditions to ensure that the EAC Partner State(s) benefit fully from this Agreement.
Title I. CUSTOMS DUTIES AND FREE MOVEMENT OF GOODS
Article 6. Customs Duty
1. A customs duty shall include any duty or charge of any kind imposed on or in connection with the importation of goods and any form of surtax or surcharge in connection with such importation, but shall not include:
(a) charges equivalent to internal taxes levied on both imported and locally produced goods consistent with Article 20;
(b) anti-dumping, countervailing or safeguard measures applied in accordance with the provisions of Title VI; and
(c) fees or other charges imposed in accordance with Article 8.
The basic customs duty to which the successive reductions are to be applied shall be that specified in each Party's tariff liberalisation schedule for each product.
Article 7. Classification of Goods
1. The classification of goods in trade covered by this Agreement shall be that set out in each Party's respective tariff nomenclature in conformity with the International Convention on the Harmonised Commodity Description and Coding System (HS).
2. The Parties shall exchange all necessary information, within a period of three (3) months after a tariff modification or a change in the HS, on their applied customs duties and the corresponding nomenclatures with those products listed in Annexes I and II.
Article 8. Fees and other Charges
Fees and other charges referred to in Article 6(1)(c) shall be limited in amount to the approximate cost of services rendered and shall not represent an indirect protection for domestic products or a taxation of imports for fiscal purposes. Trade-related fees and charges shall not be imposed for consular services.
Article 9. Rules of Origin
1. For the purposes of this Part, the term "originating" means qualifying as "originating" under the applicable law of the importing Party (1) (2).
2. The EPA Council established under Article 104 (hereinafter referred to as "the EPA Council") shall, by decision, adopt a protocol governing the rules of origin at the latest five (5) years after the date of entry into force of this Agreement. Paragraph 1 of this Article shall cease to apply from the moment that such protocol becomes applicable.
3. If at the end of the five-year period referred to in paragraph 2 the Parties have not adopted such protocol, the EPA Council shall assess the application of paragraph 1 and may decide to extend that five-year period.
Article 10. Customs Duties on Products Originating In the EAC Partner State(s)
Products originating in the EAC Partner State(s) shall be imported into the EU free of customs duties, under the conditions set out in Annex I.
Article 11. Customs Duties on Products Originating In the EU
Products originating in the EU shall be imported into the EAC Partner State(s) under the conditions set out in the tariff liberalisation schedule in Annex II.
Article 12. Standstill Clause
1. The Parties agree not to increase their applied customs duties for products subject to liberalisation under this Agreement, with the exception of measures adopted in accordance with Articles 48, 49 and 50.
2. In order to preserve the prospect ofwider African regional integration processes, the Parties may decide in the EPA Council to modify the level of customs duties stipulated in Annexes II(a), II(b) and II(c) to this Agreement, which may be applied to a product originating in the EU upon its importation into the EAC Partner State(s). The Parties shall ensure that any such modification does not result in an incompatibility of this Agreement with the requirements of Article XXIV of GATT 1994.
Article 13. Movement of Goods
1. Customs duties shall be imposed once for goods originating in one Party and imported into the territory of the other Party.
2. Any duty paid upon importation into an EAC Partner State shall be refunded fully for the goods that leave the EAC Partner State of first importation to another EAC Partner State. The duty shall be paid in the EAC Partner State of consumption of the goods.
3. The Parties agree on cooperation to facilitate the movement of goods and simplify customs procedures.
Article 14. Export Duties and Taxes
1. A Party shall not institute any new duties or taxes in connection with the exportation of goods to the other Party that are in excess of those imposed on like products destined for internal sale.
2. Notwithstanding paragraph 1, the EAC Partner State(s) can impose, after notifying the EU, a temporary duty or tax in connection with the exportation of goods under the following circumstances:
(a) to foster the development of domestic industry;
(b) to maintain currency stability, when the increase in the world price of an export commodity creates the risk of a currency overvaluation; or
(c) to protect revenue, food security and the environment.
3. Such taxes should be enforced on a limited number of products for a limited period and shall be reviewed by the EPA Council for renewal after forty-eight (48) months.
4. Any more favourable treatment consisting in or in relation to taxes applied by the EAC Partner State(s) to exports of any products destined for any major trading economy shall, from the date of entry into force of this Agreement, be accorded to the like product destined for the territory of the EU.
5. For the purposes of this Article and Article 15, "major trading economy" means any developed country, or any country accounting for a share of world merchandise exports above 1 percent in the year before the entry into force of the free trade agreement referred to in Article 15, or any group of countries acting individually, collectively or through a free trade agreement accounting collectively for a share of world merchandise exports above 1,5 percent in the year before the entry into force of the free trade agreement referred to in Article 15 (1).
Article 15. More Favourable Treatment Resulting from a Free Trade Agreement
1. With respect to the goods covered by this Part, the EU shall accord to the EAC Partner State(s) any more favourable treatment applicable as a result of the EU becoming party to a free trade agreement with a third party after the signature of this Agreement.
2. With respect to the goods covered by this Part, the EAC Partner State(s) shall accord to the EU any more favourable treatment applicable as a result of the EAC Partner State(s) becoming party to a free trade agreement with any major trading economy after the signature of this Agreement. Provided that the EU can demonstrate that it has been given less favourable treatment than that offered by the EAC Partner State(s) to any other major trading economy, the Parties shall to the extent possible, consult and jointly decide on how best to implement this paragraph on a case-by-case basis.
3. The provisions of this Part shall not be so construed as to oblige the Parties to extend reciprocally any preferential treatment applicable as a result of one of them being party to a free trade agreement with a third party on the date of signature of this Agreement.
4. Paragraph 2 shall not apply in respect of trade agreements between the EAC Partner State(s) with countries of the African, Caribbean and Pacific Groups, or other African countries and regions.
5. For the purposes of this Article, "free trade agreement" means an agreement substantially liberalising trade and substantially eliminating discriminatory measures and/or prohibiting new or more discriminatory measures among Parties at the entry into force of that agreement or within a reasonable time frame.
Article 16. Special Provisions on Administrative Cooperation
1. The Parties agree that administrative cooperation is essential for the implementation and control of the preferential treatment granted under this Part and underline their commitment to combat irregularities and fraud in customs and related matters.
2. Where a Party has made a finding, on the basis of objective information, of a failure to provide administrative cooperation and/or of irregularities or fraud, the Party concerned may temporarily suspend the relevant preferential treatment of the product(s) concerned in accordance with this Article.
3. For the purposes of this Article, a failure to provide administrative cooperation shall mean, inter alia:
(a) a repeated failure to respect the obligation to verify the originating status of the product(s) concerned;
(b) a repeated refusal or undue delay in carrying out and/or communicating the results of subsequent verification of the proof of origin of the product(s) concerned;
(c) a repeated refusal or undue delay in obtaining authorisation to conduct administrative cooperation missions to verify the authenticity of documents or accuracy of information relevant to the granting of the preferential treatment in question.
4. A finding of irregularities or fraud may be made, inter alia, where there is a rapid increase, without satisfactory explanation, in imports of goods exceeding the usual level of production and export capacity of the other Party that is linked to objective information concerning irregularities or fraud.
5. The application of a temporary suspension shall be subject to the following conditions:
(a) the Party which has made a finding, on the basis of objective information, of a failure to provide administrative cooperation and/or of irregularities or fraud shall without undue delay notify the Committee of Senior Officials established under Article 106 (hereinafter referred to as "the Committee of Senior Officials") of its finding together with the objective information and enter into consultations within the Committee of Senior Officials, on the basis of all relevant information and objective findings, with a view to reaching a solution acceptable to both Parties;
(b) where the Parties have entered into consultations within the Committee of Senior Officials as referred to in point (a) and have failed to agree on an acceptable solution within three (3) months following the notification, the Party concerned may temporarily suspend the relevant preferential treatment of the product(s) concerned, and such temporary suspension shall be notified to the EPA Council without undue delay;
(c) temporary suspensions under this Article shall be limited to those necessary to protect the financial interests of the Party concerned, shall not exceed a period of six (6) months and may be renewed, and they shall be subject to periodic consultations within the Committee of Senior Officials in particular with a view to their termination as soon as the conditions for their application no longer exist.
6. At the same time as the notification to the Committee of Senior Officials under paragraph 5(a), the Party making such notification should publish a notice to importers in its Official Journal. The notice to importers should indicate for the product concerned that there is a finding, on the basis of objective information, of a failure to provide administrative cooperation and/or of irregularities or fraud.
Article 17. Management of Administrative Errors
In case of error by the competent authorities in the proper management of the preferential system of export, and in particular in the application of the rules of origin applicable for the purposes of this Agreement concerning the definition of the concept of "originating products" and methods of administrative cooperation, and that error leads to consequences in terms of import duties, the Party facing such consequences may request the Committee of Senior Officials to examine the possibility of adopting all appropriate measures with a view to resolving the situation.
Article 18. Customs Valuation
1. Article VII of GATT 1994 and the Agreement on the implementation of Article VII of GATT 1994 shall govern customs valuation rules applied to trade between the Parties.
2. The Parties shall cooperate with a view to reaching a common approach to issues relating to customs valuation.
Title II. NON-TARIFF MEASURES
Article 19. Prohibition of Quantitative Restrictions
1. All prohibitions or restrictions on the importation, exportation or sale for export between the Parties, other than customs duties, taxes, fees and other charges provided for under Article 6, whether made effective through quotas, import or export licenses or other measures, shall be eliminated upon the date of entry into force of this Agreement. No new such measures shall be introduced in trade between the Parties. This Article shall be without prejudice to the provisions of Title VI of this Part.
2. Paragraph 1 of this Article shall not extend to the following:
(a) export prohibitions or restrictions temporarily applied to prevent or relieve critical shortages of foodstuffs or other products essential to the exporting contracting party;
(b) import and export prohibitions or restrictions necessary for the application of standards or regulations for the classification, grading or marketing of commodities in international trade.
Article 20. National Treatment with Respect to Internal Taxation and Regulation
1. Imported products originating in one Party shall not be subject, either directly or indirectly, to internal taxes or other internal charges of any kind in excess of those applied, directly or indirectly, to like domestic products of the other Party. Moreover, the Parties shall not otherwise apply internal taxes or other internal charges so as to afford protection to their respective production.
2. Imported products originating in one Party shall be accorded treatment no less favourable than that accorded to like domestic products of the other Party in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use. This paragraph shall not prevent the application of differential internal transportation charges, which are based exclusively on the economic operation of the means of transport and not on the origin of the product.
3. Neither Party shall establish or maintain any internal quantitative regulation relating to the mixture, processing or use of products in specified amounts or proportions which requires, directly or indirectly, that any specified amount or proportion of any product which is the subject of the regulation must be supplied from domestic sources. Moreover, neither Party shall apply internal quantitative regulations so as to afford protection to their respective production.
4. This Article shall not prevent the payment of subsidies exclusively to national producers, including payments to national producers derived from the proceeds of internal taxes or charges applied consistently with this Article and subsidies effected through governmental purchases of national products.
5. This Article shall not apply to laws, regulations, procedures or practices governing public procurement.