Trade row pits Kenya against Egypt

Kenya and Egypt are headed for a trade dispute that could affect the former’s tea exports following allegations that Cairo is importing sugar from Brazil and exporting it to Kenya as its own after repackaging.

The two are among the 19 members of the Common Market for Eastern and Southern Africa’s Free Trade Area, where products meeting the rules of origin enjoy preferential import taxes.

Under Comesa, a product must be fully produced in the exporting country, or the cost of landing at the port of destination must not exceed 60 per cent of the total cost of the materials used in the production of the product. The value added should account for at least 35 per cent of the ex-factory cost of the product.

Kenya says that just packaging sugar from Brazil does not meet the rules of origin threshold. Nairobi says Egypt is also exporting electronic equipment and paper materials from other countries under the same guise.

“The allegations by Kenya against Egypt were first about sugar. But the list has expanded to electronics and paper,” Comesa senior trade policy advisor Mwansa James Musonda, who is arbitrating in the dispute said.