EA traders fear cheaper goods from Egypt will swamp regional market

East African traders have expressed fears that subsidised Egyptian products will swamp the regional market following a decision by the East African Community to extend the Free Trade Area to Cairo.

The traders say the extension, without any qualifications based on rules of origin, would render EAC products less competitive on the market because energy costs, in particular, are substantially lower in Egypt.

Vimal Shah, the chairman of the Kenya Private Sector Alliance (Kepsa), said as long as the issue of the Rules of Origin is not addressed, there would continually be a trade dispute between the EAC and Egypt, and that the former would be the loser.

“EAC manufacturers exporting to Egypt are required to observe the 35 per cent threshold of value addition to qualify for free access to the Common Market for Eastern and Southern Africa (Comesa), of which Egypt is a member; but instead, Egypt has demanded that we observe the 45 per cent threshold it introduced against the Comesa requirement,” said Mr Shah, adding that this will undermine the equality of trade between the two parties.