Egyptian import restrictions threatens trade war

Kenya and Egypt could be heading for further trade disputes following the imposition by Egypt of import duty on Kenyan tea, Reuters reported on Wednesday. The report quoted Kenyan traders as saying that a large consignment of tea had been blocked at Egypt's Port Said after the North African country insisted on charging a 33 percent duty. According to traders, the move was in retaliation for the Kenyan government's refusal to allow imports of Egyptian paper sacks into Kenya duty free.

Kenya and Egypt last year were locked in a trade dispute when Egypt barred a Kenyan tea consignment worth millions of dollars from entering Port Said after Kenya increased duty on Egyptian tyres and rice. "This is a bilateral dispute. Tea has again been used as a bargaining chip," Reuters quoted a senior government official as saying on Wednesday.

Both countries are members of the Common Market for Eastern and Southern Africa (COMESA) trade bloc, and have signed a COMESA free trade agreement. The agreement, however, permits any member country to impose import duty on selected goods if it can prove that any of its industries are under threat from imports. Egypt is the third-largest buyer of Kenyan tea after the UK and Pakistan, Reuters said.