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Kenya Moves Closer to Economic Partnership Deal With EU

Kenya on Monday asked for the support of the East African Community (EAC) as it moves closer to sealing an Economic Partnership Agreement (EPA) with the European Union (EU) that will grant its exports duty-free status and unlimited access to the 27-member market bloc.

The deal signed in Nairobi was approved by the European Union Council last week and will now be presented to the parliaments of both sides for ratification before it subsequently enters into force.

“This momentous step heralds a new era where Kenyan goods gain immediate and permanent duty and quota-free access to the European market. Simultaneously, European goods will also enjoy preferential access to the Kenyan market” said Trade Cabinet Secretary Rebecca Miano before signing the deal.

“This agreement not only opens up opportunities for businesses but will also create jobs and foster economic growth for our citizens.”

The deal, once signed, will be a major boost to Kenya as it will enable the country’s exports to enter the EU duty-free and without quotas. The EU is Kenya’s second-largest trading partner and its most important export market.

“The Kenya-EU partnership agreement signifies Kenya’s commitment to diversifying its export mix into Europe, with value-added manufactured products,” said Ms Miano.

Kenya is the only country in the EAC that has not been enjoying duty-free and quota-free access to the European market as the other members are designated as least-developed countries. The deal builds on negotiations for an EPA with the partner states of the EAC—which at the time were Burundi, Kenya, Rwanda, Tanzania, and Uganda—finalised in October 2014.

However, the signing of the EU-EAC agreement stalled because of discussions within the EAC on the consequences of the EPA for their economies.

The EAC initially envisaged the EU-EAC EPA as a bloc-to-bloc agreement—meaning the EPA could only enter into force after it had been ratified by all EAC partners.

However, the EAC eventually agreed that Kenya enter negotiations to implement a bilateral EPA with the EU.

President William Ruto on Monday urged other EAC members to join the deal, saying it would unlock opportunities in the premium EU market.

“This agreement that we are signing today (Monday) leaves the door open, and I say, wide open, for our EAC partners to join,” said President William Ruto at the ceremony.

The EU is Kenya’s second-largest trading partner, with a total of €3.3 billion (Ksh554.5 billion) in bilateral trade in 2022. The country’s main export to Europe is agricultural produce including tea, coffee, flowers, and fresh beans and peas.

“Kenya is a key partner for the European Union in Africa. The new Economic Partnership Agreement will boost bilateral trade even further, support investments, and create good jobs in Kenya.

“This agreement will also contribute to sustainable and fair economic growth, bringing new opportunities for companies, to the benefit of both our people. It includes the strongest social and climate commitments of any EU trade deal with an African country,” said the President of the European Commission, Ursula von der Leyen.

The EU said the EPA will create even more opportunities for Kenyan businesses and exporters, as it will fully open the EU market for Kenyan products upon entry into force.

“It will also incentivize EU investment in Kenya thanks to increased legal certainty and stability,” the bloc said.

Under the current EPA, Kenya, like other ACP partner countries, can protect some sensitive agricultural products, either by excluding them from tariff cuts or by keeping the option of triggering safeguards in case of unforeseen, sharp and sudden increase of imports from the EU.

Source: The East African