In a significant development, the European Commission has given its nod to Kenya’s Economic Partnership Agreement (EPA) with the European Union. This move is a crucial step towards granting Kenyan goods duty-free access to the vast European market.
The European Commission, responsible for negotiating trade deals on behalf of the EU, has formally endorsed the EU-Kenya EPA and forwarded it to the European Council for the next steps.
With only two remaining hurdles to clear—approval from the European Council and the European Parliament—the realization of Kenya’s momentous trade deal is within reach.
The Commission stated in a weekend release, “The EU-Kenya Economic Partnership Agreement (EPA) has taken a significant step towards approval, with the Commission presenting proposals for signature and conclusion to the Council.”
Upon signing, this agreement will revolutionize Kenya’s trade prospects. It will enable Kenyan exports to enter the European Union without facing tariffs or quotas. The European Union stands as Kenya’s second-largest trading partner, making it a vital export destination.
It’s worth noting that Kenya has been the exception within the East African Community (EAC), lacking the privilege of duty-free and quota-free access to the European market while other EAC member states have enjoyed such benefits as least-developed countries.
This agreement builds upon earlier negotiations involving the EAC partner states, including Burundi, Kenya, Rwanda, Tanzania, and Uganda, which concluded in October 2014.
The EU-EAC EPA faced delays due to internal discussions within the EAC regarding its potential impact on member economies.
Initially, the EAC viewed the EU-EAC EPA as a bloc-to-bloc agreement, necessitating unanimous ratification by all EAC partners for it to take effect.
However, the EAC eventually reached a consensus allowing Kenya to engage in bilateral EPA discussions with the EU. Other EAC nations, including South Sudan and the Democratic Republic of the Congo, which joined the bloc in 2016 and 2022 respectively, retain the option to join this agreement.
In 2022, total trade between the EU and Kenya reached €3.3 billion (approximately Sh518 billion), marking a remarkable 27 percent increase compared to 2018 figures. Negotiations on this trade pact concluded on June 19, 2023.
Kenya’s primary exports to Europe encompass a variety of agricultural products, such as tea, coffee, flowers, fresh beans, and peas.
As the EU-Kenya Economic Partnership Agreement edges closer to becoming a reality, Kenya is poised to unlock significant economic opportunities and solidify its position as a key player in global trade.
Photo Credit: Zheng Huansong/PA.
By: Montel Kamau
Serrari Financial Analyst
3rd October, 2023
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