Boost for Kenyan businesses eyeing EU market as deal takes effect
By Barack Oduor |
The deal opens duty-free and quota-free access for all Kenyan exports to the $18 trillion EU market and will boost bilateral trade in goods and increase investment flows.
The Economic Partnership Agreement (EPA) between Kenya and the European Union has entered into force, giving Kenyans eyeing trade in the European market a boost.
It opens duty-free and quota-free access for all Kenyan exports to the $18 trillion EU market and will boost bilateral trade in goods and increase investment flows.
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The deal is also expected to strengthen ties between the trade partners and facilitate mutually advantageous economic relations in a sustainable manner, including stimulating job creation and economic growth.
Trade and Investments Cabinet Secretary Rebecca Miano said the EU-Kenya EPA is one of the most ambitious agreements negotiated between the EU and an African country in terms of promoting economic sustainability.
"It can serve as a template for other African countries, particularly those in Eastern Africa to adapt. The agreement includes trade, economic, and development cooperation, and a chapter on trade and sustainable development which covers provisions on labour issues, gender equality, forestry and environment and the fight against climate change," Miano said on Monday.
Kenya is Eastern Africa's leading economic hub and the EU-Kenya trade relations hold substantial potential for further growth.
According to Miano, the agreement will unlock new economic opportunities as the EU is one of Kenya's topmost export destinations and second largest trading partner. Total trade between the EU and Kenya reached over €3.5 billion in 2023, an increase of 16 per cent compared to 2018.
Miano said the EPA will also create more opportunities for Kenyan businesses and exporters including high-value manufactured products as it will fully open the EU market for Kenyan products and incentivise EU investment in Kenya thanks to increased legal certainty and stability.
"The main objective of the EPA is to liberalise trade between the EU and Kenya," she explained.
The EU's imports from Kenya amount to $1.3 billion and are mainly vegetables, fruits, and flowers, while its exports to Kenya amount to $2.18 billion and are mainly in mineral and chemical products and machinery.
As in other EPAs, the EU-Kenya deal involves an asymmetrical removal of tariffs. In practical terms, the EU fully liberalises access to its market upon application of the EPA and all goods from Kenya (except arms) can enter its market without tariffs or quotas.
Kenya will now open up its market gradually to imports from the EU, benefiting from transition periods and will exclude sensitive products from liberalisation.
Kenya may also benefit from other provisions that consider its development needs such as special safeguards for agriculture, food security, and infant industry protection.
The deal has a comprehensive chapter on trade and sustainable development (TSD) reflecting a high ambition and incorporates most of the outcome of the EU's TSD review.
The agreement includes strong and binding provisions on labour standards, climate change and biodiversity, and gender equality.
It further prevents both parties from lowering labour and environmental standards to attract trade or investment.
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