EU reassures Kenya on 'win-win' EPA trade deal after rollout

Vertical Agro Limited, a fresh produce processor in Naivasha, Nakuru county. [File, Standard]

Kenya and the European Union (EU) have renewed their commitment to the full implementation of the European Union-Kenya Economic Partnership Agreement (EPA), which came into force on July 1.

Trade Cabinet Secretary Salim Muvrya met the Director General for Trade at the European Commission Dora Correia in Nairobi on Friday, where the two parties hailed the deal as mutually beneficial despite criticism from certain quarters for opening up the domestic market for tax-free goods from the 27-country bloc after 25 years.

The EPA between the EU and Kenya was concluded in June last year and signed by both parties on December 18, giving Kenyan goods unfettered access to the European market except for weapons.

The agreement aims to implement the provisions of the EU-East African Community (EAC) EPA, and it remains open to other EAC countries.

The EPA and its ambitious commitments represent a crucial deliverable of the EU's 2021 Trade Policy Review and its trade policy with Africa, helping the EU deepen and expand its current trade agreements with African countries, and enhance their sustainability objectives.

Mr Mvurya said the EPA provides Kenyan exporters with stable and predictable access to the European market, which encompasses 27 countries and a robust 14 trillion Euro economy.

The new framework replaces a temporary arrangement, offering Kenyan goods immediate duty-free and quota-free access to European markets.

The CS said the trade deal would transform Kenya’s export sector by fostering a stable environment conducive to long-term planning and investment.

This predictability, he said, is particularly important for industries like leather, where Kenya has substantial livestock herds.

“The agreement secures a significant market for Kenyan leather products, from industrial footwear to fashion accessories, and will attract further investments from both European and Kenyan firms,” he said.

Ms Correia underscored the agreement’s commitment to ensuring environmental sustainability.

Both parties pledged to advance trade and investment in an environmentally responsible manner, aligning with Kenya’s green economy goals and supporting the export of sustainably produced goods, which are increasingly in demand in Europe.

Ambassador and Head of the European Union delegation to Nairobi Henriette Geiger noted that the EPA also opens up opportunities for expanding trade in services, a growing segment of Kenya’s export profile.

Future discussions will explore broader access to European markets for Kenyan professionals, such as engineers, doctors, and artists.
The EU is Kenya’s second-largest trading partner and its most important export market. Total trade between the EU and Kenya reached €3 billion (Sh413 billion) in 2023, an increase of 16 per cent compared to 2018.

Trade between the EU and Kenya is balanced, as opposed to Kenya’s trade with other major partners, with a slight surplus in the EU’s favour of €466 million (Sh64.1 billion).
The EU’s imports from Kenya amount to €1.2 billion (Sh165.5 billion) and are mainly vegetables, fruits, and flowers. EU’s exports to Kenya amount to €1.7 billion (Sh234.5 billion) and are mainly in mineral and chemical products and machinery.

The EU is Kenya’s biggest export destination, with 13.6 per cent of its total exports in 2023, followed by Uganda (9.5 per cent) and the United States (8.7 per cent).  
Kenyas mainly imports from China (17.7 per cent), the United Arab Emirates (15.1 per cent), and India (9.5 per cent); the EU is ranked in fourth place, with 8.1 per cent of total Kenyan imports.

The main objective of the EPA is to liberalise trade between the EU and Kenya.

As in other EPAs, the EU-Kenya EPA foresees an asymmetric removal of tariffs. In practical terms, this means that the EU fully liberalises access to its market immediately upon application of the EPA and all goods from Kenya (except arms) can enter the EU market without tariffs or quotas.

Kenya will open its market gradually to imports from the EU, benefitting from transitional periods. In addition, Kenya will be able to exclude sensitive products from liberalisation.
Kenya may also benefit from other provisions that consider its development needs such as special safeguards for agriculture, measures on food security and infant industry protection.

The agreement includes a chapter on agriculture geared towards sustainable agricultural development, including food and nutrition security, rural development, the sustainable use and management of natural and cultural resources, and income and job creation in the agricultural sector.

This chapter guarantees that the EU will not apply export subsidies, even in times of market crisis, and commits the Parties to a deepened policy dialogue on agriculture and food security, including transparency as regards their respective domestic policies.