- Kenya stands to benefit from duty-free and quota-free access to the expansive opportunities that historic Economic Partnership Agreement (EPA) presents with the 27-member EU bloc.
- President Ruto has lauded EPA, saying it seeks to put real money into the pockets of ordinary people (in Kenya).
- Kenya aims to roll out provisions contained in the EU-East African Community EPA, and will be open for regional countries to join in the pact in the future.
Kenya and the European Union (EU) have taken a significant stride towards strengthening their trade relations with the signing of the Economic Partnership Agreement (EPA) in Nairobi.
This landmark agreement, which now awaits endorsement from lawmakers on both sides, is poised to bolster bilateral trade in goods, foster increased investment flows, and contribute to sustainable economic growth.
As East Africa’s largest economy, Kenya stands to benefit from duty-free and quota-free access to the expansive opportunities that this pact presents with the 27-member EU bloc.
“The core of this agreement is to put real money into the pockets of ordinary people,” said President William Ruto at the signing ceremony graced by President of the European Commission, Ursula von der Leyen.
European Commission chief: EPA is a ‘win-win’ pact for both parties
Notably, Kenya aims to implement the provisions contained in the EU-East African Community (EAC) EPA, and will be open for other East African Community (EAC) countries to join in the future, the EU noted in a statement.
On her part, von der Leyen termed the agreement a “win-win” deal on both sides while urging other members of the EAC to embrace the deal whose talks finalised earlier in June 2023.
One of the key facets of the EPA is its emphasis on job creation on both sides. By fostering targeted cooperation and facilitating economic development in Kenya, the agreement aims to uplift communities and contribute to the nation’s prosperity.
At the moment, this agreement stands out as the most ambitious trade deal the EU has ever signed with a developing country, particularly due to its comprehensive sustainability provisions. These provisions encompass critical aspects such as climate and environmental protection, labour rights, and gender equality.
The EPA holds the promise of being a transformative force for both Kenya and the EU. By providing a robust framework for trade collaboration, it opens avenues for businesses, strengthens economic ties, and lays the groundwork for a sustainable and mutually beneficial partnership.
EU is Kenya’s second-largest trading partner
As Kenya looks forward to a future marked by enhanced economic cooperation with the EU, this agreement stands as a testament to the commitment to shared values and aspirations between the two regions.
Currently, the EU is Kenya’s second-largest trading partner with tea, coffee, cut-flowers, fruits and vegetables’ shipments accounting for just over 20 per cent of overall goods. The primary categories of imports from the EU into the region include machinery and mechanical appliances, equipment and parts, vehicles, and pharmaceutical products.
Data shows that in 2022, the bilateral trade between Kenya and the EU amounted to US$3.6 billion, marking a notable 27 per cent increase from the figures recorded in 2018.
The EPA is poised to unlock additional opportunities for Kenyan businesses and exporters. Upon the agreement’s entry into force, it will comprehensively open the EU market to Kenyan products, fostering increased access and trade. Additionally, the EPA is expected to encourage greater EU investment in Kenya by providing heightened legal certainty and stability.
“We are opening a new chapter in our very strong relationship and now our effort should be focused on implementation,” added von der Leyen.
EU said the agreement takes into consideration Kenya’s development needs by incorporating provisions for a more extended timeframe to gradually open its market. Notably, the agreement features a special safeguard tailored for key sectors such as agriculture, food security, and the infant manufacturing industry.
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Pact promises economic development and cooperation
Additionally, a dedicated chapter within the agreement focuses on economic and development cooperation, with a specific aim of bolstering the competitiveness of the Kenyan economy.
This collaborative effort, complemented by EU development assistance, is designed to build capacity and facilitate the smooth implementation of the EPA in Kenya. Furthermore, it aims to support local farmers in meeting EU standards and capitalizing on the opportunities presented by this comprehensive agreement.
“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,” explained von der Leyen.
Overall, EPA and its ambitious commitments stand as a significant achievement within the ongoing EU Trade Agenda. It specifically aligns to strengthen trade relations with Africa, serving as a key initiative to deepen and broaden existing trade agreements between the EU and nations across the continent.
Furthermore, the EPA is instrumental in advancing sustainability objectives, underscoring the EU’s commitment to fostering economic partnerships that prioritize environmental and social considerations.
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Where other EAC member countries stand on EPA
EAC member countries, including Burundi, Kenya, Rwanda, Tanzania, and Uganda, concluded talks for an EPA with the European Union on October 16, 2014.
Following this, the European Commission presented a proposal for the conclusion, signature, and provisional application of the comprehensive EPA with the EAC to the Council in February 2016.
While Kenya and Rwanda signed the EPA in September 2016 and Nairobi ratified it, the structured EPA deal required the signature and ratification of all EAC countries, posing a significant hurdle.
In response to Kenya’s request and aligned with the EAC Summit decision of February 2021, the EU and Kenya initiated engagements on February 17, 2022, to advance the bilateral implementation of the EU-EAC EPA. Notably, this included the addition of trade and sustainable development provisions.
This move aimed to address the challenges posed by the initial EPA deal structure, allowing for more flexibility in the implementation process. On June 19, 2023, the EU and Kenya jointly announced the political conclusion of their negotiations for the EPA.
The agreement is designed to execute the provisions outlined in the EAC EPA. Importantly, it remains open for other EAC countries to join in the future, fostering a collaborative approach to regional economic partnerships.
South Sudan, the Democratic Republic of the Congo, as well as Somalia, have since joined the EAC.
