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Kenya and the European Union have finalized a free-trade agreement. The agreement comes as trade between the EU and Kenya is growing, increasing by 27% from 2018 to 2022. Once ratified, the EU-Kenya Economic Partnership Agreement (EPA) will fully open the EU market for Kenyan products, except arms.
Kenya and the European Union have finalized a free-trade agreement. The agreement comes as trade between the EU and Kenya is growing, increasing by 27% from 2018 to 2022. Once ratified, the EU-Kenya Economic Partnership Agreement (EPA) will fully open the EU market for Kenyan products, except arms.
The deal guarantees duty-free and quota-free access for goods originating in Kenya to the 27-member bloc, Kenya’s most important export market and second-biggest trading partner.In 2022, Kenya exported €1.2 billion of mainly agricultural products to the EU, including tea, coffee, cut flowers, peas, and beans. More than two-thirds, or 70%, of Kenya’s total flower production is sold in the European market.As for Kenya, East Africa’s largest economy will gradually and partially open its market to European goods, with the agreement seeing tariffs reduced over a 25-year period. Currently, Kenya mainly imports machinery as well as mineral and chemical products from the EU.
Kenya will be able to protect some sensitive products, either by excluding them from tariff cuts or by triggering safeguards in case of a sudden increase in imports from the EU. This will put more money in the pockets of Kenyan traders. It anchors Kenya as a natural hub for EU products to East African states, stated Kenyan President William Ruto
The EPA is the first broad trade deal between the EU and an African nation since the EU signed a similar agreement with Ghana in 2016.For Kenya’s exports to the EU, the deal, however, won’t change much in the short term. Kenya already enjoys duty- and quota-free trade with the EU under a temporary special arrangement, which was put in place in 2014 after an agreement that the EU negotiated with the East Africa Community (EAC) stalled.
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The East African nation is also negotiating a trade deal with the United States, which could be signed next year. Kenya qualifies for duty-free access to the US market until 2025 under the African Growth and Opportunity Act. However, as with the EU, having a formal and permanent deal will likely attract more investment. Kenya is also in talks with the United Arab Emirates, with the two nations signing in July 2022 an intent to begin negotiations on a comprehensive economic partnership agreement.
