Kenya and the European Union have concluded negotiations paving way for the signing of an agreement for duty free exports into the 27-member union.
The move once operational will grant Kenyan exports a market reach of 500 million.
In return Kenya will have to open its markets to EU products gradually over a 25-year period.
The conclusion of the deal comes at a time that exports to Europe have been on an increase.
According to the Economic Survey 2023, EU was Kenya's second largest export market in 2022 accounting for Sh133.2 billion in revenues, a 15 percent increase from Sh115.8 billion in 2021.
More than 70 per cent of the country’s flower production heads to the European bloc.
In the period Kenya also imported products worth €2bn, (Sh306billion) with two-way trade growing by about a quarter since 2019.
With the Economic Partnership Agreement (EPA), Kenya will be granted duty-free, quota-free access to the EU market for all its exports, including coffee, flowers and minerals.
President William Ruto said that the temporary EU-Kenya deal is expected to liberalise trade in goods on a mutual basis, giving Kenya duty-free access to the EU market for all exports and partial and gradual opening of the Kenyan market.
“And in recognition of our varied stage of progress along the development journey, products from the European Union will progressively receive duty reductions over a period of 25 years,” said Ruto
Once the EPA becomes operational, Kenyan businesses and exporters, will have to comply with the agreed standards for the European market, which is is expected to attract EU investment to Kenya thanks to increased legal certainty and stability.
Currently Kenyan exports to the EU mainly cover coffee, cut flowers, tea and vegetables.
Imports from the EU broadly cover machinery and mechanical appliances, equipment and parts, vehicles and pharmaceutical products.
“This is a balanced agreement, taking into account Kenya's development needs by allowing it a longer period to gradually open its market, safeguards for agriculture, and protection of its developing industry,” said EU Executive Vice-President and Commissioner for Trade Valdis Dombrovskis.
With the signing, the EPA will now go through legal revision (“legal scrubbing”) and then be translated before the commission submits it for signature and conclusion to the Council.
Once adopted by the Council, the EU and Kenya can sign the agreement.
Following the signature, the text will be transmitted to the European Parliament for consent.
The parties may then decide to provisionally apply parts of the agreement, the agreement enters fully into force once Kenya and the EU member states also ratify it.
The is aimed at implementing the provisions the EU-East African Community (EAC) EPA, and it will be open for other EAC countries to join in the future.
The deal is one of the most ambitious EU trade deal with a developing country when it comes to sustainability provisions such as climate and environmental protection and labour rights.
