TRADE

Kenyan exports start accessing EU market duty-free

This is after the Economic Partnership Agreement entered into force on July 1.

In Summary

•With the EPA, Kenya will now be granted duty-free, quota-free access to the EU market for all its exports, including coffee, flowers and minerals.

•Kenya is East Africa's main economic hub - and EU-Kenya trade relations have substantial growth potential.

Trade and Industrialisation Cabinet Secretary Rebecca Miano
Trade and Industrialisation Cabinet Secretary Rebecca Miano
Image: FILE

Kenyas exports will now enter the 27-member European Union market duty free after the EU-Kenya Economic Partnership Agreement (EPA) entered into force, on July 1, 2024.

The move has now granted Kenyan exports a market reach of 500 million and in return Kenya will have to open its markets to EU products gradually over a 25-year period.  

In a statement on Monday, Investments, Trade and Industry Cabinet Secretary Rebecca Miano confirmed that the EPA is now in force.

With the EPA, Kenya will now be granted duty-free, quota-free access to the EU market for all its exports, including coffee, flowers and minerals.

“The agreement will boost bilateral trade in goods, increase investment flows, strengthen the ties between reliable partners, and facilitate mutually advantageous economic relations sustainably, stimulating job creation and economic growth,” said Miano.

According to the CS, the EU-Kenya EPA is the most ambitious deal negotiated with an African country in terms of sustainability and can serves as a template for other sustainable trade agreements.

These commitments include binding provisions on labour issues, gender equality, environment and the fight against climate change.

Kenya is East Africa's main economic hub and EU-Kenya trade relations have substantial growth potential.

The agreement will unlock new economic opportunities, as the EU is Kenya's first export destination and second-largest trading partner.

Total trade between the EU and Kenya reached €3 billion (Sh415.8 billion) in 2023 - an increase of 16 per cent compared to 2018.

According to the Economic Survey 2024 by the Kenya National Bureau of Statistics, the total value of exports to the European Union registered an improvement of 12.7 per cent in 2023, rising from Sh133.2 billion in 2022.

The rise was partly contributed by the increase in domestic exports of cut flowers and avocados to the Netherlands and beans to France.  

Similarly, foreign export earnings from the United Kingdom rose from Sh44.6 billion in 2022, to Sh54.7 billion in 2023, largely driven by an increase in domestic exports of tea and cut flowers.  

More than 70 per cent of the country’s flower production heads to the European bloc.

The EPA will also create more opportunities for Kenyan businesses and exporters, as it will fully open the EU market for Kenyan products and incentivise EU investment in Kenya, thanks to increased legal certainty and stability.

In the period, Kenya also imported products worth €2billion (Sh306billion) with two-way trade growing by about a quarter since 2019.

Following the coming to effect of the EPA, Kenyan businesses and exporters, will now have to comply with the agreed standards for the European market, which is expected to attract EU investment to Kenya.

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.

The Economic Partnership Agreement between the EU and Kenya was concluded in June 2023 and signed by both parties on December 18.

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

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