Kenya has made significant progress towards finalising a preferential trade agreement with the European Union (EU), ensuring continued tax-free access for exports to 27 countries while gradually opening up its market to European imports and investments.
The National Assembly's adoption of a report from the Departmental Committee on Trade, Industry, and Cooperatives on Wednesday, April 24, marks a crucial step in the process.
Once ratified, the agreement will secure duty- and quota-free access for Kenya's exports to the EU, while Kenya will gradually reduce tariffs on European imports over a 25-year period.
The European Parliament's endorsement in March 2024 paved the way for final approval from heads of state and government, signalling the EU's commitment to the deal.
Kenyan lawmakers must now debate and approve the agreement for it to take effect.
The EU hailed the agreement as a milestone, highlighting its inclusion of binding provisions on labour standards, gender equality, climate, and the environment.
366 EU lawmakers voted in favour of the EU-Kenya Economic Partnership Agreement (EPA), with 86 members opposing it and 56 abstaining.
Under the deal, Kenya's exports to the EU, primarily consisting of vegetables, fruits, and flowers, will maintain duty-free access.
In return, Kenya will gradually lower duties on imports from Europe, incentivizing investments from the EU.
However, the agreement includes a protectionist clause preventing the EU from subsidising agricultural exports to Kenya without prior dialogue, safeguarding Kenya's agriculture and food security.
The agreement builds on the stalled EU-East African Community pact, with modifications including clauses addressing climate change.
The EU is Kenya's largest export destination, receiving 16% of its total exports in 2022, while China and India are key import partners.
The EU-Kenya EPA aims to strengthen bilateral trade and investment flows, contributing to sustainable economic growth and job creation.
The deal offers opportunities for Kenyan farmers, particularly in horticulture, with safeguards in place to protect sensitive agricultural products and ensure food security.
Kenya has committed to gradually liberalise imports from the EU over 15 to 25 years, excluding certain products from tariff cuts.
This gradual liberalisation aims to manage imports effectively without significant budget revenue shocks or market flooding.
Overall, the EU-Kenya EPA represents a significant step forward in trade relations, promising mutual benefits for both parties while addressing key developmental and environmental concerns.
