Kenya to reduce duty for EU imports after inking trade pact

Kenya will progressively reduce duty for goods imported from the European Union (EU)  as part of the newly concluded Economic Partnership Agreement (EPA) between the two markets.

President William Ruto made the announcement yesterday after the conclusion of the trade deal discussions, which will also see Kenyan goods access the EU market duty and quota-free.

The long-awaited deal was necessitated after the rest of the East African Community(EAC) partner countries failed to either ratify or sign an earlier agreement negotiated at a regional level.

Kenya is the only nation that signed and ratified the deal.

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President Ruto, announcing the deal on Monday, said while the EU is already Kenya’s largest export destination at 21.1 per cent of total global exports, this agreement will expand the market further and provide stability.

“It assures a stable market for industrialists, mostly in the EU, that deal in machinery and mechanical appliances, pharmaceutical products, chemicals, electrical, machinery beverages and other processed products,” he said.

President Ruto noted that the deal will stimulate investment and manufacturing in the country. He marinated that Kenya is prepared to strengthen its manufacturing sector in order to enhance its exports to the EU and globally.

“We are finally ready to take our place as a global player in export-led manufacturing and services,” he said.

As a way of reciprocating the duty and quota-free Kenya’s exports to the EU, President Ruto said products from the EU will also progressively receive duty reductions over a period of 25 years.

“I encourage European companies that import goods from Kenya to invest in value addition here and export finished, value-added products out of Kenya,” he said.

President Ruto has been aggressively pushing for the conclusion of the EPA since he took office last year.

The discussion on the interim EPA was being carried out by a joint task force appointed in June 2021.

The decision to negotiate for an interim EPA was communicated on February 2022 through a joint statement signed by then Foreign Affairs CS Raychelle Omamo and EU Executive Vice President Valdis Dombrovskis.

The statement indicated that the interim agreement will remain open to EAC Partner States.

“To this end, EU and Kenya agree to negotiate, as an integral part of their EPA binding provisions on trade and sustainable – building on African, Caribbean and Pacific (ACP)-EU partnership acquis – which will be subject to an appropriate dispute settlement mechanism,” read the statement in part.

This agreement is expected to be implemented starting in 2024. The next chapter, with the negotiations, concluded, is for the chief negotiators to finalise the text and proceed to initiate procedures for ratification and eventual implementation.

Kenya will be the second country in the continent – after Ghana in 2016 – to have such an agreement in the continent.

“I call upon them to move with speed so that this Agreement can be implemented next year,” said President Ruto.

Kenya’s exports to the EU are mainly agricultural products including tea, coffee, cut flowers, peas and beans.

Over 70 per cent of Kenya’s total flower production is exported to the EU, creating 500,000 direct and indirect jobs for Kenyans, according to official data.

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