Kenya ratifies EPA to continue key flower exports to EU

posted in: Africa, Afrique

Kenya has ratified an international trade agreement with the European Union (EU) despite the opposition to the deal by some East African states, paving the way for continued trade with Brussels, the country’s foreign minister said Wednesday.

“Kenya’s Mission to the EU in Brussels deposited with the EU the instruments of ratification of the East African Community-EU Economic Partnership Agreement (EAC-EU EPA) at the agreements section of the EU Council,” foreign affairs Cabinet Secretary Amina Mohamed said in a statement.

The EAC-EU EPA was ratified by the Parliament of Kenya on 20 September 2016. This enables Kenya to continue exporting flowers and other horticultural crops, which earn the country US$600 million every year.

The handing over ceremony was witnessed by Alda Silveira Reis, Director-General of Trade, Development and Foreign Affairs at the European Council and top EU officials.

Kenyan officials said the ratification of the agreement allows Kenya to continue exports to the EU market on a duty-free basis.

The trade agreement ratified by the Kenyan government allows Nairobi to access the EU under Regulation No 1528/2007 which governs the EU preferential market access regime for African, Caribbean and Pacific countries.

The preferential market access enjoyed by African countries was challenged by other countries in the South American region, which argued the duty-free and quota-free access to the European market was discriminatory to other states.

Also, the World Trade Organization (WTO) held the trade arrangement with middle-income and other developing countries in Africa as not in agreement with its rules of liberalizing trade and ensuring level playing field for all states globally.

EPA negotiations sought to correct mistakes by making the EPA deal compliant, partly, allowing the EU to also access markets in the African countries duty-free.

Opponents of the EPA argued that benefits of trading with an advanced economy like the EU, would mean poor countries lose taxes they could be charging on imports of machinery while receiving zero benefits for their exports.

“The negotiations of the EAC-EU EPA were concluded by both sides and the text initialed on 14 October 2014. The agreement covers trade in goods and development cooperation. It also contains extensive chapters on agriculture, fisheries and economic and development cooperation,” Mohamed said.

The agreement provides duty- and quota-free access for Kenyan and EAC products to the EU market. It also creates new regional opportunities through more flexible rules of origin.

Under the new deal, the EU will not apply export subsidies on products destined for the EAC market. The export subsidies have been blamed for flooding markets in poor countries with cheaper products, reducing the ability of poor nations to become reliant on local industries to produce goods for local consumers.

Kenyan officials revealed that through the agreement, the EAC has committed to liberalize the equivalent of 82.6% of imports from the EU by value.

The remainder would be progressively liberalized within 15 years from the moment the EPA enters into force.

“The Agreement has inbuilt safeguards on various sensitive products. For instance, the Agreement excludes from liberalization various agricultural products — dairy products, fruits and vegetables, fish, wines and spirits, chemicals, plastics, wood-based paper, textiles and clothing, footwear, ceramic products, glassware, articles of base metal and vehicles.

“The Agreement sets up an EPA Council that will address implementation issues. It will be reviewed every five years taking into account the experience acquired in its implementation,” the statement explained.

Source PANA