The Kenya Flower Council (KFC) held a consultative workshop on December 17, 2013 at Fish Eagle Naivasha to discuss the draft code of good practices for breeders and propagators developed under the National Mechanism for industry-wide Compliance (NMC) project. In attendance were Lex+, NIRP International, Deruiter East Africa, WAC International and Olij Kenya Breeding.
NMC is spearheaded by Kenya Flower Council to support the Kenya Flower Industry in assuring sustained access to international markets, by developing and implementing a national system for industry-wide compliance with the existing regulatory framework for sustainable production. Reason being, despite a myriad of both public and private tools governing the regulation of the cut flower industry in the realm of labour standards, protection and stewardship of natural resources, it is clear from consistent reports and concerns raised by various stakeholders, that more work on the robustness of implementation needs to be done.
In this regard, KFC has initiated a revision of the Kenya Standard 1758 published in 2004 as good practices in the production of horticultural produce. In addition, the scope has been expanded to include the breeders and propagators; consolidators; shippers and cargo handlers code for best practices.
EAC EU EPA progress
The Government needs to speed up the process on the EAC EU EPA negotiations since there are grave risks that are facing the flower industry and Kenya at large if the agreement is not signed by October 2014. Currently Kenya enjoys quota free and duty free export of flowers to EU and without the EPA, GSP tariffs will be applied. As a result, Kenya will not be able to compete on price and market share will be lost. Countries like Colombia, Tanzania, Uganda, Rwanda, Burundi and Ethiopia will continue to enjoy their duty free status, after October 1, 2014. EU is Kenya’s single largest trading block representing 22% of all exports and 82% of flower exports.
Comparison of the applicable tariffs
On the other hand, the plenary of the European Parliament has rejected a motion for a resolution objecting the Commission Regulation proposal to grant GSP+ preferences as of 1 January 2014 to Ecuador and 9 other countries (Bolivia, Costa Rica, Paraguay, Armenia, Georgia, Mongolia, Cabo Verde, Pakistan and Peru). This was the last hurdle to overcome in the EU decision-making process before the free market access for Ecuadorian flowers could be confirmed for 2014.
This paves the way for GSP+ preferences to be fully confirmed for Ecuador and the other 9 countries as of 1 January 2014. Imports of flowers and all Chapter 06 floricultural products from Ecuador into the EU will therefore continue enjoying 0% duty for the year 2014. However, this will only become official when the Commission Regulation will be published in the EU Official Journal which will happen after January 1, 2014. Full tariff duties might be temporarily levied by some EU Member States on Ecuador flowers customs-cleared between 01/01/2014 and the date of publication. These duties will be later reimbursed to EU importers.
Even if GSP+ preferences are confirmed for Ecuador as of 1 January 2014, Ecuador will lose all EU GSP / GSP+ preferences on 1 January 2015 and all imports from Ecuador into the EU will be charged with full Most Favoured Nation (MFN) tariffs from that date on – unless a Free Trade Agreement (FTA) between the EU and Ecuador is in place by then.