It’s either now or Kenya looses its market share in the EU

The deadline to sign the EAC EU Economic Partnership agreement is October first 2014. If this stumbles Kenya faces grave risks of loosing its market share to other flower producing countries like Ethiopia, Ecuador, Columbia among others. This also applies to other products like fruits, vegetables, fish and others.

The flower industry is therefore urging the government to conclude the negotiations with the EU so that flower trade is not disrupted. Already there is anxiety being created by the non- conclusion of the trade talks.  If a deal is not reached, then Kenyan exports to the EU will attract import duty varying between 5-20%. This will have adverse impact on Kenya’s competitiveness forcing the growers to change their current business model so that they can absorb the new taxes.

Acknowledging the importance of the EAC EU EPA negotiations for Kenya’s exports to the European Union, His Excellency President Uhuru Kenyatta committed to take charge of the negotiations for timely conclusion during the recently held Presidential Round Table.

This comes after a meeting for the joint EAC – EU Ministerial meeting was held from 27th to 31st January, 2014 in Brussels, Belgium failed to conclude  just about 1-2% outstanding issues. The Ministers, preceded by technical teams and senior officials, will meet again in March in East Africa.

Kenya will not be able to compete on price and market share will be lost if the agreement is not signed by October 2014 subsequently leading to loss of investments and jobs. Meanwhile countries like Colombia, Tanzania, Uganda, Rwanda, Burundi and Ethiopia will continue to enjoy their duty free status with the EU come October 1, 2014.

Background

The East African Community – bringing together the Republics of Burundi, Kenya, Rwanda, the United Republic of Tanzania, and the Republic of Uganda – is one of the seven regional groupings that have been involved in the negotiations for the Economic Partnership Agreements with the EU. The EPA negotiations are based on the Cotonou Agreement signed in 2000 between the EU and African, Caribbean and Pacific (ACP) countries and aim to put in place a long-term economic partnership centred on the development of the EU’s partner countries. This includes duty free, quota free access to EU market, along with other provisions (e.g. on health and hygiene standards, and other trade-related rules) tailored to the needs of the ACP countries.

In 2007 EAC countries and the EU closed negotiations on an interim (framework) EPA covering mainly trade in goods which EAC declined to sign. The agreement currently being negotiated is a regional EPA aiming to establish a stable and sustainable economic partnership based on reciprocal but asymmetrical trade liberalization that takes account of the development needs of the EU’s EAC partners.

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