EPA UPDATES- Good news for Kenya Floriculture

Union Fleurs  and  the Kenya Flower Council welcomes the EU’s timely efforts to fast-track Kenya’s reinstatement on duty-free status for its exports to the EU market – on time for Valentine’s Day 2015, the flower industry’s peak sale season.

This week, the European Parliament and the Council have both confirmed that they do not object to the proposed European Commission Delegated Regulation issued on 14 November 2014 that re-inserts Kenya on the list of beneficiary countries in Annex I to Council Regulation (EC) No 1528/2007 – the so-called ‘EU Market Access Regulation’ (MAR). In so doing Kenya is now expected to be reinstated by end of the year to duty – free status for all flowers and floriculture products imported to the EU. This comes as a huge relief for Kenya’s floriculture sector and for all operators and businesses involved in the floriculture trade both in Kenya and in the EU particularly in view of the approaching peak sale season on Valentine’s Day.

Kenya is the major provider of quality cut flowers to the EU market, with a total export value of 350 million EUR and a market share of about 40%. The floricultural industry has significantly contributed to economic, social and environmental development in Kenya and created job opportunities for close to 90,000 Kenyans employed directly and a further 1.5 million people employed in the ancillary service sectors.

Since 1 October 2014, flower exports from Kenya to the EU market have started attracting import duties between 5% and 8.5% under the EU GSP regime due to the delay in finalising an Economic Partnership Agreement (EPA) between the EU and the East African Community (EAC) member states. The additional cost associated with the duties has had to be absorbed by the floriculture sector in order to remain competitive in European markets and to safeguard jobs and the enormous capital investment in the industry.

 

Following the successful finalization and initialing of the EPA between the EU and EAC member states on 16 October 2014, all operators involved in the floriculture trade with Kenya have been anxiously awaiting the announcement of the reinstatement of a duty-free regime for all flower exports from Kenya to the EU market. The sector welcomed the Commission’s proposed Delegated Regulation re-inserting Kenya on the list of beneficiary countries in Annex I to Council Regulation (EC) No 1528/2007, made on 14 November 2014 – the so-called ‘EU Market Access Regulation’ (MAR).

The process of reinstatement was further accelerated through recognition by both the European Parliament and the Council of the crucial importance of the approaching Valentine’s Day peak flower sale season on the EU market that is central to the financial sustainability of the flower industry in Kenya. As a result the standard 2 month review period was successfully reduced to one month only.

The members of both Union Fleurs and the Kenya Flower Council therefore wish to express their most sincere thanks and gratitude to the Kenya Government, Ministry of Foreign Affairs and International Trade and their counterparts in the EAC partner countries for their tireless efforts to bring the EPA negotiations to a successful conclusion and to all the EU decision-makers in the Commission, European Parliament and Council for completing the essential institutional processes in the most time-efficient manner thereby facilitating the early reinstatement of Kenya to a duty-free status by the end of the year.

 

What now remains to be done is the formal publication in the EU Official Journal of the Commission Delegated Regulation that will effectively advise customs in the EU and operators that the duty free status of Kenya flower and floriculture imports to the EU has been reinstated. We expect this final formal step to be completed before 31 December 2014, meaning that Kenya can start the New Year with a renewed duty-free access to the EU market.

All parties are aware that there remain some essential steps to be taken by both the EU and the EAC member states to sign and ratify the EPA within the next two years to ensure that Kenya can confidently plan its long term trading relationship with the EU and expand the investment in the Kenyan floriculture sector. It is certainly our sincere hope that the spirit of cooperation within and between the EU and Kenya and its EAC partner countries that has resulted in a timely and successful conclusion of the MAR process will be maintained to achieve finalization of the EPA ratification process in a timely manner, and before 2016.

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