EPA Boosts Kenya-EU Trade: Duty-Free Access and Economic Growth
Kenyans seeking to expand their trade in the European market have reason to celebrate following the recent entry into force of the Economic Partnership Agreement (EPA) between Kenya and the European Union.
The agreement now opens duty-free and quota-free access for all Kenyan exports to the USD 18 trillion EU market.
This development is expected to boost bilateral trade in goods, increase investment flows, strengthen ties between reliable partners, and facilitate mutually advantageous economic relations in a sustainable manner, including stimulating job creation and economic growth.
“The EU-Kenya EPA is one of the most ambitious agreements negotiated between the European Union and an African country in terms of promoting economic sustainability. It can serve as a template for other African countries, particularly those in Eastern Africa, to adapt. The agreement includes trade, economic and development cooperation, and a chapter on trade and sustainable development, which covers provisions on labor issues, gender equality, forestry and environment, and the fight against climate change,” said Investments, Trade, and Industry Cabinet Secretary Rebecca Miano.
Kenya is Eastern Africa’s leading economic hub, and the EU-Kenya trade relations hold substantial potential for furthering growth.
The agreement will unlock new economic opportunities, as the EU is one of Kenya’s topmost export destinations and second-largest trading partner.
Total trade between the EU and Kenya reached over €3.5 billion in 2023, an increase of 16% compared to 2018.
The EPA will also create more opportunities for Kenyan businesses and exporters, including high-value manufactured products, as it will fully open the EU market for Kenyan products and incentivize EU investment in Kenya, thanks to increased legal certainty and stability.
The main objective of the EPA is to liberalize trade between the EU and Kenya.
The EU’s imports from Kenya amount to $1.3 billion and are mainly vegetables, fruits, and flowers. EU’s exports to Kenya amount to $2.18 billion and are mainly in mineral and chemical products and machinery.
As in other EPAs, the EU-Kenya deal involves an asymmetrical removal of tariffs. In practical terms, the EU fully liberalizes access to its market upon application of the EPA, and all goods from Kenya (except arms) can enter its market without tariffs or quotas.
Once in force, Kenya will gradually open up its market to imports from the EU, benefiting from transition periods. It will exclude sensitive products from liberalization.
Kenya may also benefit from other provisions that consider its development needs, such as special safeguards for agriculture, measures on food security, and infant industry protection.
The deal has a comprehensive chapter on trade and sustainable development (TSD) reflecting a high level of ambition. It incorporates most of the outcomes of the EU’s TSD review.
The agreement includes strong and binding provisions on labor standards, climate change and biodiversity, and gender equality. It further prevents both parties from lowering labor and environmental standards to attract trade or investment
