EU MPs Endorse Kenya’s Trade Deal; Other EAC Countries to Wait Longer

The European Union Parliament on Thursday, February 29, passed Kenya’s  Economic Partnership Agreement (EPA) with EU member countries. 

The development is a major win for Kenyan farmers whose exports will enjoy a tax-free access to European markets, once the agreement is officially ratified by the respective heads of state. 

At the same time, Kenya will work towards allowing duty-free imports of goods and investments coming from EU member countries. 

The EU is Kenya’s second-largest trading partner. Kenya exports goods worth €1.2 billion (Ksh190 billion) - mainly flowers, fruits, and vegetables. Kenya imports goods worth €2.02 billion (Ksh320 billion) - mainly machinery and chemical products. 

“The agreement includes binding and enforceable provisions on international standards and agreements on labour, gender equality, climate and the environment, and prevents both parties from lowering labour and environmental standards.

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The trade and sustainable development clauses, which are new compared to the EU-East African Community EPA, will be binding: possible issues will be addressed through a dedicated dispute resolution mechanism,” a statement from the EU Parliament read in part. 

The EPA was initially supposed to be enacted between the EU and the East African Community (EAC) of which Kenya is a member. 

The agreement was negotiated for 14 years but fell apart in 2016 when Tanzania declined to sign it, claiming the agreement was skewed in favour of the EU countries. 

The Tanzanian delegation felt that it was unfair for the EU countries to be exporting manufactured goods while the EAC countries were only selling raw goods - mainly agricultural products. 

“ In contrast, 91 per cent of its current trade with the EU is made up of primary commodity exports (agricultural products such as coffee, tea, spices, fruit and vegetables, fish, tobacco, hides and skins). Only a minuscule 6 per cent or about $200,000 of EAC exports to the EU is composed of manufactured goods.

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In contrast, of the total EAC exports to Africa, almost 50 per cent is made up of manufactured exports – about $2.5 billion,” former Tanzanian President Benjamin Mkapa observed. 

Uganda and South Sudan later followed suit in rejecting the trade deal with the EU. Rwanda had signed the agreement but did not ratify it for unclear reasons.

A number of non-state actors in the EAC have asked the East African Court of Justice to bar Kenya from ratifying the EU deal, arguing it would affect the already existing common market agreements in the region.