All eyes on Kenya, EAC after European parliament backs free trade pact
All eyes on Kenya, EAC after European parliament backs free trade pact
The Standard | 2nd March 2024
By Brian Ngugi
Lawmakers at the European Parliament this week voted overwhelmingly to ratify a new bilateral deal that will boost trade between Kenya and the EU bloc.
The deal’s controversial negotiations have been years in the making and the landmark nod now paves the way for its implementation.
The agreement will now enter into force after the Kenyan parliament also gives its consent.
In signing the deal earlier this year, Kenya risked the wrath of her East African neighbours who have been dithering to sign it.
Kenya and the European Union (EU) bloc earlier this year finally signed the bilateral deal that will boost trade between the two regions.
The Kenya deal is the culmination of trade talks between the EU and the East African Community (EAC) that started over a decade ago.
The deal was signed at State House in Nairobi earlier this year during a ceremony led by President Ruto and European Union Commission President Ursula von der Leyen.
Once ratified and entered into force, Kenya will receive duty-free and quota-free access to the EU, its biggest market where it sends roughly one-fifth of all its exports.
The EU is Kenya’s second-largest trading partner, with total trade in 2022 at €3.3 billion (Sh545 billion), an increase of 27 per cent compared to 2018.
Imports from the EU to Kenya such as chemicals and machinery will receive progressive tariff reductions over a period of 25 years, but some sensitive products will be excluded.
Kenya’s main exports to the EU are agricultural products, including vegetables, fruits as well as tea and coffee.
More than 70 per cent of Kenya’s cut flowers are sold in Europe.
"This agreement that we are signing today leaves the door open, and I say, wide open, for our EAC partners to join," Ruto said at the signing ceremony, alluding to the concerns by Kenya’s neighbours who have given the deal a wide berth.
"We encourage the other Eastern African countries to join," added EU Commission President Ursula von der Leyen.
In 2014, negotiations for an economic partnership agreement were concluded between the EU and the EAC, consisting of Kenya, Rwanda, Uganda, Burundi, and Tanzania. However, only Nairobi proceeded to ratify the agreement.
There have been jitters about the implementation of the pact on some of its controversial clauses.
The pact for instance elicited controversy with critics arguing it does not provide reciprocal free entry for Kenyan labour.
"The EU demands 80 per cent removal of tariffs on its goods over the period, risking a major ending of local manufacturing, and consequential local unemployment; the EU was not making real cuts to their own subsidised producers, thus competing unfairly against our unsubsidised food-based industries and affecting our long-term food security," wrote senior counsel Pheroze Nowrojee in a recent commentary.
"These are not calls for abandonment of the process. These are calls for these specific dangers and future possible failures to be addressed, and safeguards put into place."
The EU, however, said earlier the agreement includes binding provisions on trade and sustainable development, such as climate and environmental protection and labour rights, and a transparent dispute resolution mechanism.
The new deal comes as President Ruto seeks new global allies in trade and investments through a spirited diplomatic charm offensive that has taken him around the Middle East, Africa, Europe, Asia and the US.
It also comes as the EU seeks to undercut the rise of economic influence by rivals such as China in Kenya, which is the region’s gateway.
