Kenya and the European Union have successfully implemented a landmark trade agreement after a decade of negotiations, marking a significant milestone for both parties. This deal opens Kenya’s domestic market to tax-free goods from the EU’s 27-country bloc after 25 years. The EU-Kenya Economic Partnership Agreement (EPA) will preserve unrestricted access for Kenyan goods to the European market, excluding arms.
Kenya’s Cabinet Secretary for Investment, Trade, and Industry, Rebecca Miano, announced that the EPA is one of the most ambitious agreements between the EU and an African nation, aiming to promote economic sustainability. This agreement is anticipated to serve as a template for other African countries, especially those in Eastern Africa. It covers trade, economic, and development cooperation, and includes provisions on labor issues, gender equality, forestry, environmental protection, and climate change mitigation.
The agreement ensures that Kenya’s agricultural products, such as vegetables, cut flowers, fruits, tea, and coffee, will continue to enter the EU market duty- and quota-free. In return, Kenya has agreed to gradually reduce duties on European imports over 25 years, leading to the liberalization of trade. This includes the elimination of duties on machinery, mineral products, and chemical products from Europe, along with incentives for EU investments in Kenya.
A significant feature of the EPA is its protectionist clause, which prevents the EU from applying blanket subsidies to agricultural exports to Kenya without a deepened policy dialogue with Nairobi. This measure aims to protect Kenya’s agriculture and food security from unfair competition. Trade between the EU and Kenya currently favors the EU, which exported goods worth Sh223.12 billion to Kenya, while importing Sh150.08 billion worth of goods from Kenya.
The enforcement of the EU-Kenya EPA follows the approval by the European Parliament on February 29, with 366 lawmakers voting in favor, 86 against, and 56 abstaining. Kenyan lawmakers also approved the agreement, enabling its implementation. This document modifies the stalled EU-East African Community pact from October 2014, with significant updates including clauses on climate change.
Kenya’s move to engage bilaterally with the EU was prompted by the rejection of the EPA by other East African Community (EAC) countries. Rwanda signed but did not ratify, while Tanzania and Uganda refused approval. Unlike Kenya, which is a lower middle-income country, the other EAC countries benefit from the “everything but arms” trade arrangement under the WTO’s Special and Differential Treatment for least-developed countries. The EAC Heads of State Summit in 2021 permitted member countries to sign bilateral trade deals, allowing Kenya to finalize this groundbreaking agreement with the EU.
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