Kenya has signed a historic trade deal with the European Union (EU) that will grant its exports duty-free and quota-free access to the bloc, officials announced on Monday.
The Economic Partnership Agreement (EPA) was initiated by both sides in June after seven months of negotiations. The EU is one of Kenya’s biggest export markets, accounting for 21% of its overall exports.
According to a report by CNBC Africa, the deal was approved by the European Union Council last week and will now be presented to the parliaments of both sides for ratification before it comes into force.
“Today’s agreement heralds a new dawn where Kenyan goods gain immediate duty- and quota-free access to the European market,” Rebecca Miano, Kenya’s trade minister, said before signing the agreement at a ceremony in Nairobi.
Kenya is a major exporter of tea, coffee, flowers, fruits, and vegetables to the EU. It buys machinery, pharmaceuticals, and other chemicals from the EU.
Bilateral trade between the two stood at a total of 3.3 billion euros in 2022, EU and Kenya government data showed, making it the East African nation’s second-largest trade partner.
A Win-Win Situation
The EPA is expected to boost trade and investment between Kenya and the EU, as well as enhance cooperation on development, human rights, and environmental issues.
The agreement also provides for a framework to address trade barriers, such as sanitary and phytosanitary measures, technical standards, customs procedures and rules of origin.
“The EPA is a win-win situation for both Kenya and the EU. It will create a stable and predictable trade regime that will foster sustainable development, economic diversification, and regional integration,” EU Commission President Ursula von der Leyen said.
“This agreement that we are signing today leaves the door open, and I say, wide open, for our EAC partners to join,” he said.
The EAC is a regional bloc of eight countries, including Kenya, Tanzania, Uganda, Rwanda, Burundi, South Sudan, Somalia and Ethiopia.
Kenya signed an initial trade deal with the EU in 2016, alongside its partners in the then six-member EAC, but it was not signed by most of the EAC countries and therefore did not fully come into effect.
While the other EAC members are classified as least-developed countries, meaning their exports could continue to get access without the deal, Kenya is a middle-income country and therefore had to seek a stand-alone arrangement.
A New Era of Partnership
The EPA marks a new era of partnership between Kenya and the EU, based on mutual respect, shared values, and common interests.
The deal will also contribute to the implementation of the African Continental Free Trade Area (AfCFTA), which aims to create a single market for goods and services across the continent.
The AfCFTA, which came into effect in January 2021, is the world’s largest free trade area by number of countries, covering 1.3 billion people and a combined GDP of $3.4 trillion.
The EPA will help Kenya to diversify its exports, increase its value addition and enhance its regional and global competitiveness.
It will also support the country’s vision of becoming a green, inclusive and resilient economy by 2030.
The deal is a testament to the strong and long-standing friendship between Kenya and the EU, which dates back to the 1960s.
The two sides have cooperated in various fields, such as peace and security, democracy and governance, health and education, agriculture and energy, and climate change and biodiversity.
The EPA is expected to take the relationship to the next level, as Kenya and the EU work together to tackle the common challenges and seize the opportunities of the 21st century.
