The EU-Kenya Economic Partnership Agreement (EPA) has moved closer to ratification after the Commission sent the proposals to the Council for its signature and conclusion amid concerns from the regional business lobby group.

Once the Council gives its agreement, the EU will be able to sign the EPA with Kenya, which would then be sent to the European Parliament for consent with the approval to bring the deal into force.

The EU-Kenya EPA is touted to boost trade in goods and create new economic opportunities, with targeted cooperation to enhance Kenya’s development.

“It is the most ambitious EU agreement with an African country thus far as regards climate protection and labour rights,” said the EU.

However, the East African Business Council says Kenya’s move to lower tariffs on EU goods will complicate the tax regime in EAC.

Kenya's Trade Cabinet Secretary and EU Trade Representative during the signing of EPA Agreement in June. Image: courtesy.
Kenya’s Trade Cabinet Secretary and EU Trade Representative during the signing of EPA Agreement in June. Image: courtesy.

The council says there is a likelihood of a distorted tax regime on imported goods once the deal enters into force.

The deal guarantees duty-free and quota-free access for goods originating in Kenya to the 27-member bloc, Kenya’s most important export market and second-biggest trading partner.

Last year, Kenya exported goods worth $1.31 billion to Europe, mainly agricultural produce that comprised tea, coffee, cut flowers, and vegetables.

Kenya and the EU concluded political negotiations on the deal in June this year in an official ceremony in Nairobi by European Commission Executive Vice-President and Commissioner for Trade Valdis Dombrovskis and Cabinet Secretary of Trade Moses Kuria.

The agreement foresees immediate full liberalisation of the EU market for Kenyan products and will incentivise EU investment in Kenya.

The EPA contains strong trade and sustainability commitments, including binding provisions on labour matters, gender equality, the environment, and the fight against climate change, and a dedicated chapter on economic and development cooperation to enhance the competitiveness of the Kenyan economy.

The deal will be supported by the implementation of the Global Gateway Africa-Europe Investment Package announced at the 6th EU-African Union Summit in February 2022.

It will facilitate trade and investment, accompanied by trade-related development cooperation, with a view to further deepening the economic ties between the EU and Kenya, boosting sustainable economic growth, and creating jobs.

The EPA will also directly contribute to the objectives of the UN 2030 Agenda for Sustainable Development, and to the African Union Agenda 2063. It will also support the green and digital transitions of both partners.