The EU-Kenya partnership agreement, which has been the subject of lengthy negotiations between both parties, may finally come into force in March 2024 with the Union’s president Ursula Von Dor Leyen expected to visit Nairobi on Monday.
Although details of the visit are still scanty, sources within the Presidency in Nairobi have told Sauce.co.ke that Dor Leyen and President William Ruto will put pen to paper on the EU-Kenyan Partnership Agreement.
The EU and Kenya concluded negotiations for an Economic Partnership Agreement (EPA) on 19 June 2023.
The agreement will boost trade in goods and create new economic opportunities, with targeted cooperation to enhance Kenya’s economic development. It is the most ambitious EU deal with an African country in terms of climate protection and labour rights.
Kenya is the ninth largest economy of the African continent and is East Africa’s main economic hub. Kenya’s economy achieved broad-based growth, averaging 4.8% per year between 2015-2019, significantly reducing poverty, from 36.5% in 2005 to 27.2% in 2019. The economy experienced a reasonably strong recovery after the Covid-19 pandemic, albeit the country’s economy is currently affected by high inflation. GDP growth remained robust at 4.8% in 2022.
The EU is Kenya’s second largest trading partner, and it most important export market. Total trade between the EU and Kenya reached €3.3 billion in 2022, with an increase of 27% compared to 2018. Trade between the EU and Kenya is balanced, as opposed to Kenya’s trade with other major partners, with a slight surplus in the EU’s favour of €768 million.
The EU’s imports from Kenya amount to €1.2 billion and are mainly vegetables, fruits, and flowers. EU’s exports to Kenya amount to €2.02 billion and are mainly in mineral and chemical products and in machinery.
The EU is Kenya’s first export destination, with 16% of its total exports in 2022, followed by Uganda (12%) and USA (8%). Kenya is mainly importing from China (20%) and India (11%); the EU is ranked in third place, with 10% of total Kenyan imports.
Kenya represents a major partner for the EU in Africa, in the economic and political context, and this agreement will bring our relationship to the next level. The country is one of the most stable democracies in the continent, with a growing political role in the region and internationally.
Kenya is one of the key EU partners in Sub-Saharan Africa to pursue an agenda of shared values and interests, promote peace and security, prosperity, and democratic stability in the region, as well as multilateralism.
The Economic Partnership Agreement (EPA) between the EU and Kenya was explicitly integrated as a key deliverable of the EU-Kenya Strategic dialogue, launched in June 2021, and it is a crucial component of our Africa engagement strategy. It represents a significant development, considering Kenya’s economic and political importance in the East African region.
The EU-Kenya EPA aims at implementing the provisions the EU-East African Community (EAC) EPA that was concluded in 2014 and will be open for other EAC countries to join. Bilateral implementation is based on a decision of the East African Community from 2021 to let individual go ahead under the principle of “variable geometry”.
The application of the regional agreement with the EAC is blocked since 2016, when Kenya, Rwanda and the EU Member States signed the agreement but not the other EAC partner states. The EU-Kenya Agreement will remain open to accession of the EAC Partner States.
The EU-Kenya EPA will boost bilateral trade in goods and investment flows and contribute to sustainable economic growth. It will also be accompanied by trade-related development cooperation to support economic growth and job creation.
The main objective of the EPA is to liberalise trade between the EU and Kenya. As in other EPAs, the EU-Kenya EPA foresees asymmetric removal of tariffs. In practical terms, this means that the EU fully liberalises access to its market immediately upon application of the EPA and all goods from Kenya (except arms) can enter the EU market without tariffs or quotas.
Kenya will open its market gradually to imports from the EU, benefitting from transitional periods. In addition, Kenya will be able to exclude sensitive products from liberalisation.
Finally, Kenya may also benefit from other provisions that consider its development needs such as, special safeguards for agriculture, measures on food security and infant industry protection.
