Kenya has finalized a free trade agreement with the European Union (EU) as the East African nation seeks new economic opportunities beyond Africa. The EU-Kenya Economic Partnership Agreement (EPA) will allow Kenyan products to have duty-free and quota-free access to the EU market, except arms. The EU is Kenya’s most important export market and second-biggest trading partner. The deal guarantees a fully open EU market for Kenyan products, which mainly consist of agricultural goods such as tea, coffee, cut flowers, peas, and beans. Currently, the Netherlands, Germany, and France are the leading destinations of EU imports.
Over a 25-year period, Kenya will partially and gradually open its market to European goods, reducing tariffs. Currently, Kenya imports mainly machinery while the mineral and chemical products are also imported to a lesser extent from the EU. Under the EPA, Kenya can protect certain sensitive products by excluding them from tariff cuts or by implementing safeguards if there is a sudden increase in imports from the EU.
The EPA aims to reduce economic shocks resulting from various factors like the COVID-19 pandemic and the climate crisis. President William Ruto said the agreement will put more money in the pockets of Kenyan traders and also make Kenya a natural hub for EU products to East African states. The EPA is the first broad trade deal between the EU and an African nation since the EU signed a similar agreement with Ghana in 2016.
The EPA is not just about trade; it also contains a development perspective for Kenya, enforcing binding commitments related to environmental protection, climate action, fighting gender inequality, and strengthening labour rights. The agreement also includes trade-related development assistance, which will help to tackle some factors limiting Kenya’s exports such as lack of productive capacities, infrastructure, human capital, and EU standards compliance.
Kenya signed a similar trade agreement with the United Kingdom in December 2020, aiming one with the United States, which could be signed next year. Kenya is keen to boost non-oil trade with the United Arab Emirates and is currently in talks with the country.
