An In-Depth Look at the EU-Kenya FTA: Opportunities and Challenges with the New Trade Agreement
The EU is set to pass the EU-Kenya FTA. Download the latest draft statute and key annexes here to prepare to ship duty-free under the FTA's Rules of Origin + Explainer, Factsheet and FAQ
The EU and Kenya signed a new Free Trade Agreement, known as an EPA.
This agreement will provide duty-free, quota-free EU market access to all exports from Kenya as soon as it enters into force, as well as partial and gradual opening of the Kenyan market to imports from the EU.
The agreement includes binding provisions on trade and sustainable development, such as climate and environmental protection and labour rights, and a transparent dispute resolution mechanism. This is the most ambitious economic partnership agreement the EU will have with a developing country when it comes to sustainability provisions.
Context
The EU-East African Community (EPA) is put into effect by the EU-Kenya Economic Partnership Agreement, which also opens up membership to further EAC countries.
The EPA and its bold promises will allow the EU to deepen and expand its trade agreements with African countries and advance their sustainability objectives.
The EU, Kenya's second-largest economic partner, and top export destination, exchanged €3.3 billion in 2022, up 27% from the previous year.
Concluding negotiations for an Agreement with Kenya - the economic hub of East Africa - is a historic moment. It puts us firmly on the path towards a privileged relationship based on trust, rules and opportunity. It will bring our regions closer, and unlock new areas of cooperation and mutual benefit for our workers, businesses and traders. This Agreement enshrines a shared commitment to sustainable development, including labour rights, the environment and climate action. We now look forward to quick ratification so we can make this deepened cooperation a reality.
Valdis Dombrovskis, Executive Vice-President and Commissioner for Trade - 18/06/2023
What is the EPA all about in a nutshell?
The EPA would fully open the EU market for Kenyan products and attract EU investment in Kenya because of its stable and clear legislative framework, opening up new opportunities for Kenyan businesses and exporters.
This well-balanced agreement safeguards agriculture and Kenya's developing industries while allowing the country more time to gto grow its market gradually increase Kenya's competitiveness, a chapter on economic and development cooperation is included. This would facilitate Kenya's implementation of the EPA, assist local farmers meet EU requirements, and maximise the potential benefits of this agreement with EU development money.
Background
Negotiations on the Economic Partnership Agreement between the East African Community and the EU (EAC-EU EPA) were concluded in 2014. Kenya signed and ratified the Agreement in September 2016. The EU and its Member States also signed it in June 2016. However, implementation of the EPA has not been possible because not all EAC partner countries signed and ratified it.
The EAC Summit of 27 February 2021, under the chairmanship of Kenya, reached a decision allowing individual EAC states to implement the EPA. Subsequently, in May 2021, Kenya formally requested to engage with the EU to move forward with the implementation of the Agreement on a bilateral basis.
On 17 February 2022, the EU and Kenya signed a Joint Statement at the margins of the EU-AU Summit agreeing to advance negotiations on the EU-Kenya EPA, which will remain open for other EAC Partners States. Negotiations were concluded on 24 May 2023 at technical level, and on 19 June 2023 at political level.
On 28 September 2023, the Commission submitted its proposals for Council Decisions on the signing and the conclusion of the EU-Kenya Economic Partnership Agreement, together with the text of the Agreement.
What about the Rules of Origin?
Bothe the EU and Kenya confirm the text of Article 9 of this Agreement about rules of origin and agree that the EU-EAC EPA's Protocol on rules of origin will serve as the basis for the future protocol on rules of origin that must be adopted under Article 9(2) of this Agreement. This includes the structure of the protocol, with some minor changes needed to account for the fact that this Agreement is between two countries. Each Party can make good suggestions for these kinds of changes, keeping in mind how this protocol will affect the region in the future. Article 9(1) of this Agreement says that until the Parties agree on a protocol on rules of origin, each Party must follow the rules of origin set out in Regulation (EU) 2016/1076 of the European Parliament and of the Council (Market Access Regulation)1. This is because that is the law that applies to the Party that is importing. Article 9(2) of this Agreement says that as soon as possible after this Agreement goes into effect, the Parties will agree on a protocol on rules of origin that will apply to both exports from the European Union and the Republic of Kenya. Talks about this kind of protocol will begin right away.
Next Steps
Once the agreement is signed, and EP gives its consent, the agreement can enter into force.
Once approved by Kenya and the EU, the agreement becomes effective, and the parties may provisionally implement provisions.
Legal Documents for Download
Proposal for a Council Decision on the signing, on behalf of the European Union, of the Economic Partnership Agreement between the Republic of Kenya, Member of the East African Community of the one part, and the European Union of the other Part - See Annex 1,2,3,4,5,6,7,8 & 9
Proposal for a Council Decision on the conclusion, on behalf of the European Union, of the Economic Partnership Agreement between the Republic of Kenya, Member of the East African Community of the one part, and the European Union of the other Part - See Annex 1,2,3,4,5,6,7,8 & 9
More information & Links
Key Documents
Links
Factsheet
The Trade Agreement explained
Key Elements of the Agreement
Weblinks
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