Kenya, EU sign EPA agreement - CNBC Africa

Kenya, EU sign EPA agreement

East Africa

by Elayne Wangalwa 0

Kenyan exporters can breathe a sigh of relief following a fruitful completion of a new Economic Partnership Agreement. PHOTO: Getty Images

The Kenyan government and the European Union (EU) on Tuesday signed the EPA agreement after a two day deliberation in Brussels, Belgium.

Exporters eyeing the European market were expected to face a tax bill of up to 100 million Kenyan shillings per week if a new trade agreement was not signed. This deal will enable the East African country to save up to 150,000 jobs that would have been lost. However, the earliest that the EPA agreement will be implemented is January 2015.

This move has been welcomed by the Kenya Flower Council (KFC) which was going to be the most affected.

(READ MORE: Kenya flower industry under threat from delayed EU agreement)

“Having resolved the contentious issues on export taxes, subsidies and good governance, paving way for amendment of the EU Market Access Regulation (MAR) 1528/2007, to include Kenya for duty-free, quota free status for all its exports to the EU market,” a statement by the council read.

The flower council said it would continue to urge the concerned EU parties to quicken the process as both parties continue with the process of ratification and finalisation of the agreement.

“The industry acknowledges the Government’s investment and support to the success of the whole process and also in promoting the flower industry abroad. The Ministry of Foreign Affairs and International Trade, through its economic diplomacy portfolio, is aggressively engaged in facilitating promotions in Europe, Eastern Europe, Japan, Asia and the USA which have been very successful.”

In 2007, the East African Community (EAC) member states signed an interim trade deal with Europe to warranty duty and quota-free access to the EU market after the expiry of the non-reciprocal trading arrangement to a waiver granted in 2001.

Emerging markets have tax free access to European markets under the EPA’s regime. The deal stands until the year 2020 when it will be renegotiated.