EU inks new deal with Kenya in a bid bolster trade in Africa

NAIROBI, Kenya - In a move to counter Chinese influence in Africa and boost economic links within the continent, the European Union and Kenya have inked a trade agreement.

Kenya would get duty-free and quota-free access to the EU, its largest market and the destination of around one-fifth of all exports, once the agreement is confirmed and implemented.

Progressive tariff reductions will be applied to some imports from the EU to Kenya over a 25-year period, however, some delicate goods would be exempt.

“Today is a very proud moment for Kenya, and I believe a very proud moment for the European Union,” Kenyan Trade Minister Moses Kuria said after signing the accord with EU Trade Commissioner Valdis Dombrovskis.

 More than 70 per cent of Kenya’s cut flowers are destined for Europe.

EU is second in importance to the World Bank as a development partner for Kenya and this deal with the EU would give Kenyan farmers "assurance of a predictable market" and new potential to expand this trade.

“It ensures a stable market for industrialists, for our farmers, and also industrialists in the European Union,” President William Ruto said.

This new deal comes after China went on a spending binge on expensive infrastructure projects throughout the continent, and it is the first significant trade agreement between the EU and an African country since 2016.

The EU said earlier this year that they will raise investments in Kenya by hundreds of millions of euros through its own Global Gateway plan, in an effort to compete with China's Belt and Road initiative.

The agreement fits into a recent trend of Western allies courting African countries as Russia and China acquire more influence there.

The Kenya agreement is the result of trade negotiations that the EU and the East African Community (EAC) began around ten years ago. An economic partnership deal was finalized in 2014 by the EU and the EAC, which at the time consisted of Kenya, Rwanda, Uganda, Burundi, and Tanzania. However, only Nairobi ultimately ratified the pact.

Although Dombrovskis stated that the deal was still available for additional EAC countries to join, including the Democratic Republic of the Congo and South Sudan, Kenya went its own way.

The head of state also noted that increased trade with EU — with population of about 500 million people — will create jobs, expand earnings and stimulate sustainable economic growth.

“This is a giant step forward. It sets the stage for the initiation of the EAC partner states into the Agreement.”

The development follows President Ruto’s meeting in Brussels in March where the Chief Negotiators were tasked to expedite the outstanding aspects of EPAs with the view of reaching a conclusion by June.

Beyond trade, President Ruto said the Agreement is designed to stimulate investment and manufacturing.

“Kenya is finally ready to take its place as a global player in export-led manufacturing and services,” explained President Ruto.

He encouraged European firms that import goods from Kenya to invest in value addition and export finished, value added products out of the country.

The negotiated agreement also anchors Kenya as the natural Hub for European companies seeking markets in the EAC, COMESA, SADC and the African Continental Free Trade Area.

“The agreement opens doors for other trade and investment deals to be signed,” added Mr Kuria.

GAROWE ONLINE