Kenya, EU ink ‘historic’ trade deal

NAIROBI-Kenya and the European Union recently signed a long-negotiated trade agreement to increase the flow of goods between the two markets, as Brussels pursues stronger economic ties with Africa.

The Economic Partnership Agreement will give Kenya duty-free and quota-free access to the EU, its biggest export market, while European goods will receive progressive tariff reductions.

The agreement is the first broad trade deal between the EU and an African nation since 2016 and follows a spending spree by China on lavish infrastructure projects across the continent. “Although today represents a moment of monumental promise, it is also the beginning of a historic partnership for historic transformation,” Kenyan President William Ruto said at a ceremony attended by European Commission chief Ursula von der Leyen in Kenya’s capital Nairobi.

“The core of this arrangement is to put real money into the pockets of ordinary people,” said Ruto.
EU chief von der Leyen said the partnership was a “win-win situation on both sides” and called on other East African nations to join the pact, which came after years of negotiations that concluded in June.

“We are deepening trade ties and building up our economic resilience,” she said. “We are opening a new chapter in our very strong relationship and now our effort should be focused on implementation,” von der Leyen added. Both the Kenyan and the European parliaments must ratify the deal before it comes into force. The European Union said that the deal was “the most ambitious economic partnership” it had with a developing country.

It includes commitments to sustainable development in areas such as labor rights and environmental protection, the EU said in a statement.

“A dedicated chapter has been included on economic and development cooperation, aimed at enhancing the competitiveness of the Kenyan economy,” the EU said. EU’s trade commissioner Valdis Dombrovskis said the “historic agreement” would unlock new areas for cooperation and benefit. The 27-nation bloc accounts for more than 20 percent of Kenya’s overall exports, according to government data, mainly agricultural products, including vegetables, fruits, and the country’s famous tea and coffee. Total two-way trade between the markets hit 3.3 billion euros ($3.6 billion) in 2022, up 27 percent since 2018, according to EU figures. Africa has become a renewed diplomatic battleground since the Ukraine war began, with Kenya and other countries on the continent aggressively courted by Russia China, and the West.

An economic powerhouse of East Africa, Kenya is seen by the international community as a reliable and stable democracy in a turbulent region.

The EU has taken steps to counter China’s Belt and Road program, announcing in February it would increase investments in Kenya by hundreds of millions of dollars through its own Global Gateway initiative.
Kenya’s biggest infrastructure project, a $5 billion railway line connecting Nairobi to the port city of Mombasa, which opened in 2017, was built by a Chinese company with Chinese financing. Kenya is also negotiating a trade deal with the United States.

The new trade deal with Europe is the culmination of trade talks between the EU and the regional East African Community (EAC) that started roughly a decade ago. Kenya signed and ratified an initial trade agreement with the EU in 2016 alongside the EAC but it fell through after some countries failed to green-light the pact, with Kenya eventually pursuing its deal. “This agreement leaves the door wide open for our EAC partners to join so that together as a region we can benefit,” Ruto said.

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