Kenya and the East African Community (EAC) risk losing the European Union (EU) flower and horticulture market to newcomers. The EU and EAC have made little progress in negotiating the Economic Partnership Agreements (Epas) that earned Kenyan more than 200 million euros (Sh172 billion) last year.
Failure to conclude the negotiations will see regional exports attract duty ranging between 5.5 per cent and 15 per cent. With less than eight months to go before Kenyan products to the EU start attracting high taxation, Germany Ambassador and head of EU Delegation to Kenya Lodewijk Briet warned that failure by the two regions to reach an agreement by October 1 will be catastrophic for the economies of the involved states. While it would be a loss for both the EAC and EU, he cautioned that EU was currently negotiating agreements with other regions. “What we stand to lose in trade terms is huge… The longer it takes, the stronger the trade erosion,” he said. “There are agreements that the EU is signing with other regions and there is a risk of Kenyan flowers being replaced by, for example, flowers from Colombia.”
A meeting between Kenyan and EU officials late last month was not able to conclude some of the contentious issues. Another meeting is expected either towards the end of this month or early next month. “There was little progress made last month. However, both parties underscored the importance of concluding the negotiations,” Briet said. He said most of the issues had been agreed on and only a few needed clearing. But these could end up costing Kenyan businesses exporting to Europe. Some of the pending issues include rules of origin for agricultural produce and EU governments’ subsidies to their farmers. If EAC countries fail to meet the October deadline, Kenyan exports to the EU will attract high taxes unlike her neighbours. Kenya is classified as a developing country while Rwanda, Burundi, Uganda and Tanzania are least developed countries. EPAs, while giving preferential treatment to products from the region, require EAC to open up to goods from the EU.