Looming EU regulations cloud future of flower sector

By Luke Anami

Kenya stands to lose $93.8 million (Sh16. 5 billion) a year.

This could happen if the European Union (EU) endorses a proposal to amend the Market Access Regulations that allow duty free flower exports to the EU market.

The East African Legislative Assembly (Eala) passed a resolution urging the East African Community  (EAC) Council of Ministers to engage EU and address the region’s concerns. EU endorsement could derail the completion of Economic Partnership Agreement negotiations.

“EAC suffers from chronic supply-side constraints and challenges and if implemented, the economic bloc stands to lose tariff revenue amounting to approximately $301 million (Sh25.5 billion) yearly,”said Gervase Akhaabi, Kenyan Eala MP who read the resolution. “Kenya alone shall lose tariff revenue amounting to $193.8 million a year,”

Early this year, the European Commission proposed an amendment to the regulations, which if implemented, local flowers will attract 16 per cent duty and therefore raise the cost of trading in flowers with the EU.

Kenya heavily relies on the EU market  for its horticulture exports  like flowers, tea, vegetables and coffee.  It could suffer most if the avenues are closed. Trade between the EAC and EU is about Sh450 billion.

“The EAC had requested for amendment on Market Access Regulation (EC 1528/2007),” EAC Secretary General Amb Richard Sezibera said.

“There is no stalemate in the talks but in certain areas the negotiators are yet to arrive at consensus,” EAC Secretary General Amb Richard Sezibera said. Uganda’s deputy Prime Minister and minister for EAC, Eriya Kategaya said it was important for the region to continue to negotiate as a bloc.