Ruto upstages neighbours with historic Europe bloc deal on trade

President William Ruto with the President of EU Commission Ursula von Der Leyen witnessed the signing of the Kenya - European Union Economic partnership agreement at State House Nairobi. [PCS]

Kenya and the European Union (EU) bloc on Monday finally signed a new bilateral deal that will boost trade between the two regions whose controversial negotiations have been years in the making.  

The Kenya deal is the culmination of trade talks between the EU and the East African Community (EAC) that started over a decade ago. 

A section of EAC member states challenged the pact's finalisation. Kenya has, however, decided to push ahead with the deal alone. 

 

The deal was signed at State House in Nairobi during a ceremony presided over by President William Ruto and European Union Commission President Ursula von der Leyen. 

Once ratified and entered into force, Kenya will receive duty-free and quota-free access to the EU, its biggest market where it sends roughly one-fifth of all its exports. 

The EU is Kenya's second-largest trading partner, with total trade in 2022 at €3.3 billion (Sh545 billion), an increase of 27 per cent compared to 2018. 

Imports from the EU to Kenya such as chemicals and machinery will receive progressive tariff reductions over a period of 25 years, but some sensitive products will be excluded. 

Kenya’s main exports to the EU are agricultural products, including vegetables, fruits as well as tea and coffee. 

More than 70 per cent of Kenya’s cut flowers are sold in Europe. 

"Today's agreement heralds a new dawn where Kenyan goods gain immediate duty- and quota-free access to the European market," said Kenya's Trade and Industry Cabinet Secretary Rebecca Miano, in a statement. 

"Over time, European goods will also gain preferential access to the Kenyan market." 

The agreement will now enter into force after both European and Kenyan parliaments give their consent. 

In signing the deal, Kenya risked the wrath of her East African neighbours who have been dithering to sign it. But both the EU officials and President Ruto prevailed upon the EAC neighbours to back the deal. 

And Monday, calls for the role of its East African neighbours in the future of the pact with the European bloc dominated and overshadowed its signing ceremony. 

"This agreement that we are signing today leaves the door open, and I say, wide open, for our EAC partners to join," Ruto said at the signing ceremony, alluding to the concerns by Kenya's neighbours who have given the deal a wide berth.  

"We encourage the other Eastern African countries to join," added EU Commission President Ursula von der Leyen. 

In 2014, negotiations for an economic partnership agreement were concluded between the EU and the EAC, consisting of Kenya, Rwanda, Uganda, Burundi, and Tanzania. However, only Nairobi proceeded to ratify the agreement. 

There have been jitters about the implementation of the pact on some of its controversial clauses. 

The pact for instance elicited controversy with critics arguing it does not provide reciprocal free entry for Kenyan labour. 

"The EU demands 80 per cent removal of tariffs on its goods over the period, risking a major ending of local manufacturing, and consequential local unemployment; the EU was not making real cuts to their own subsidised producers, thus competing unfairly against our unsubsidised food-based industries and affecting our long-term food security," wrote senior counsel Pheroze Nowrojee in a recent commentary. 

"These are not calls for abandonment of the process. These are calls for these specific dangers and future possible failures to be addressed, and safeguards put into place." 

The EU, however, said earlier the agreement includes binding provisions on trade and sustainable development, such as climate and environmental protection and labour rights, and a transparent dispute resolution mechanism. 

The new deal comes as President Ruto seeks new global allies in trade and investments through a spirited diplomatic charm offensive that has taken him around the Middle East, Africa, Europe, Asia and the US.  

It also comes as the EU seeks to undercut the rise of economic influence by rivals such as China in Kenya, which is the region's gateway.