Kenya-EU trade deal: Why the East African Community was left out

23 June 2023

Import Data Kenya

As the two sides signed a 25-year trade agreement, Kenya's President William Ruto praised his nation's "remarkable partnership" with the EU, but it has cast doubt on East African unity.

This has been a hot topic of discussion all week, and it's going to get even hotter once we hear about the six other member states of the East African Community (EAC), the regional economic bloc that some people think ought to have been at the center of the deal with the larger, more powerful EU.

They haven't spoken up yet, but the pact, which locks in both parties for 25 years and is the most comprehensive Kenya has ever signed with the EU, seems to go against at least the Tanzanian government's position.

Why is the East African Community Left out of the Kenya-EU Trade Deal?

In a statement from the previous year, it stated that it would only support a deal that benefited the entire EAC, not just Tanzania. Econews Africa, a lobbying group, is so furious with Kenya's decision that it has threatened to fight it in court.

Executive director of Econews Africa Edgar Odari claims that Kenya has "effectively jumped the gun, opened up new negotiations with the European Union, [including] a new chapter on trade and sustainable development, and gone ahead to get it signed by President [Ruto]".

In 2016, Kenya signed a deal with the EU that was mediated through the EAC, but it was never fully implemented because the majority of the other members of the regional bloc refused to do so.

Supporters of President Ruto's bilateral accord accuse them of delaying its completion, which has caused Kenya to suffer the most. They point out that only Kenya is an "emerging" country, while the other members of the EAC are "least developed," thus their exports might continue to reach the EU market even in the absence of a treaty.

However, Kenya was forced to come to its own arrangement as a result, or else risk losing access to the lucrative market. Kenya's second-largest economic partner after China is the 27-nation EU, which also serves as the country's primary export market. A total of $1.3 billion (£1 billion) in vegetables, fruits, and flowers are imported into the EU from Kenya, while $2.2 billion worth of mechanical, chemical, and mineral products are sent to Kenya, according to Import Data Kenya.

Hussein Mohammed, the presidential spokesperson for Kenya, praised the agreement and noted some significant points:

  • It will boost manufacturing sector investment.
  • Create employment across industries.
  • Make the nation a center for European businesses attempting to reach the East African market.
  • It provides duty-free access to Kenyan farmers' largest export market.

The fact that the agreement grants the EU unrestricted access to the Kenyan market and the decrease of tariffs over a 25-year period, however, has received virtually no commentary from Kenyan officials. There are many worries that this would cause an influx of European goods into Kenya, harming domestic industries.

The government will need to support Kenyan companies in growing in order to stave off competition from much larger European enterprises while ensuring that exports to the lucrative EU market rise.

It is so certain that it can handle the issue that it is considering signing a bilateral trade agreement with the US next year, raising concerns about the implications for efforts by African states to forge a unified economic front.

Also read: Kenya will speed up cargo clearance through the AEO programme

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