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Kenya has now begun the negotiation process on the interim Economic Partnership Agreement (the EPA) with the European Union (the EU) — a significant step in a journey that has taken more than a decade. [i] Initially, the EPA was to be entered into by the EU and the member states of the East African Community (the EAC) – Rwanda, Burundi, Tanzania, Kenya and Uganda – after twelve (12) years of negotiations that were concluded in October 2014.[ii]
Rwanda and Kenya both signed the EPA in September 2016, but only Kenya subsequently ratified the agreement. The remaining member states refrained from signing the EPA citing various concerns, including its potential to undermine their local industries and that it did not tackle other important issues such as labour standards, climate change and human rights.[iii] Since all member states of the EAC were required to sign and ratify the EPA, it has yet to enter into force.[iv] In a previous Legal Alert, we discussed why the failure of the member states to arrive at a common position left Kenya in a precarious position.
To break the deadlock, during the 21st Ordinary Summit of the East African Community Heads of State that took place in February 2021, member states recognised that due to the different and unique needs of the various member countries, some countries should be allowed to proceed with the EPA deliberations under the principle of variable geometry, which gives countries the flexibility they require in selecting their pace to be bound by an agreement often entered into by members of the same trading bloc.[v] Having been given the go ahead, Kenya could now begin negotiations on the Kenya-EU EPA.
Features of the Kenya-EU EPA
The Kenya-EU EPA is, by and large, likely to reflect the 2015 EAC-EU EPA whose aim is to liberalise trade in goods on a mutual basis. Some of the features include duty-free quota-free access to the EU market for all Kenyan exports including agricultural products, fishery products and non-crude petroleum oils.
Additionally, the agreement sets up trade-related rules on sanitary and phyto-sanitary (SPS) measures, and barriers to trade and customs facilitation aiming, inter alia, to address problems arising from SPS measures, to promote regional harmonisation of measures and to enhance Kenya’s capacity to implement and monitor SPS measures.[vi] This liberalisation will be accompanied by trade-related development co-operation with a view to developing their trade and investment relations thus boosting sustainable economic growth, allowing Kenya to achieve the objectives of the United Nations (UN) 2030 Agenda for Sustainable Development, and job creation.[vii]
Several chapters have been introduced, including on export refunds applied on EU exports to the EAC; economic and development cooperation; and fisheries.[viii] These chapters indicate a deepened policy dialogue on agriculture and food security, enhanced capacity building, EPA implementation and EAC competitiveness, and a reinforced cooperation on the sustainable use of resources, such as unreported, unregulated and illegal fishing, respectively.
Both Kenya and the EU have expressed a strong desire to integrate and negotiate environmental protection and social rights in their trade and investment relations with the aim of achieving the objectives of the UN 2030 agenda for sustainable growth. Subject to an appropriate dispute settlement mechanism, the EU and Kenya have also agreed to discuss and deliberate on binding provisions on trade and sustainable development.