Kenyan exporters are encountering numerous non-tariff barriers that restrict their full access to the European Union market, despite existing trade agreements, including the EU-Kenya Economic Partnership Agreement (EPA) which came into effect on July 1, 2024. This agreement allows Kenyan exports duty-free entry into the 27-member European Union, aiming at a market of approximately 500 million people. Conversely, Kenya will gradually open its markets to EU products over a 25-year period.
A report from the Kenya Institute for Public Policy Research and Analysis (KIPPRA) highlights that despite the preferential margins offered by countries such as Bulgaria, Slovenia, Luxembourg, and Romania, among others, technical regulations including rules of origin and phytosanitary controls pose significant challenges. These regulations, aimed at protecting domestic industries and consumer health, increase the cost and complexity of accessing the EU market, particularly impacting Micro, Small, and Medium Enterprises (MSMEs) due to their opaque nature compared to more transparent tariff measures.
The EU-Kenya EPA is designed to encourage cooperation in standardization, certification, and quality assurance to eliminate unnecessary technical barriers. However, the high cost and stringent requirements of complying with non-tariff measures such as labelling and rules of origin continue to hinder Kenyan exporters. This situation is contrasted with countries like the Czech Republic, Finland, and the United Kingdom, which, despite having higher tariff measures, present fewer non-tariff barriers, making them relatively more attractive to both MSMEs and larger firms.
The EU remains Kenya's second-largest trading partner and a crucial export market, with exports to the EU totaling Sh150.1 billion in the last year, marking a 12.7 percent increase from the previous year. This growth was partly attributed to an increase in exports of cut flowers, avocados, and beans. However, to harness the full potential of the EU market, there is a need to enhance export competitiveness and address the challenges posed by non-tariff barriers.
The Kenyan government, led by CS Salim Mvurya, is planning a nationwide sensitisation programme to inform the business community about the opportunities presented by the EPA. The EU Ambassador to Kenya, Henriette Geiger, has also emphasized the agreement's potential to increase employment opportunities and strengthen economic ties between Kenya and the EU.
Source: The Star