Kenya Bypasses East Africa Community – Signs Trade Deal with EU

Kenya’s President William Ruto hailed the newly signed 25-year trade agreement with the European Union (EU) as a significant milestone in the country’s partnership with the EU. However, the accord has sparked debates surrounding East African unity, prompting discussions on whether Kenya’s dominant economic position undermines regional cohesion or if it had no choice but to pursue an independent path.

The agreement, considered the most extensive deal Kenya has ever brokered with the EU, has led to debates within the East African Community (EAC). This regional trading bloc, ideally at the core of such agreements with the EU, is yet to provide official reactions. The silence from the other six EAC states contrasts with Tanzania’s stance, emphasising support only for agreements that benefit the entire EAC, not just individual nations.

Kenya’s decision to seal this comprehensive bilateral agreement has drawn criticism, particularly from advocacy groups like Econews Africa. Edgar Odari, the executive director of Econews Africa, condemns Kenya’s move, accusing the country of prematurely engaging in fresh negotiations with the EU and signing the deal without comprehensive regional consensus.

While Kenya previously inked an EAC-brokered agreement with the EU in 2016, it did not materialize fully due to other EAC members’ reluctance to sign. Supporters of President Ruto’s bilateral deal argue that delays by other EAC members in finalizing the prior agreement significantly impacted Kenya’s trade interests, especially given Kenya’s classification as an “emerging” country, diverging from other EAC nations labeled as “least developed.”

The EU stands as Kenya’s second-largest trading partner after China, dominating Kenya’s export market. While the deal is hailed for its potential to boost investment, job creation, and position Kenya as a gateway for European companies eyeing the East African market, concerns arise regarding the potential influx of European products. The reduction of tariffs and unhindered access for EU products could threaten local industries.

As Kenya embarks on this trade journey with the EU, there’s an urgent need to fortify local industries to withstand competition while amplifying exports to the EU market. This entails supporting Kenyan businesses to scale up and compete against larger European players. The government remains optimistic about addressing these challenges and even eyes a bilateral trade deal with the US in the coming year.

However, this trajectory prompts contemplation about the impact on African states’ collective efforts to forge a united trade front, raising concerns about regional solidarity amid Kenya’s pursuits of standalone agreements.

The EU-Kenya Economic Partnership Agreement (EPA) aims to boost bilateral trade, enhance investment flows, and contribute to sustainable economic growth. It is hailed as the most ambitious trade deal the EU has ever signed with a developing country. The agreement was signed during an official ceremony in Nairobi, with European Commission President Ursula von der Leyen and Kenyan President Dr. William Samoei Ruto in attendance.

The EU-Kenya EPA builds on the country’s role in driving sustainability efforts on the continent, particularly in climate change initiatives. Kenya co-leads the Coalition of Trade Ministers on Climate initiative, displaying its commitment to sustainable development.

Kenya’s EU trade deal has implications for the East African Community (EAC). While Kenya’s strong economic position was a factor in pursuing a separate agreement, concerns persist about potential discord within the EAC. Tanzania, in particular, has emphasized supporting agreements benefiting the entire EAC rather than individual countries.

Criticism of Kenya’s move stems from concerns about the lack of comprehensive regional consensus. Although Kenya had previously engaged in an EAC-brokered deal with the EU in 2016, delays from other EAC members impacted its trade interests, leading Kenya to pursue its own agreement to safeguard its market access.

The deal promises increased market access for Kenyan products in the EU, potentially benefitting Kenyan businesses and exporters. However, questions arise about the potential impact of reduced tariffs and EU products flooding the Kenyan market, posing a threat to local industries.

Addressing these concerns necessitates bolstering local industries to compete against larger European players while fostering increased exports to the EU market. This move by Kenya prompts contemplation about its effects on the collective efforts of African states to create a united trade front, raising concerns about regional solidarity amidst Kenya’s pursuit of standalone agreements.

Read more on this trade deal on the EU official website.