News that Kenya has finally unlocked the ambitious Economic Partnership Agreement (EPAs) trade deal with Europe after many years is good news for Kenya, especially the agriculture and manufacturing sectors. It promises to ensure Kenyan exports will get unfettered access to the 27-member bloc on a duty- and quota-free basis while gradually lowering import duty for European products.
But despite the immediate benefits, Kenya should not open its market without strengthening manufacturing and intervening aggressively on the prohibitive costs of doing business. The Ruto administration should use this window to bolster homegrown industries to make local products competitive.
The deal requires Kenya to gradually open up to imports from Europe within 25 years. The government must emphasize value-addition, processing and manufacturing so that local industries can increase exports of finished products, derive more value and put more money in the pockets of Kenyans.
The EPA deal should also not hurt the East African Community’s interests, which is partly blamed for the delay. Implementation of the EPA treaty, which EAC signed and ratified in 2016, stalled after the other EAC countries declined to endorse it. Rwanda signed but did not ratify it while Tanzania and Uganda refused to approve it for economic and political interests, including the fear of European goods swamping the market.
Kenya and the EU have, however, used the window opened by the EAC Heads of State Summit in February 2021 to sign the deal bilaterally and leave room for its EAC peers to join them. This is unlike when all EAC member countries were supposed to sign and ratify the deal with the EU for it to come into force.
A non-homogeneous deal will trigger friction among trading partners. Kenya is already leading negotiations to establish a tripartite deal between the EAC, Common Market for Eastern and Southern Africa (Comesa) and the Southern African Development Community (SADC). This should be in sync with other deals with the West to avoid feuds with its neighbours.
For the full benefits of EPA, the government must ensure local industries are protected against flooding the market with imports. When it is tabled in Parliament for approval, MPs should ensure it is in the best interest of Kenya and the region.