The Economic Partnership Agreement (EPA) provides a basis for promoting job creation on both sides as well as targeted cooperation to improve Kenya's economic development. It is the most ambitious trade agreement the EU has ever signed with a developing country in terms of sustainability provisions such as climate and environmental protection, workers' rights and gender equality.

The agreement reduces tariffs

The bilateral Economic Partnership Agreement (EPA) permanently eliminates EU import duties on Kenyan goods. In return, Kenya undertakes to gradually liberalize 82.6 percent of imports from the EU over 25 years after the agreement comes into force. Tariffs for various agricultural products, chemicals, plastics, paper and cardboard goods, textiles and clothing, ceramic products, glassware, furniture and certain vehicles will remain in place.

Trade volume at 3.3 billion euros

The EU is Kenya's most important export market and the country's second largest trading partner. The total trade volume in 2022 was 3.3 billion euros, an increase of 27% compared to 2018. The EPA will create even more opportunities for Kenyan companies and exporters. On the one hand, it fully opens up the EU market for Kenyan goods. Secondly, it offers incentives for EU investments in Kenya through greater legal certainty and more stability.

Background

The GSP scheme is a trade policy instrument of the European Union (EU). It grants tariff preferences to developing countries when importing goods into the EU.

The GSP system consists of a

– general arrangement

– special arrangement in favor of least developed countries [so-called Everything but Arms (EBA) initiative] and

– Special incentive arrangement for sustainable development and good governance [GSP+].

The list of GSP beneficiary countries is reviewed annually. GSP Regulation (EU) No. 978/2012 also contains provisions on the removal of tariff preferences for groups of products (so-called graduation) and safeguard measures in case of excessive imports into the EU. This is the case when the average value of these products imported into the EU from the GSP beneficiary country exceeds the thresholds listed in Annex VI of the said Regulation for three consecutive years. The thresholds are calculated as a percentage of the total value of imports of the same products into the Union from all GSP beneficiary countries.