September 29, 2016 / 4:32 PM / 10 months ago

Kenya secures deal to keep duty-free access to EU market

3 Min Read

A worker picks tea at a plantation in Githunguri near Kenya's capital Nairobi, January 6, 2012.Thomas Mukoya/File Photo

NAIROBI (Reuters) - Kenya will retain duty-free access to the European Union for its products, its trade minister said on Thursday, reassuring exporters who feared problems in clinching a deal between the EU and the East African Community could lead to tariffs.

Kenyan businesses have been alarmed by delays in signing the trade pact, known as the Economic Partnership Agreement (EPA), between the EU and five-nation East African Community (EAC), after reservations raised by Tanzania.

Kenya stood to lose most as it would have lost duty- and quota-free access, whereas other EAC member states are categorised as poorer nations who keep that access whether or not the more comprehensive trade deal is signed.

The deadline for the EAC to finalise the agreement was Oct. 1 and there were fears that Kenyan goods could be locked out or become subject to tariffs.

"Come next week Kenyan exports will still have access to the EU market without paying any duties, as it was before," Aden Mohamed, the Kenyan minister for trade and industrialisation, told Reuters.

A worker picks tea at a plantation in Githunguri near Kenya's capital Nairobi, January 6, 2012.Thomas Mukoya/File Photo

Kenya, which exports coffee, tea and horticultural products to Europe, secured the continued free access to EU markets after it signed the deal with the EU, despite Tanzania holding back.

Kenya has also already ratified the pact in parliament and it presented a copy to the EU in Brussels on Wednesday.

EAC heads of state are scheduled to discuss the EPA with the EU in January but Mohamed said Kenyan goods would maintain their access regardless of the outcome.

"We are hopeful everybody will come on board and then rather than just having a window of access into the EU, we will enjoy a much more comprehensive agreement that has some benefits of development infrastructure that will come as a result of that agreement being signed," he said.

Mohamed also said on Thursday that the government had revoked a rule in the 2015 companies law demanding that foreigners investing in Kenya offer a 30 percent stake to a Kenyan party. Foreign investors had criticised the new rule.

"The spirit of what we want to do in the country is to have an economy that is open for business and doesn't want to impose pressure," he said.

Editing by Edmund Blair and Gareth Jones

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