Kenya, EU to develop platform to enhance market access
08 May 2014, 19:35
Nairobi - Kenya and the European Union (EU) will develop a bilateral platform to address challenges that Kenyan products face in accessing the EU market, a Kenyan government official said on Thursday.
Foreign Affairs Principal Secretary Karanja Kibicho told journalists in Nairobi that EU has from repeatedly introduced stringent sanitary and phytosanitary (SPS) measures which constitute a handicap for Kenyan exporters.
"The creation of a bilateral dialogue will ensure fairness as well as a level playing field," Kibicho said during the EU-Kenya Trade and Investment Forum in a speech read on his behalf by head of Political and Diplomatic Secretary Robert Ngesu.
The platform is expected to be operational once the East Africa Community and EU sign an EPA. Kibicho added that current trade relations between Kenya and EU are based on the interim Framework Economic Partnership Agreement.
"The framework allows for duty free entry of products from Kenya into EU," he said. Kibicho urged EU to provide Kenya with technical assistance and cooperation in the field of standards compliance.
"This will boost the global competitiveness of Kenyan export products," he said. The PS noted that the non-conclusion of the Economic Partnership Agreements (EPA) between Kenya and EU has created an atmosphere of uncertainty.
"This has stifled Foreign Direct Investment (FDI) into the country," he said. Ngesu said that EPAs should have the policy flexibilities needed for development and the enhancement of production capacities.
As of 2013, EU accounted for 17.2 percent of Kenya overall trade. EU is currently the second largest export market for Kenya as it absorbs close to 25 percent exports and 14 percent of imports.
"Kenya's main exports include cut flower, tea, coffee and fish while imports include machinery, chemicals and manufactured goods, " the political secretary said. The trade bloc is also major source market for tourists into Kenya.
"Out of the over one million tourists' arrivals in 2013, approximately 46 percent were from EU member states," he said.
Of the 28 EU member states, 19 have missions accredited to Kenya while Kenya has 14 missions in Europe and seven Honorary Consulates.
Head of EU Delegation to Kenya Lodewijk Briet said that EU is Kenya's second largest cooperation partner after the World Bank, accounting for about 15 percent of government's annual development budget.
Key sectors that have benefited from EU include transport, health, education, agriculture, rural development, energy and regional infrastructure.
Briet said that many foreign companies operate in Kenya so as to access the large eastern and central African market.
He noted that Kenya's main economic challenge is to boost its real Gross Domestic Product (GDP) growth rate.
"Sustained economic growth is key, if Kenya is to address its high unemployment rate as well as widespread poverty," he said.
"However, this will have to be accompanied by improved economic governance and greater economic reform," the EU official said. According to EU, Kenya's FDI remains relatively low when compared to its GDP.
"There is clearly potential for more and an increase in capital injection into the economy is a powerful mechanism for job creation," he said, noting that corruption and insecurity continue to pose significant challenges to business.
"The problems exist particularly in land purchases and large government contracts," he said. Briet said that the intention of Kenya and the EU is to move beyond donor-recipient relationships and towards long term cooperation.
"We will pursue jointly identified, mutual interests based on principles of ownership, partnership and solidarity," he said. According to the EU official, the on going negotiations on an EPA with the Kenya will soon be concluded.
"We have already successfully concluded negotiations with the Caribbean, pacific and west African nations," he said.