It is certainly a sigh of relief for the flower industry and other exporters to the EU following a successful completion of the East African Community and European Union Economic Partnership Agreement (EAC - EU EPA) Negotiations. This comes after the two parties finally reached an agreement yesterday following a joint Technical and Senior Officials meetings that took place on 13th and 14th October 2014, in Brussels Belgium. Kenya flower industry was indeed in a crippling crisis.
Having resolved the contentious issues on export taxes, subsidies and good governance, both Parties initialed the text; paving way for amendment of the EU Market Access Regulation (MAR) 1528/2007, to include Kenya for duty-free, quota free status for all its exports to the EU market. This process is expected to take 2 to 6 Months.
In the interim, Kenya will continue to export under the GSP regime until the reinstatement process is over. The Kenyan flower exporters started using the ‘GSP form A’ which is an outright requirement for imports from Kenya to benefit from EU GSP duties which ranges from 4.5 to 8.5%. For flowers, only carnations are benefiting from a 0% tariff-line. Failure to have the ‘GSP form A’, the imports attracts full Most Favoured Nation (MFN) duties at customs-clearance into the EU. The immediate impact of the GSP tariff on Kenyan exports to the EU is an increase in cost to the EU importers by the margin of the applicable tariff. Exports from Kenya to the EU will suffer import duties of approximately Kshs about 600 million a month under the regime.
The Kenya Flower Council will continue to urge the concerned EU parties to fast track the process and shorten the period during which GSP duties will be applied. In the meantime, both parties will commence the process of ratification and final signatures of the Agreement in their jurisdictions.
The industry acknowledges the Government’s investment and support to the success of the whole process and also in promoting the flower industry abroad. The Ministry of Foreign Affairs and International Trade, through its economic diplomacy portfolio, is aggressively engaged in facilitating promotions in Europe, Eastern Europe, Japan, Asia and the USA which have been very successful.
For this initiative and many others in the pipeline, the industry would like to sincerely thank the Government of Kenya, under the leadership of HE the President of Kenya Hon. Uhuru Kenyatta CGH, along with the Deputy President HE William Ruto. We cannot forget the efforts made by our local and international partners who have worked relentlessly to push for the finalization of EPA. Finally, we acknowledge the support, patience and confidence of the Kenyan exporters as well their array of business associates far and wide.