An ad in the September 22 Nation newspaper has a statement by the European Union addressed to exporters from the East African Community on changes to the tariff regime starting on October 1 owing to the failure of the two sides to sign an Economic Partnership Agreement (EPA)
There was also an article in the same paper showing that a draft has been agreed to, and that a final EPA may be signed and effected in time, but others say it is too late for this.
The new rates, while still subsidized compared to what other nation suppliers pay to export to the EU, are still a blow considering that some exports will no longer be duty-free.
While some like tea, coffee beans & carnations will remain duty-free, Kenyan exporters will pay subsidized rates of 4.5% on tilapia exports (compared to a normal EU rate of 8%), 2.5% for roast coffee (not 7.5%), 10.9% for mixed vegetables (not 14.4%), and 5% for roses and cut flowers (not 8.5%) between November and May – which includes the crucial Valentine’s Day period when some flower farms can earn half their revenue.
This caps what has been a tough year for Kenya’s exports of tourism, tea and coffee which have all been adversely affected, and now this. The recently released Economic Survey 2014 showed total exports declined by 3% from Kshs 518 billion in 2012 to Kshs 502 billion in 2013 (as per the Devolution Cabinet Secretary).
Kenya will qualify for the preferential (GSP) tariffs, while Rwanda, Burundi, Uganda and Tanzania are currently considered under “least developed countries” and most of their exports to the EU will qualify for a unilateral 0% tariff.