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Friday, 19 July 2013

Kenya: Delays in EU trade agreements hurt flower production

Flower output has stagnated in the past four years as producers grow anxious over a weakened global economy and failure to conclude talks on trade pacts with Europe and East Africa started six years ago, the Kenya Flower Council is reported to have declared at the end of June.
The group said that production of flowers had flattened since 2010 - it has registered less than two per cent growth compared with 10 per cent in the 1990s - , hurting the prospects of an industry that remains one of Kenya’s leading foreign exchange earners. The industry stands at a level of annual exports of around 120,000 tonnes.
The growers said that the inconclusive trade talks – especially the Economic Partnership Agreements (EPAs) with Europe -  have affected planning with most of them cutting back on investments.
The five East African Community (EAC) member states signed an interim regional EPA with Europe in 2007 to guarantee duty and quota-free access to EU market, and are currently negotiating for a comprehensive one. The interim agreement has not been signed or ratified. The preferential EU market access terms that Kenya currently enjoys could be lost if the full EPAs will not have been signed by January 2014.

Should Kenya miss out on the EPAs, its trade with Europe would revert to the less generous terms under the General System of Preference where some of its products which it has been exporting to the market at zero duty attracting charges between 8.5 and 15.7 per cent. Kenya would not benefit of the “Everything But Arms initiative”, dedicated to Least Developed Countries (LDCs).