The horticulture sector stands to lose about Sh4 billion monthly if a key trade deal with the European Union is not signed by October 1. Regional countries that make up the East African Community (EAC) are supposed to sign the Economic Partnership Agreement (EPA) jointly. The agreement gives the region’s products duty-free export access to European markets. For the EPAs to be valid, the entire region needed to agree to them, but special concessions would remain in place for least developing countries.
Kenya, therefore, stands to lose the most if export subsidies are withdrawn. However, Tanzania and Uganda have been dragging their feet in reaching the deal.
Kenya Flower Council (KFC) Chairman Richard Fox said failure by Kenya to sign the EPA will subject it to export duty of between 8 per cent and 12 per cent, which will amount to 3 million pounds per month (Sh4 billion).
Kenya is the only country in the EAC considered a developing country, while its neighbours are still ranked as least developed countries (LDC), thus allowing them duty free market access. The LDC countries are not required to sign EPAs since their preferences will continue under the Everything But Arms (EBA) scheme.