Hapa Kenya | 13 March 2021
Kenya Flower Council pushes for approval of the Kenya-UK trade deal to guarantee export of flowers to the UK
By Grace Matheka
Kenya Flower Council (KFC) has expressed its support for the immediate approval of the Kenya-UK trade deal signed on December 8 2020. Kenya’s exports of cut flowers to the United Kingdom could undergo additional tariffs by the end of this year if the Economic Partnership Agreement (EPA) is not approved.
The Kenya-UK trade deal provides Kenyan businesses duty free access to the UK market. Kenya will start phasing out duty and quota barriers on a set number of UK products 12 years after the EPA has been implemented.
The trade agreement ensures that all cut flowers and ornamentals companies in Kenya, can continue to benefit from quota and duty-free access to the UK market. Cut flowers are now Kenya’s second largest export after tea, contributing about 1.06% of the country’s GDP. The industry is also one of the country’s leading employers with over 200,000 people working directly in the flower industry and an estimated two million indirectly.
According to the Council, Kenya flower exporters will benefit from enhanced privileges for agricultural goods that confers originating status to East Africa Community (EAC) exports.
If the EPA is not brought into effect, tariffs on imports from Kenya would revert to MFN rates. This would lead to the imposition of duties on some of the imports from Kenya and more particularly at 8% rate on cut flowers.
If the Kenya-UK EPA is not concluded, and duties at a level of 8% are applied, then Kenya’s prices will be uncompetitive and will lose market share. In its role within the KEPSA private sector, KFC provided input into the Kenya-UK EPA, with KFC’s Director Richard Fox chairing the Ken-Brexit Private Sector Team.
The UK is currently the largest foreign investor in Kenya, as well as Kenya’s second most important export destination. Trade between the two countries reached Ksh. 44 billion in 2019.
As a result of Brexit, trade between Kenya and the UK could not be regulated through the EU Market Access Regulation mechanism. A new agreement was necessary to come into effect on 1 January 2021, at the end of the UK-EU transition period. Recently, United Kingdom legislators endorsed the trade deal with Kenya after completing review of the document, paving the way for its enforcement once the Kenyan lawmakers approve it.