EAC, Kenya and EU: Economic Partnership Agreement with a specific focus on sustainable development

On 8 December 2023, Eu Commission published the draft of the “Economic Partnership Agreement between the European Union, of the one part, and the Republic of Kenya, Member of the East African Community, of the other part” by means of the interinstitutional Files 2023/0337 (NLE) and 2023/0338 (NLE). This agreement will cover the following topics:

(a) general provisions;

(b) trade in goods;

(d) agriculture;

(e) economic and development cooperation;

(f) institutional provisions;

(g) dispute avoidance and settlement;

(h) general exceptions;

(i) general and final provisions; and

(j) Annexes, Protocols and Joint Statements.

Before going deeper with the short check of the available documents, it is useful to recall what explained by the EU “ … The Economic Partnership Agreement (EPA) between the EU and Kenya was explicitly integrated as a key deliverable of the EU-Kenya Strategic dialogue, launched in June 2021, and it is a crucial component of our Africa engagement strategy. It represents a significant development, considering Kenya’s economic and political importance in the East African region.

The EU-Kenya EPA aims at implementing the provisions the EU-East African Community (EAC) EPA that was concluded in 2014 and will be open for other EAC countries to join. Bilateral implementation is based on a decision of the East African Community from 2021 to let individual go ahead under the principle of “variable geometry”. The application of the regional agreement with the EAC is blocked since 2016, when Kenya, Rwanda and the EU Member States signed the agreement but not the other EAC partner states. The EU-Kenya Agreement will remain open to accession of the EAC Partner States…”

The EPA aims, in terms of sustainable development and fight to the climate change/climate crisis, to:

contribute to economic growth and development through the establishment of a strengthened and strategic trade and development partnership consistent with the objective of sustainable development. In particular, the EU and Kenya undertake to promote negotiations in the fields of: trade, environment and sustainable development;
establish and implement an effective, predictable and transparent regulatory framework for trade and investment in the EAC Partner State(s), thus supporting the conditions for increasing investment and private sector initiatives;
strengthen the existing relations between the Parties on the basis of solidarity and mutual interest. To this end, consistent with their WTO rights and obligations, this Agreement shall enhance commercial and economic relations, support a new trading dynamic between the Parties by means of the progressive, asymmetrical liberalisation of trade between them and reinforce, broaden and deepen cooperation in all areas relevant to trade and investment.

The two fields which are impacted by the sustainable development goals are: fisheries and agricolture. In particular, for what is concerning the agricalture, it is interesting to underline the following definitions:

“sustainable agriculture technology” means technology designed with special consideration of its environmental, social and economic impacts;
“food and nutrition security” means that all people at all times have both physical and economic access to safe, sufficient and nutritious food to meet their needs for a productive and healthy life;
“livelihood security” means adequate and sustainable access to income and resources to meet basic needs in an equitable manner (including adequate access to food, potable water, health facilities, educational opportunities, housing and time for community participation and social integration);
“small-scale farmers” means producers with limited resources and own small land holdings of less than two (2) hectares and whose scale of operations is too small to attract the provision of services needed to significantly increase productivity and leverage market opportunities;
“sustainable development” in the context of this Part includes the management and protection of the natural resource base for economic and social development in such a manner as to aim at meeting human needs for present and future generations. This definition, in particular, is alligned to the promotion of the sustainable use and management of natural and cultural resources, by developing environmentally friendly and sustainable technologies that improve agricultural productivity. At this regard, the article n.63 lays down that: “…The Parties shall cooperate to achieve sustainable agricultural development with a special focus on supporting vulnerable rural populations in the EAC Partner State(s) in light of the changing world production and trade patterns as well as consumer tastes and preferences…” and article n.64 provides that: “… The Parties agree that the provisions of this Agreement shall enable the EAC Partner State(s) to implement effective measures to achieve food and nutrition security and sustainable agricultural development, and to develop commercial agricultural markets in the region to ensure food and nutrition security. 2. The Parties shall ensure that actions taken under this Part aim at enhancing food and nutrition security, and avoid the adoption of measures that could endanger achievement of food and nutrition security at the household, national and regional levels…”. Indeed, it is agreed that sustainable development encompasses economic development, social development and environmental protection, all three being interdependent and mutually reinforcing and needs the development of international trade and investment in a way that contributes to the objective of sustainable development. Moreover, the approach based on sustaibale development is based on the recognition of the climate change, as outlined by the Intergovernmental Panel on Climate Change (IPCC) in its special report entitled “Global Warming of 1.5°C”, as a contribution to the economic, social and environmental objectives of sustainable development.
as a response of the international community to global or regional environmental challenges and stress the need to enhance mutual supportiveness between trade and environment policies, rules and measures, the contracting parties recognise: UN Environment Assembly (UNEA) of the UN Environment Programme (UNEP), as well as multilateral environmental agreements (MEAs).

From a fiscal point of view, the EPA provides that: the customs duties applicable to products originating in the EU and imported into the territory of the EAC Partner State(s) for goods listed and eligible will be eliminated upon the entry into force of above mentioned FTA.

Finally, in a nutshell, find below the following points:

about the rules of origin it is writter that: “…The EPA Council established under Article 104 (hereinafter referred to as “the EPA Council”) shall, by decision, adopt a protocol governing the rules of origin at the latest five (5) years after the date of entry into force of this Agreement…”;
in order to the customs valuation: “…Article VII of GATT 1994 and the Agreement on the implementation of Article VII of GATT 1994 shall govern customs valuation rules applied to trade between the Parties. 2. The Parties shall cooperate with a view to reaching a common approach to issues relating to customs valuation…”;
finally, for what it is concerning the customs classification “…The classification of goods in trade covered by this Agreement shall be that set out in each Party’s respective tariff nomenclature in conformity with the International Convention on the Harmonised Commodity Description and Coding System (HS). 2. The Parties shall exchange all necessary information, within a period of three (3) months after a tariff modification or a change in the HS, on their applied customs duties and the corresponding nomenclatures with those products listed in Annexes I and II…”.

We’ll update you about the next developments of the documents here, briefly checked.