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Policy Brief on Economic Partnership Agreements (EPAs)
European Union has been a key destination market for Kenyan exports. For instance in 2011, Europe Union accounted for 24% of Kenya’s total exports, making this economic block the second destination market for Kenyan products after the EAC.
Kenya has been able to expand its export to the EU over the last 30 years because of the duty free preferential market access under the ACP trade arrangement. As already mentioned above, this arrangement ended on 31st December 2007. Economic Partnership Agreements provide a contractual alternative for ACP countries to secure these trade preferences on a long term basis.
Kenya therefore is negotiating EPAs in order to sustain current market preferences and avoid macroeconomic instability and disruption of economic activities, especially in the agricultural sector, whose growth has relied on EC market. This is the principal reason that made Kenya, along with other EAC countries to initial the Framework Agreement for Establishing the EPA (FEPA) on 17th November 2008.

Kenya has the opportunity to expand market to the European Union for products which the country has comparative advantage and which were not enjoying the duty free
market access into this market. These products include dairy produce, cereals, and products of milling industry, edible vegetables, and meat among others. Annex 1 of this brief gives the tariff rate which these products were attracting under the Cotonou trade regime and which they are attracting under the EPA.
These products have potential of revolutionizing development in Kenya through investments targeting production of these products, for eventual export into the EU market.
As can be seen from the table below, Kenya has capacity for production and export of these products, which the country is now able to export since 2008 as a result of the removal of high tariff through the EPA process. In case the EPA is not concluded Kenya stands to lose the EU market as a result of tariff hike.
 
 
 
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