Kenyan jobs at stake as EU trade deal expires

The pact between Kenya and the E.U. (previously the European Economic Community), which had lasted for over 30 years before expiring on October 1, saw exports from Kenya to Europe exempted from custom duties.

In a Friday statement, Betty Maina, CEO of Kenya’s Manufacturers Association, warned that many Kenyans were set to suffer as a result of the expiry of the trade deal.

“Kenyan products to the E.U. will begin to attract General System of Preference (GSP) tariff rates,” Maina said in her statement, which was sent to media outlets.

“Products to the E.U. market will start attracting export duty of between 4 percent and 24 percent. Don’t hold your breath – competitiveness of local products to the E.U. market is at risk,” she asserted.

“A total of 67 percent of the exports to Europe from Kenya are affected. Kenya is in danger of letting an opportunity of €24.7 billion – which was revenue from the European market – slip through our hands,” she added.

Maina noted that Kenyan exports to Europe would now be subject to some $78.3 million in customs duties.

“Thousands of jobs are under threat, mainly in the horticulture and floriculture industry. Leading exporters of processed vegetables and fruits will have to radically reduce operations,” she warned.

Maina went on to point out that other members of the East African Community (EAC) would not be affected by the agreement’s expiry, as they remain classified as “least developed countries.”

This is not the case for Kenya, however, which is considered a “developing” country.

Kenya mainly exports flowers to the E.U. But Maina dismissed claims that only the local flower industry would be affected by the change.

“This may appear to be an issue that solely concerns cut flowers, but 24 percent of all our [entire] exports are at stake because they are destined for E.U. markets,” she said.

“Ninety-five percent of Kenya’s horticultural exports go to the same market. Cut flowers will be subject to tariffs of 8.5 percent, fish will attract 6 percent import tariffs, and fruit juices will cost 11.7 percent more for European clients,” she added.

Maina called on the government to step in to prevent major job losses, saying the affected industries employed over 2 million people.

“There is need for the government to work with EAC partners to expedite the conclusion of the Economic Partnership Agreement as soon as possible, hopefully in October,” she said.

“The Kenyan government is called upon to provide the necessary cushions to safeguard continued market openings,” she added.

Source: http://www.newstimeafrica.com/archives/35709