The Star (Nairobi)

10 July 2014

Kenya: Flower Industry Worried By Delay in EOA Deal

The horticulture industry is concerned that flower exports to the European Union face high import duties from October 1 unless Kenya signs the Economic Partnership Agreements.

Players fear that the more than 120,000 tonnes of fresh cut flowers exported to EU from Kenya every year could face taxes of between eight and 12 per cent if the EPAs are not signed and ratified in three months time.

Speaking during a Kenya Flower Council (KFC) and European Floriculture Forum meeting held at a Nakuru Hotel on Tuesday, KFC chief executive officer Jane Ngige said unless an agreement was arrived at in talks slated for later this month, Kenya's horticulture exports will attract the taxes from October.

She said that East Africa Community and EU negotiators had in March this year disagreed on how to levy export taxes on goods destined for Europe and on a clause that seeks to bar the East Africa nations from entering into bilateral talks with trade partners in areas where the EU does not enjoy preferential treatment.

"The government needs to speedily resolve outstanding issues on the EPAs so as to evade imposition of significant import duties on our floriculture imports and to safeguard our competitiveness in the EU market," she said.

EU trade and communication officer Christophe De Vroey told the meeting that even if the EAC and EU negotiators reached an agreement by July 23, it was unlikely that they would meet the October 1 deadline as the process of ratification in all the individual member states parliaments was expected to be long and time consuming.

"This means that as from October, all flower, vegetable and fruit exports will have to pay the tax. Coffee and tea will however be exempted," he said.

He said that the annual worth of cut flower exports from Kenya to the EU stands at about Sh46.3 billion which accounts for 1.6 per cent of national GDP while vegetables exports were worth more than Sh26.5 billion annually.

Nakuru governor Kinuthia Mbugua said the county would be hard hit if the EPAs were not ratified noting that more than 70 per cent of the country's flower exports were from there.

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