East African states agree duty-free trade deal with EU

NAIROBI (Reuters) – Five east African nations have reached a deal with the European Union to renew a duty-free export regime for fresh fruit, vegetables and flowers they sell to the 28-nation bloc, representatives from both sides said on Wednesday.

The deal, which is expected to take effect early next year, came after earlier negotiations failed to meet a Sept. 30 deadline, which means the five countries' horticulture exports have been subject to EU customs duty since Oct. 1.

A representative from the EU's delegation in Kenya said the Economic Partnership Agreements, signed in Brussels on Tuesday, must still be ratified by the five members of the East African Community – Kenya, Tanzania, Uganda, Rwanda and Burundi – and by theEuropean Parliament.

The five countries' horticulture exports will again be exempted from EU customs duty once the new deal comes into force. African officials have warned that failure to strike a deal would have hit their hard currency earnings and thrown farmers out of business.

Some activists in Europe had argued the availability of more African products would hurt the EU's own farming sector.

Kenya, by far the leading exporter of horticulture products in the region, is especially vulnerable to the imposition of customs duty and its shilling currency has come under some pressure due to fears of shrinking inflows of hard currency.

Horticulture – the cultivation of fruit, vegetables, flowers and nuts – is a leading source of foreign exchange for Kenya alongside tea exports and tourism, and agriculture accounts for about a quarter of Kenya's gross domestic product.

"The successful conclusion of the negotiations will enable Kenya to continue enjoying duty free… access to the European market," Kenyan's ministry of foreign affairs said in a statement.

The ministry did not provide more details about the deal or about losses to be incurred by the sector due to the temporary levying of customs duty. It said a formal announcement of the deal was planned for Thursday in the capital Nairobi.