Kenyas apparel exports to the EU could become less competitive

Kenya's apparel exports to the EU could become less competitive

Concern is growing in Kenya that its clothing manufacturing industry will no longer benefit from the European Union's 'market access regulation' from 1 October, which has granted its exporters duty-free and quota-free access to the EU market since 2008.

The problem is that Kenya's partners within the Eastern African Community (EAC) are unwilling to ratify an Economic Partnership Agreement (EPA) struck with the EU in 2014.

This was supposed to be in place by now, so that it could replace the market access regulation (MAR) trade benefits from the beginning of October.

But Kenya's EAC partners Burundi, Rwanda, Uganda and Tanzania are in no hurry to ratify, having concerns about the EPA and also – because they are poorer than Kenya – being able to rely on the EU's Everything But Arms (EBA) free trade arrangement, even if the MAR expires.

Kenya, on the other hand, would have to rely on the EU's GSP (generalised scheme of preferences) of lower – rather than no – duties to get its clothing and textiles to EU markets.

Kenya has called on the EU to give it more time, or to ratify the EPA alone, but the European Commission has said no.

A spokesperson for the Commission's directorate general for trade said: "While we acknowledge the progress on signature in some of these regions, it is only through ratification and implementation of the agreement that we will be on solid legal ground."

The Kenya Association of Manufacturers (KAM) is unhappy. In a note to just-style, its textiles executive officer Abel Kamau warned: "The duty free access to the EU market has provided companies exporting from Kenya with a chance to be more competitive as compared to other regions around the world. This could lock out many companies that have previously increased their exports to EU."

He called for EAC members to swiftly ratify the deal, or the EU to have a change of heart and allow Kenya to ratify a bilateral EPA with the EU, and keep its trade benefits.

As reported on just-style last year, the Kenyan government has earmarked the textile, apparel and leather sectors as key drivers of major economic growth under a decade-long plan to transform the country into a newly industrialising middle-income nation.

Textiles and apparel key to Kenya 10-year growth plan

Assessing Africa as an alternative apparel source

With additional reporting by Liz Newmark and Keith Nuthall.