We wish to raise our voices to the European Union and government negotiators that:

  1. We are deeply concerned about the asymmetrical nature of the EPA negotiations thus far. Studies show that EAC’s  51.3% of tariff lines/products where there is current local production will be put at risk, perhaps even damaged (1,100 tariff lines out of 2,144) as these are lines where liberalization will take place and the EU is more competitive on these lines than the EAC. Taking into account potential future production (tariff lines where there is no current production), 2,366 tariff lines will be liberalized making the possibility of having future production in these products questionable. In total, 68.8% of all tariff lines or products could be put at risk (current and future production).
  2. We further express concern with regard to the delays in agreeing the European Partnership Agreement (EPA) between the European Union and the East Africa Community (EAC). In particular, we wish to alert you to the potentially severe impact on the lives of 500,000 people dependent on the Kenyan floriculture business. Fair-trade and Kenya flower council works with large numbers of cut flower producers in Kenya, who largely supply European retailers. More than 33 out of 61 Fairtrade certified cut flower producers are Kenyan. Together, they employ over 32,000 workers. Country wide, the Kenyan Flower Council have estimated that over 500,000 people including 90,000 direct flower farm employees depend on the floriculture industry for their livelihoods. It is the second largest agricultural foreign exchange for Kenya valued at more than $250 million a year.
  3. Small-scale farmers and producers are alarmed by the agricultural subsidies provided in the EU; and the weak safeguards provided for in the EPAs. The EU has rejected the discussion of its subsidies in the EPAs on the grounds that this is a WTO issue. However, we argue that the issue of subsidies has not been addressed in the WTO as  developed countries, including the EU have failed to live up to what was agreed on during the WTO Hong Kong Ministerial to eliminate export and trade distorting subsidies by 2013.
  4. We further note that the programme is the most expensive scheme accounting for more than 40% of its annual budget and one of the most controversial. In 2013 the budget for direct farm payments (subsidies) and rural development-the twin “pillars” of Comprehensive Agricultural Policy–is 57.5 Billion Euros (Euros 49bn), out of a total budget of 132.8 billion euros (that is 43% of the total). Most of the CAP budget is direct payments to farmers.
  5. There is ample evidence to show that agricultural subsidies in the EU have led to dumping of agricultural products with far reaching implication on Africa’s agricultural production and agro-processing.EU is spending way too much on subsidies when agriculture creates just 1.6% of EU GDP and employs only 5% of EU populations
  6. We note that EAC having been in these negotiations since 2007, the European Union’s rigid and unilateral deadline to Conclude EPAs is not a desirable way in achieving the desired results. The conclusion of any Free Trade Agreement like EPA must take into account the interests and address the concerns of both parties, and not through timeframes. Therefore, we urge the EU to show necessary flexibility in the negotiations process, respecting the different levels of development of each EAC country.
  7. We urge the EAC negotiators should therefore continue pushing for an extension of the Regulation 1528/2007 to such a period where the negotiations have been concluded or an alternative trade arrangement has been initiated. It should be appreciated that the difficult to conclude these talks are not only on the shoulders of EAC countries, but also due to rigidity on the side of the EU.
  8. We emphasize that trade policy instruments such as export taxes are an integral part of East African industrialization since they promote value addition, protects infant industries and improves agricultural productivity. We further note that export taxes remain very critical after the discovery of oil, natural gas and other minerals. In fact, Kenya’s accession agreement to WTO does not prohibit it from imposing export taxes. We therefore seek an agreement that protects the livelihoods of millions of smallholder farmers and producers in the EAC region.
  9. Civil society organizations, workers and Smallholder farmers argue that negotiators and the private sector have focused extensively on commercial interests without focusing on major aspects of labor, standards, human rights, environment and climate change as well as development as it was initially envisaged by the Cotonou Partnerships Agreement. The cost of signing EPA is much higher than the benefits. Kenya stands to lose USD 193.2 million and gain just about USD 87.1 million upon signing an EPA.
  10. We therefore call upon the international trading partners to extend duty free quota free treatment to Least Developed Countries and non-Least Developed countries in Africa. If this is enacted, a country like Kenya which is in a least developed region will have the same trade regime with her Least Developed Counterparts of Burundi, Rwanda, Uganda and Tanzania.
  11. We note with concern that the tariffs that will be imposed will increase the price of cut flowers considerably. This extra cost must either be borne by producers themselves, or by European traders and major retailers. The imposition of tariffs therefore poses a high risk of trade moving away from Kenyan sourcing into countries which are retaining preferential market access into the EU, such as Ethiopia as a Least Developed Country. The imposition of tariffs is an unacceptable price for Fairtrade farmers and workers to bear. Fairtrade works to alleviate poverty through establishing fair trading relationships between European businesses and Kenyan producers. Through this relationship flower workers and their communities have seen improved healthcare, income, education, and reduced poverty. We now fear that the work of many years will be undermined.
  12. We therefore ask the EU to extend the current tariff regime beyond 1 October 2014, to allow negotiations to be successfully concluded. Should agreement not be reached, we ask you to ensure that the moves to approve the Commission Regulation granting GSP preferences to Kenya are successfully concluded in time for 1 October 2014. We urge the European Commission to act with the utmost responsibility and awareness of the impact their decisions will have on the lives of hundreds of thousands of workers in Kenya’s floriculture industry, and with due regard to its high level commitments to poverty reduction”
  13. We retaliate that the 1st October deadline should not be a basis upon which the talks should be based on but on how to conclude the talks. In order to have a “win-win” outcome of negotiations, then the EU must be willing to support the development pillar that addresses supply side constraints. In addition, Special and differential treatment has to be part and parcel of the developmental EPA. We therefore urge the EU to extend the waiver with tariff preferences for Kenyan horticultural produce including flowers, beyond 1st October until the outstanding issues between the EU and EAC are finalized.