- Category: News and Highlights
KIPPRA in collaboration with Ministry of Foreign Affairs and International Trade and Ministry of Planning and Devolution held a ten day retreat (January 13-20, 2014) with the objective of examining the likely implications for Kenya signing the Economic Partnership Agreements with the European Union.
The EPAs are likely to have both positive and negative economic effects on Kenya. For the EPAs to be of strategic interest to Kenya, the gains must outweigh the costs and this can only be verified empirically. Kenya initialed an interim EPA agreement with the EU under the EAC framework. A complete EPA agreement is being negotiated and is expected to be signed by 1st October, 2014.
The results of the study indicate that there will be marginal loss of tariff revenue under full liberalization as well as under liberalization with exclusion of sensitive products. In both scenarios, imports from the EU will increase marginally leading to welfare gains for Kenyan consumers due to reduction in imports prices. The study has also revealed that trade creation is likely to outweigh trade diversion implying overall welfare gains for the Kenyan economy.