Columbia International Affairs Online: Working Papers

CIAO DATE: 03/2012

The structure and dynamics of cut flower export markets from Kenya and Ethiopia

Brian D. Perry

February 2012

Norwegian Institute of International Affairs

Abstract

This report is part of a broad study of trade preferences and market conditions between various developing countries and Norway, conducted under the auspices of the Norwegian Institute of International Affairs and funded by the Norwegian Ministry of Foreign Affairs. Norway's Generalized System of Preferences (GSP) was established in 1971. From 2002 Norway has provided duty and quota free market access (DQF-MA) for all goods from all the 50 least developed countries (LDCs3). In 2005 the results of a review of Norway’s GSP were published (Melchior, 20054), which showed that agricultural products from developing countries other than LDCs were still subject to substantial tariffs, and this contrasted dramatically with advantages given to European trading partners. As a result, from 1 January 2008 changes were made to Norway’s GSP5. An important adjustment was that 14 low income countries that were not part of the LDC group were included in the provision for duty and quota-free market access (DQFMA). Consequently, 64 low income countries now benefit from DQFMA to Norway for all their goods. However, the broadening of access to a wider set of developing countries has not had the degree of change to imports from developing countries that was anticipated. This project has been examining various aspects of trade between developing countries and Norway to explore conditions promoting or limiting greater trade. One case study has been on the export of cut flowers from eastern Africa, in particular Kenya and Ethiopia, and this report presents an assessment of the structure and dynamics of this market, and the factors influencing its success and sustainability.