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Kenya to open 82.6% of trade value to U.K over 25 years

Kenya to open 82.6% of trade value to U.K over 25 years

The Kenyan government is defending the proposed economic partnership agreement between Kenya and the United Kingdom where it is expected to open 82.6 percent value of trade to the region over a 25 year period.

In a memorandum to parliament, the Ministry of Industrialization, Trade and Enterprise Development revealed the deal which will allow to exporting goods to Kenya. They will include raw materials, capital goods, intermediate products among others excluding agricultural and industrial products at the expiry of a seven-year moratorium.

On December 31 last year, Britain officially left the European Union (EU), paving the way for negotiation and renegotiation of trade agreement between Britain and its allies.

It is against this backdrop that the economic partnership agreement (EPA) between the two was crafted, with negotiations having begun in October until November 2020.

The talks culminated in the signing of the UK-Kenya EPA on December 8, preserving duty and quota-free access for Kenyan exports to Britain.

In a memorandum to parliament, industrialization, Cabinet Secretary, Betty Maina said Nairobi stands to benefit from untapped UK market potential estimated at Ksh.22.5 trillion against Kenya’s current level of exports which stands at 0.2 percent of the UK market size.

Currently, the UK ranks as Kenya’s second biggest export market in the EU after the Netherlands, with exports averaging Ksh.39 billion between 2015 and 2019.

Kenya will open 82.6 percent of its trade with the united kingdom, constituting raw materials, capital goods, intermediate goods and all other essential goods for a period of 25 years, with a 7 year grace period. 

Agricultural and industrial products will however be excluded in a bid to protect Kenya’s infant industries.

Further, the goods from both parties shall receive similar treatment no less favorable than domestic goods in respect of all laws.

However, neither Kenya nor the UK will be allowed to apply internal quantitative regulations so as to afford protection of their respective production.

While critics of the deal say it will give an upper hand to Britain, CS Maina told parliament that the agreement will provide remedies to safeguard against unfair trade practices which could lead to market distortion.

This includes unforeseen influx of UK imports into the Kenyan market.

She further said the EPA contains an amendment clause that provides flexibility to the parties to seek amendment on any provision including tariff liberalization schedules. Further, there will be mandatory review of the entire agreement every 5 years.

The UK-Kenya EPA was tabled in parliament on December 22, for ratification. With both parliaments required to ratify the agreement in order for it to take effect.

Britain’s upper house of parliament, the House of Lords has since backed a proposal by its international agreements committee for a 21-day extension of the initial February 10 ratification deadline.

This as Kenya’s parliament prepares to deliberate on the trade deal to pave the way for its formal ratification.

Once the agreement is ratified, Kenya stands to benefit through market access to the UK for all products including manufactured and processed goods.

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