Industrialization, Trade, and Enterprise Development Cabinet Secretary Betty Maina has assured local manufacturers and producers of various goods that the post-Brexit trade deal Kenya signed with the United Kingdom will not open the floodgate for cheap and subsidized goods.
On Monday, CS Maina said the post-Brexit Continuity Trade Agreement which was signed on 8th December 2020 between Kenya and the UK adheres to the fidelity of the EAC Customs Union Protocol and provides room for accession by the willing EAC Partner States as Kenya backs the deal to ensure a 5% increase in exports within the first year of implementation.
“We have taken good care of this by having a list of sensitive products on both sides, which on the part of Kenya include the same list as is in the EAC-EU-EPA,” said CS Maina.
While Kenya’s export base is dominated by agricultural produce, imports from the UK include machinery, motor vehicles, pharmaceuticals, printed books, and other paper products, and electrical and electronic equipment.
However, with the EAC-EU-Economic Partnership Agreement still dragging and yet to be implemented, the trade ministry expects other member countries to join the agreement and access the UK market on duty-free quota-free terms after 1st January 2021 when Brexit is concluded given their status as Least Developed Countries (LDCs)
“As such, the countries by virtue of their development status can continue trading with the UK under Everything-But-Arms (EBA) arrangements,” added CS Maina.
She went on, “We have provided for EAC centric rules of origin, enabling our producers to source raw materials from all over EAC, process them in Kenya, and Export them duty-free and quota-free to the UK.”
Under the EU-EPA, regional economies are expected to gradually open their market to European goods.
In the last five years, exports to the UK have averaged Kshs. 39 billion dominated by flowers, coffee, tea, fruit, vegetables, and textiles as Kenya now targets livestock products, leather, textile and apparel, and honey.
In eight months to August 2020, exports amounted to Kshs. 34.9 billion while imports were valued at Kshs. 18.9 billion.
Kenya targets to increase coffee exports by at least Kshs. 5.2 billion in five years.
The National Assembly is now expected to ratify the trade deal before it comes into force on 1st January 2021.