UK trade deal shields Kenya from unfair competition, CS Maina affirms

Kenya will progressively liberalize 83% of its trade with the United Kingdom over a period of 25 years but with a seven year moratorium.

This means the gradual reduction of duty on UK goods imported into Kenya and East African Community (EAC) will only start seven years after ratification and be progressively reduced over another 13 years.

Trade CS Betty Maina says this will give Kenya ample time to deepen her export development portfolio.

“This is particularly important to protect domestic industries from unfair international competition and to give them time to enhance their global competitiveness,” said CS Maina.

Kenya and the United Kingdom signed the Economic Partnership Agreement in December 2020 paving way for a ratification through national processes by parliaments in both states.

Despite reluctance to join by other EAC members states, Kenya entered into the deal that contains specific provisions for not only protect its interests but those of the EAC market from unfair competition from UK producers.

Finished manufactured goods that account for 2.6% of the trade between Kenya and UK and attract a tariff of 25% will be reduced 12 years after EPA comes into force and gradually reduce over the next 13 years.

“It is instructive that these are finished products that account for just 2.6% of the trade that Kenya and the UK have agreed to liberalize hence the tariff reduction will have minimal impact on the Kenyan economy and any industries producing goods in Kenya will enjoy a 12-year lead time before the start of the gradual liberalization,” she added.

Kenya has however negotiated for the exclusion of sensitive goods that was subject to liberalization including agricultural products like milk, eggs and cereals, as well as industrial products of Kenya’s export interest including textiles and apparels.

This move is expected to balance trade between the two states while supporting Kenya’s local industries.

Kenya is eyeing the trade deal to boost her exports to the UK market which is expected to increase by 5% from the current volume.

In eight months to August 2020, total exports top the UK were valued at Kshs. 34.9 billion while imports were valued at Kshs. 18.9 billion leaving a trade balance of Kshs. 15.9 billion in favour of Kenya.

The exports were mainly coffee, horticulture and tea.


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