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Kenya's trade deal with UK now in force

BUSINESS
By Brenda Kerubo | March 23rd 2021
Trade and Enterprise Development CS Betty Maina (second right) with UK’s International Trade Minister Ranil Jayawardena during the signing of the Kenya-UK trade deal in London. [Courtesy]

The contentious trade deal between Kenya and the United Kingdom (UK) is legally in force after a year of negotiations and parliamentary approval by both countries.

The agreement became operational yesterday after top officials from the two countries signed and exchanged instruments of ratification.

This means firms exporting to the UK will now benefit from duty-free, quota-free access following the United Kingdom’s transition period with the European Union on January 1, 2021.

“The Kenya-UK Economic Partnership Agreement allows Kenya access to the UK market free of duty and quota restrictions and we are glad to know it is a contractual agreement,” said Industrialisation, Trade and Enterprise Development Cabinet Secretary Betty Maina.

CS Maina and UK Prime Minister’s Trade Envoy to Kenya Theo Clarke signed and exchanged the instruments ratifying the agreement.

The pact allows for a phased and gradual liberalisation of the tariffs on some imports from the UK. It is not a sweeter deal but is the same as the one signed and ratified by the European Union and Kenya in 2016. The UK deal gives a phased liberalisation for some goods for more than 25 years.

Some tariffs start to reduce after seven years. Some will not be effective until 12 years and will continue reducing slowly until 2046.

“At least 1,900 tariff lines will never be liberalised. That includes milk for us, something we are very excited about,” said Maina.

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“I understand that the flower industry alone employs 200,000 Kenyans directly, and the wider horticulture industry many more.

With UK tariffs of eight per cent on flowers and 12 per cent on vegetables such as fresh beans, without this agreement, those key exports from Kenya would immediately be priced much higher in the marketplace,” said Clarke.

“When you consider that many of Kenya’s exports of fresh beans are grown by smallholder farmers, then you see how important the agreement is to both large businesses and small producers,” he said.

More than 1,400 UK exports are excluded from liberalisation. Some of these are wines and spirits, textiles and clothing, footwear and ceramic products.

Ministry of Trade data shows the EPAs agreement could boost annual export earnings to more than Sh2 trillion if effectively realised.

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