Sensing betrayal, Kenya goes solo in search of trade deals

KQ cargo plane at the Moi International Airport Mombasa (PHOTO: Omondi Onyango)

Kenya has given the strongest hint that it will be a lone-ranger in the hunt for export deals, citing frustrations on the joint approach with its East African Community (EAC) partners.

Speaking to editors and journalists yesterday, Industrialisation, Trade and Enterprise Development Cabinet Secretary Betty Maina said Kenya had learnt sobering lessons about the regional approach.

She was speaking in Nairobi yesterday, where she briefed editors and journalists on the economic partnership agreement that Kenya signed with the United Kingdom, even as the latter prepares to officially exit the European Union on December 31.

This bilateral deal, which was signed on December 8, was done outside of the EAC framework, with the cabinet secretary saying other partner states had been briefed.

Kenya is also working on a bilateral deal with the United States, another move that has drawn the ire of other EAC member states. The government says the trade deal is at an advanced stage.

Ms Maina said Kenya drew important lessons from the EAC-EU Economic Partnership Agreement, whose ratification had been frustrated by its partner states, including Tanzania.

“Given that history that we have had, trying to work on a regional approach can leave you kwa mataa... You can be left hanging and you are the one that is exposed,” said Maina on Kenya’s delicate position in the regional approach, where other EAC countries classified as least developed countries (LDCs) had the luxury of dragging their feet.

As LDCs, Uganda, Tanzania (which has since joined Kenya as a developing country), Rwanda and Burundi, could still have unfettered access of the EU’s market or that of any other rich country under the everything-but-arms agreement.

Kenya, however, did not have this privilege, but would enjoy such preferential treatment if EAC ratified the EPAs. However, other EAC peers have refused to sign and ratify the agreement, with Kenya at some point reading malice on the part of its peers.

Although all the EAC partner states use the initial EAC-EU-EPA as a roadmap for the current negotiations with the UK, the CS said some members preferred the transition period to be extended to December 2021 to allow for more consultations before the trade talks begin.

“Other partner states indicated that their impending national elections remained a priority,” she said. Uganda will be having elections mid-January, next year.

Because the other countries are classified as LDCs, they can still enjoy preferential terms with the post-Brexit UK, unlike Kenya, which had to either renegotiate or have its exports slapped with higher tariff.

“In view of this, our EAC partner states did not have hard decisions to make in light of the critical timelines and impending trade disruptions post-Brexit.

Kenya exports mainly tea, horticulture and coffee to the UK, with data showing Britain had imported goods worth Sh34.9 billion from Kenya.

Through robust marketing, Kenya expects to grow its exports to the UK by five per cent in the first year.

Kenya’s imports from the UK are valued at Sh18.9 billion.

Trade Principal Secretary John Weru, who is also the chief negotiator, said Kenya had to seize the opportunity to negotiate a new deal since its economy was basically driven by exports and services.

“And that is why it is very critical for the government to secure any threat that will be slapped on the reach to our market,” said Mr Weru.

He noted that although Kenya had two weeks for Parliament to ratify the deal, it still had a 90-day window.

Weru added that unlike some initial agreement that was against the World Trade Organisation (WTO) agreement, they had made sure this one was WTO-compliant.

There is also a list of highly sensitive products, mainly agricultural products that the government found the need to protect.

Weru appealed to farmers to change the style of production to take advantage of the new deal. “It is not a question of numbers, it is a question of income that you get.”

Earlier, Kenya’s High Commissioner to the UK Manoah Esipisu said the new partnership served as the framework that defines the trade arrangement between the two countries post-Brexit.

“The two governments are of the need to maintain the momentum that is needed for ratification of the agreement, and we are confident that will be concluded by December 31 to ensure seamless and uninterrupted trade flows between the two nations,” explained Mr Esipisu.

“Should parliamentary processes take long, guaranteed interim transition mechanisms will kick in?”

Esipisu said Kenya and the UK signed an agreement to deliver security and certainty to importers and exporters.