Kenya and the United Kingdom on Tuesday formally signed a trade agreement ending an era of doing business through protocols of the European Union, from which London will be exiting by the end of December.
Trade Cabinet Secretary Betty Maina, who is in London, and UK’s Trade Minister Ranil Jayawardena, signed the document that had been initialled on November 3 bringing an end to the negotiations that had lasted four months.
The trade deal will enable Kenyan exporters of flowers and other fresh vegetables will continue accessing the UK market under a duty free, quota-free arrangement, just the way they did when the UK was in the European Union.
By negotiating this deal, Kenya was killing two birds with one stone. The UK preferred negotiating with the entire EAC member states to secure a wider market. But other EAC member states preferred negotiations to begin in 2021 after elections in Tanzania and Uganda.
Burundi and South Sudan did not even show up at meetings. But only Kenya could be punished if there was no deal by January, because it is the only one categorized as a Lower Middle Income Economy (Tanzania joined this year but will not be formally declared one until after three years) and would be subjected to taxation in UK markets.
As a compromise, UK and Kenya agreed on some geometric asymmetry, which allows ready partners to negotiate while leaving room for others to join later.
“Kenya adopted this (bilateral) approach because of the Brexit transition period’s fast-approaching deadline and the need to secure duty-free and quota-free market access to the UK,” explained CS Betty Maina last week ahead of the signing ceremony.
“The experience of the EAC-EPA amplifies this position; it has not come into force due to reluctance by the other EAC Partner States to sign and ratify,” she explained, referring to the common economic partnership agreement negotiated under the European Union, and which failed to take off after Tanzania especially recoiled on a clause about opening up its market for EU imports in exchange for duty-free exports into EU.
While Kenya went bilateral, officials in Nairobi argued that the EAC Customs Union Protocol has provisions allowing members to negotiate a trade deal with an outside entity as long as it does not violate the protocol.
The agreement has been titled: “The Economic Partnership Agreement between Kenya, a Member of the East African Community, of the one part and the United Kingdom of Great Britain and Northern Ireland, of the other part.”
The agreement provides for Kenya’s duty-free, quota-free access to the UK market on specified products. Officials say the list of goods could expand to include textile and livestock and fish and other processed goods; adding to the fresh vegetables, coffee, tea and cut flowers. The deal has also simplified Rules of Origin, making it easier for Kenya to export to UK processed items whose raw materials may have been sourced from other developing countries as long as there is proof the items were produced in Kenya.
The Previous Cotonou agreement was criticised for failing to improve local industrial growth and Kenyan officials say the deal with UK improves on that by allowing exports of products made locally from materials sourced outside of Kenya.
There are provisions on common standardisation of produce as well as provisions for UK agencies to support local start-ups.
The deal can be reviewed in totality every five years and a member state can pull out with a year’s notice.