The trade Ministry has generated a list of products that will not be mported into Kenya duty-free from the United Kingdom. This is meant to protect Kenya’s local farmers and agri-processors from unfair competition of cheap food imports.
United Kingdom will not ship in agricultural products such as eggs, milk and cereals into Kenya duty-free. The list further includes textiles and apparels from London. This is as Kenya and UK come towards the end of the Economic Partnership Agreement (EPA) signed last December.
According to Betty Maina, the Trade Cabinet Secretary, quotas will be placed on these products. EPA has provisions meant to protect Kenya and the East African Community market from unfair competition from the UK producers.
Among the sensitive products listed by the Trade Ministry, agricultural products are the ones taking the most percentage. However, these products will retain the same rate as with the EAC-EU trade deal that expired in December 2020.
Kenya will begin phasing out duty and quota barriers on finished products from the UK after 12 years of EPA ratification. On the other hand, tariffs on intermediate goods will begin to be reduced after the seventh year of EPA ratification.
Vehicles, electronics, computers, and alcohol are among the finished goods that the UK exports to Kenya. These goods are subject to 25% tariffs and account for 2.6 percent of trade between the two countries. On those terms, the United Kingdom has also been authorized to sell weapons to Kenya.
“The UK access to the Kenyan and EAC market is subject to a progressive and gradual reduction of duty over a period of 25 years. It’s a process where the full elimination of any of the applicable duties and tariffs we have right now, will only be attained after 25 years.” Betty Maina.
Paper, paper board and newspapers are some of the intermediate goods Kenya imports from UK. Duty and quota barriers will start being phased out in 2028. These goods take 10% of the Kenya-UK trade.
Kenya wants to liberalise a total of 82.6 per cent of its trade with the UK by 2046. It has, however, protected 17.4% the section of its market it considers sensitive and in which the agricultural products fall.
The CS said that as Kenyan and EAC partner state exports gain immediate access to the UK market, free of duties and quota restrictions, UK access to the EAC market will be subject to a 25-year mechanism of incremental and gradual reductions in duties and quota restrictions.
Unfriendly Trade Environment for Kenya
The Trade Ministry however notes that Kenya might fail to benefit from the ongoing Economic Partnership Agreement with the United Kingdom. This will happen if Kenya does not address the current unfriendly trade environment which has led to having locally produced products more expensive than those from the neighboring EAC countries.
The CS acknowledged that some of the Kenyan products, especially agricultural products, have been expensive. And accreditated it to high production costs, or are being exported in their raw form. She claimed that the government is currently working on a framework to increase internal trade and development so that Kenya reaps the greatest benefits between the seven and twelve years that the United Kingdom will be paying tariffs.
“In our view, because trade is a give-and-take situation, we believe that we have sufficient time to make the necessary adjustments for us to be competitive in that field,” she said.
Kenya aspires to win 5% of the UK market in the long run. The agreement is set to go into effect on March 31. This is after ratification by both countries’ parliaments, with the UK parliament having completed the process on February 10.
However, the Kenyan Government is yet to conclude the process. This is after lawmakers deferred a scheduled debate on the report of the Trade, Industry and Cooperatives Committee.