MPs ratify UK-Kenya trade deal

Trade agreement sets stage for duty-free access to the respective markets

In Summary

•The trade deal, which UK MPs endorsed last Thursday, provides that UK customs duties shall be entirely eliminated on all products.

•Deal envisioned to translate to exports worth Sh1 trillion.

Packaged tea for export at warehouses in Shimanzi, Mombasa. Photo/FILE
Packaged tea for export at warehouses in Shimanzi, Mombasa. Photo/FILE

MPs on Tuesday night ratified the Kenya-United Kingdom trade agreement setting the stage for duty-free access to their markets.

Trade Committee chairman Adan Haji moved to allay fears that the Kenya-UK Economic Partnership Agreement will open floodgates for the dumping of agricultural goods.

The Mandera South MP said the object of the agreement is aligned to Kenya’s food security agenda.

Kenyan vegetable exports command a 43 per cent share of the UK market, as well as cut flowers at nine per cent.

“The export potential in the UK for Kenya products was valued at about Sh20 trillion in 2019. If Kenya were to target this potential will raise the market share in the UK by five per cent. It will translate to exports worth Sh1 trillion, an ambition that Kenya is pursuing,” Adan said.

The agreement is hailed as one that would support Kenyans working in these sectors by maintaining tariff-free market access to the UK.

"The Kenya-UK EPA will not only benefit our farmers but also largely shield our economy from losing the over Sh40 billion market in the UK," Adan added.

He further assured that infant industries are protected in the deal citing a 10-year period for the local industries to thrive.

Nyando MP Jared Okello said the agreement will open up markets for Kenya in the UK. 

"The agreement goes straight into the Big Four agenda and feeds into the Vision 2030. There will be jobs, and our shilling will be stronger," the MP said.

The approximately 2,500 UK businesses exporting goods to Kenya each year also stand to benefit.

Tariff-free access will be guaranteed over time to UK’s machinery, electronics and technical equipment exports.

The Trade Committee has listed products designated by Kenya as sensitive, hence will attract hefty import duty if sourced from the United Kingdom.

The team drew the ‘sensitive list’ after consultation with the private sector and other stakeholders.

It also took into consideration the industrial and development aspirations of the EAC region as guided by various policy documents.

The committee further considered products designated as sensitive under the EAC Common External Tariff.

Animal Products, both fresh and processed – including meat, hams, sheep and goat products, horses, swine/pork, will attract duty.

Importation of fisheries products of all kinds - such as tuna; dairy products - milk and milk products; poultry and poultry products - such as birds and eggs, will attract duty.

An array of agriculture products will also not be exempted in the UK-Kenya agreement whether in raw and processed form.

These will include fresh and chilled potatoes, tomatoes, onions, garlic, vegetables of all kinds - cabbage, sprouts, lettuce, cucumbers, mushrooms peas, beans, and so on.

Fresh and chilled fruits - cashew nuts, bananas, pineapples avocados, mangoes, pawpaw, watermelons, and apples will not be exempt from duty.

MPs have also listed coffee and coffee products – whether roasted and decaffeinated; tea products; spices; wheat and wheat products; maize seeds and maize flour; palm oil products – such as palm olein and palm stearin fraction as well as rice.

The lawmakers have further sought excluded from duty exemption importation of rice; sugar and sugar products; and cocoa products - such as chocolates.

Infant food, pasta sweet biscuits, cereals; mineral water; drinks and beers, wines, tobacco products will be charged 100 per cent duty under the UK deal.

Salts; cement and related products; chemical products - paints, acids, oxygen; petroleum jelly and soaps are part of the sensitive list.

The list further includes fittings; iron and steel products – iron bars, iron sheets, boxes, cases; paper products; leather products; textiles and apparels products; wood products; glassware; primary cells and motor vehicle parts – engines and chassis.

The trade deal, which UK MPs endorsed last Thursday, provides that UK customs duties shall be entirely eliminated on all products.

Kenya Small-Scale Farmer Forum and Econews Africa are in court to stop the ratification of the agreement citing a lack of consultation.

The trade deal provides that customs duties applicable to UK products imported into the EAC shall be eliminated once the deal is enforced.

There are those whose duty will be progressively reduced to 80 per cent after seven years of the deal’s enforcement, and zero per cent at 15 years.

“Fifteen years after the entry into force of this Agreement the remaining duties shall be abolished,” the trade deal’s annexure reads.

The government has been engaging with the UK on an arrangement to guarantee Kenya access to the UK market after the exit from the European Union.

MPs at the Trade committee say the deal would make Kenyan goods competitive in the UK market.

Trade ministry says there would be room for a review after one year, a time when Kenya can opt-out if dissatisfied.

A total review is also allowed every five years. Kenya signed the deal with the UK last December.

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