TRUCE

Kenya-Pakistan end tariff wars, draft MoUs for more trade

Attestation Fee for Kenyan tea exports removed.

In Summary

•The fee came into place in when Kenya initiated taxation of Pakistan rice at 75 per cent under the East African Community (EAC) protocol in the year 2007.

•The two countries also also working on a number of MoUs on cooperation in trade and investment.

Industrialisation, Trade and Enterprise Development CS Betty Maina and Pakistan High Commissioner to Kenya Saqlain Syedah during a press conference on the removal of attestation fee on tea export documents and trade cooperation between the two countries, on August 31/WILFRED NYANGARESI
Industrialisation, Trade and Enterprise Development CS Betty Maina and Pakistan High Commissioner to Kenya Saqlain Syedah during a press conference on the removal of attestation fee on tea export documents and trade cooperation between the two countries, on August 31/WILFRED NYANGARESI

Kenya and Pakistan have ended a long-standing tariff war that hurt trade between the two countries, mainly Kenyan tea exports.

Yesterday, the two countries announced the removal of the 'Attestation Fee' that was charged by the Pakistan High Commission in Nairobi.

Calculated at 0.5 per cent of the entire export volume for the tea exporters from Kenya, it made Kenyan tea costlier when it landed in Pakistan compared to other teas.

Pakistan slapped the fee on Kenya tea when it initiated taxation of Pakistan rice at 75 per cent under the East African Community (EAC) protocol in 2007.

Tea exporters from Kenya were required to get their export documents confirmed and approved by the Pakistan High Commission, before shipping out consignments.

“I am glad to inform the Kenyan traders today that the attestation fee has officially been removed effective the August 16, 2021. And I have on record the confirmation of the removal of that gazette notice in Pakistan,” Industrialisation, Trade and Enterprise Development CS Betty Maina said.

She spoke at a joint media briefing in Nairobi where she said scrapping of the fee will make Kenyan tea more attractive in the Pakistan , which is the biggest export market for local tea.

Pakistan absorbs about 40 per cent of all tea exports from Kenya.

In 2020, Kenya earned about Sh25.9 billion of the total $589.8 million (Sh64.7billion) worth of teas Pakistan imported from across the world.

The two countries initiated talks on April 7 this year, which also included development of MoUs that will help increase and diversify bilateral trade.

“Today is an important day for Kenya and Pakistan with respect to bilateral trade between the two countries. Removal of Non-Tariff Barriers will open a new era for Kenyan tea exporters and Pakistan importers,” Pakistan High Commissioner Saqlain Syedah said.

According to Syedah, the agreement is in line with Pakistan's policy on Africa, aimed at establishing ease of doing trade.

Pakistan is the second top export destination for Kenya after Uganda, with trade between the two countries being in favour of Kenya.

In 2020, Kenyan exports to Pakistan were valued at about $ 506 million (Sh55.6 billion ) against imports worth $199 million (Sh21.9 billion ).

A number of MoUs are in the offing, and are expected to boost trade between the two countries which are working on technical standards for products.

They are keen to strengthen collaboration in areas of standardisation, conformity assessment, sharing of technical information and training of each other’s personnel in the field of standards, CS Betty noted yesterday.

An MoU between Kenya Bureau of Standards (KEBS) and Pakistan Standard Quality and Control Authority (PSQCA) on matters of standard will be signed soon, she said.

On matters plant health, both sides have agreed to strengthen collaboration in Distinctness, Uniformity and Stability (DUS) and Plant Variety protection, seed quality assurance and enforcement, and exchange programmes to enhance learning from experiences.

Two MoUs on plant protection initiated in 2016 on Mangoes and Citrus importation from Pakistan have been finalised and are ready for signing, subject to concurrence by Kenya’s State Department for Agriculture.

Kenya has also requested Pakistan to consider importation of avocado, herbs, nuts, and vegetables from Kenya. The Pakistan side agreed to consider the request.

In this regard, Kenya has prepared and already shared two MoUs on avocados and nuts exports to Pakistan for their review and consideration,the CS revealed yesterday.

Other areas of cooperation that the two sides are closely and actively working on, she said,  include cooperation in trade and investments, health and pharmaceuticals, customs, leather and textile industries, vocational and technical training, and tourism.