Trade CS gives roadmap on Kenya, UK trade deal

What you need to know:

The trade deal, which is awaiting approval from lawmakers of both countries, will eventually see duty on 82.6 percent of products originating from the UK abolished after 25 years.
The document shows the 10 percent duty on intermediate goods will start reducing after seven years from the time the trade pact is ratified, resulting in its abolishment eight years later.
Kenya will, on the other hand, start phasing down the duty on finished products (currently billed from 25 percent) after 12 years, leading to its elimination 13 years later.

Kenya will start to gradually cut duty on goods from the UK seven years after the post-Brexit trade agreement with the Europe’s second largest economy is enforced, giving time for domestic firms to enhance their competitive advantage.

The trade deal, which is awaiting approval from lawmakers of both countries, will eventually see duty on 82.6 percent of products originating from the UK abolished after 25 years.

The document shows the 10 percent duty on intermediate goods will start reducing after seven years from the time the trade pact is ratified, resulting in its abolishment eight years later.

Kenya will, on the other hand, start phasing down the duty on finished products (currently billed from 25 percent) after 12 years, leading to its elimination 13 years later.

“The moratorium (of seven years), together with the phased reduction of duties, is considered necessary to protect Kenya’s industry, particularly the manufacturing sector, which is less developed and competitive than the UK industry,” Industrialisation and Trade secretary Betty Maina said in a statement.

Nairobi signed the strategic Economic Partnership Agreement (EPA) with London on behalf of the six-nation East African Community (EAC) on December 8, preserving duty- and quota-free access for exports to the UK after the latter left the 27-member European Union bloc on December 31.

The rest of the EAC states – whose exports are shielded from tariffs because they are Least-Developed Countries (LDCs) – sat out of the negotiations with the UK.

The Industrialisation ministry says the finished goods which will enter Kenya duty and quota-free after 25 years account for about 2.6 percent of the value of trade between Kenya and the UK.

“These are finished products that are considered to have minimal negative impact on Kenya and other EAC Partner States. Any industries that may be producing similar goods in Kenya and other EAC Partners, will have 12 years before liberalisation starts to adjust,” Ms Maina said.