Editorials

Ensure level playing field for local industries in UK deal

betty-maina

Ministry of Industrialization, Trade and Enterprise Development Cabinet Secretary Betty C. Maina speaking at the Crowne Plaza Hotel, JKIA on Monday, January 18, 2021. FILE PHOTO | NMG

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Summary

  • Despite the optimism by Kenya’s Trade and Industrialisation ministry, there is need for caution to ensure we are not locked in a lopsided trade arrangement for a quarter of a century.
  • This calls for careful review of every clause in the post-Brexit trade pact so that Kenya’s budding manufacturing and agricultural sectors are not hurt or frustrated by policies that may give an upper hand to their UK counterparts.

Kenya says it stands to benefit immensely from the untapped British market, following a trade and investment deal with the European nation.

The Trade and Industrialisation ministry projects a five percent growth in export market share in the UK by 2025 under the pact in which the Kenya would offer a gradual and partial reduction of tariff on some British goods entering the domestic market for a period of 25 years from the commencement of the agreement but with a seven-year moratorium.

This would translate to about Sh1.1 trillion, up from the current exports to the UK which stood at Sh39 billion for the five years between 2015 and 2019.

Despite the optimism by Kenya’s Trade and Industrialisation ministry, there is need for caution to ensure we are not locked in a lopsided trade arrangement for a quarter of a century.

This calls for careful review of every clause in the post-Brexit trade pact so that Kenya’s budding manufacturing and agricultural sectors are not hurt or frustrated by policies that may give an upper hand to their UK counterparts.

The UK and Kenyan parliaments are yet to ratify the new Economic Partnership Agreement (EPA) signed between the two countries last year—which offers a golden opportunity for reflection and review of any clauses that may not be in the best interest of the two nations.

The manufacturing and agricultural sectors hold a huge potential in Kenya and it is only fair that the playing field is levelled so that they may thrive and attract the much-needed export earnings.

Kenyan traders must, however, be alive to the fact that the global trade scene has evolved and that it is only quality and competitively priced products and services give them a chance.

Time is fast running out for market protectionism and they must learn to compete in a liberalised environment without relying on too many special safeguards.

The government must address factors that affect business competitiveness such as taxation and cost of energy as well as enforcement of sanitary and phytosanitary standards.