Kenya and UK officials after signing agreement in December 2020

The British Parliament is seeking more time to ratify a new trade deal between Kenya and the UK.

The agreement is yet to take effect because Kenya is the only East African Community (EAC) state that has signed the Economic Agreement. The move by EAC states is exposing tensions over the move between Kenya and its East Africa Community (EAC) partners.

In a report by the International Agreement Committee, it was noted that the precursor agreement to the UK-Kenya partnership agreement was the economic agreement between the East African Community partner states and the EU and its member states.

The report noted that one of the reasons why the other EAC members have either not ratified or not signed the EU Agreement is that as ‘least developed countries’ (LDCs) they already benefit from duty-free, quota-free access under the EU’s Generalised Scheme of Preferences (GSP) Least Developed Countries Framework.

By contrast, Kenya is the only country in the EAC that is not classified as an LDC and so does not benefit from the GSP Least Developed Countries Framework.

Instead, Kenya is classified as a ‘lower-middle-income country’, qualifying for the GSP General Framework, providing reduced rates of import duty only on certain goods, with other goods subject to most favored nation (MFN) rates.

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The UK Government has therefore decided to roll over the EU-EAC EPA on a bilateral basis with Kenya thus securing preferential access for Kenya even though the EU Agreement is not actually in effect.

Kenya and UK officials pose after signing a free trade deal on December 8, 2020
Kenya and UK officials pose after signing a free trade deal on December 8, 2020

The committee says concerns have been expressed that the UK-Kenya Agreement may have disruptive political and economic impacts on the East African Community. During negotiations between the UK and Kenyan Governments in 2020, other EAC members expressed opposition to the two countries’ bilateral decision to roll over the EU-EAC EPA, expressing their preference to renegotiate a future deal as one trading bloc.

To avoid Kenya facing UK tariffs at the end of the transition period, EAC members reportedly asked the UK to establish a transitional mechanism that would temporarily continue to provide Kenya with Market Access Regulation-style conditions on a unilateral basis.

Until the end of the Brexit transition period, Kenya enjoyed duty-free, quota-free access to the UK’s markets through the EU’s Market Access Regulation (MAR). As the UK did not replicate the MAR at the end of the transition period, Kenya would have faced an increase in tariffs without a trade agreement or other measures in place.

The International Agreements Committee drew special attention to the Economic Partnership Agreement between the UK and Kenya on the grounds that it was politically important and gave rise to issues of public policy that the House may wish to debate prior to ratification.

Through the trade agreement, the government of Kenya is targeting to establish value addition for Kenyan agriculture products and in the process promote industrial development in Kenya.

The Kenya-UK trade deal agreement was signed in December 2020 in London. The trade deal will enable Kenyan companies exporting flowers, fresh vegetables to access the UK market under a duty-free, quota-free arrangement.

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