What the trade deal deal with UK means for Kenya
Cabinet Secretary for Industrialisation, Trade and Enterprise Development Betty Maina with UK's International Trade Minister Ranil Jayawardena during the signing of the new Kenya-UK trade deal in London, United Kingdom. Also present is Kenya's High Commissioner to the United Kingdom Amb Manoah Esipisu.
Kenyan fresh produce exports will enjoy duty free exports to the UK post Brexit, and secure the Sh220 billion trade with the European nation, following a new deal signed on Tuesday.
"This deal is very important for us. We negotiated for duty free, quarter free entry of Kenyan fresh produce into the UK and we got that," Mr Hosea Machuki, the CEO of the Fresh Produce Exporters Association of Kenya (FPEAK), told delegates at the Kusi Ideas Festival in Kisumu.
"We see potential for increase in our fresh produce to the UK by five per cent by 2025 and this will assist growers, traders and exporters," Machuki said.
Machuki said about 40 per cent of flowers in the UK come from Kenya and Kenya needs to market its products better to get more buyers. Last year, Kenya exported fresh produce worth Sh153 billion.
Quick recovery
This year, due to the weakening of the Kenyan shilling, the exporters have seen a quick recovery, having already exported goods worth Sh139 billion in the nine months. The FPEAK boss said that the sector expects to close the year at Sh145 billion, and would have had a record year were it not for the Covid-19 disruption.
Machuki revealed that his association has asked the National Treasury to allocate the Sh1.5 billlion given to the sector by President Uhuru Kenyatta in the Covid-19 mitigation measures, to help them cut down on freight charges to the UK and Netherlands by at least one dollar.
Kenya and the UK signed the strategic Economic Partnership Agreement (EPA) on December 8 in London, following the conclusion of negotiations between the two countries.
The partnership agreement with the UK will also deepen the East African Community (EAC) integration by ensuring that exports from the EAC countries continue to enjoy duty and quota free access to the UK and the EU markets, when the UK leaves the EU on December 31, 2020.
The agreement will also enhance privileges for agricultural goods and confer originating status to EAC exports, including Kenya's key flowers and fresh produce, even if they pass through any of the 27 EU countries.
In addition, the agreement recalls Kenya's commitments within the framework of the World Trade Organisation and will support African countries to realise their dream of an African Economic Community under the Africa Continental Free Trade Agreement.
The agreement will secure the mutual interests of the two partners after Brexit, and replicates the effects of the East African Community EPA with the European Union that facilitates EAC exports, free of duties and quotas, to the European Union market.
Significant benefits
When ratified and fully implemented, the agreement is expected to deliver significant benefits to Kenya and its partners in the EAC region.
President Uhuru Kenyatta and the UK Prime Minister Boris Johnson earlier this year agreed to negotiate a framework that will enhance trade and development co-operation between the UK and the EAC partner states.
"We have agreed on a comprehensive package of benefits that will ensure a secure, long term and predictable market access for exports originating from the EAC free trade area," Ms Betty Maina, the Industrialisation Cabinet Secretary, said in a statement from London.
"We have a great opportunity ahead of us, to realise the mutual benefits that our two leaders envisaged when they agreed on the need for a post-Brexit partnership framework."
Maina said Kenya had taken the lead in this process, considering its strategic trade and economic position in the EAC region.
This was underlined during the second Economic Development Forum held on November 13, she co-hosted with James Duddridge, MP, and Minister for Africa in the UK Commonwealth and Development Office.
The new framework covers a host of other issues including barriers to free flow of trade between the UK and the EAC countries, constraints to foreign direct investment, intellectual property, e-commerce and government procurement.
The negotiators agreed on shared approaches to trade and investment, including the need to adopt common rules of origin, broader acceptance of product standards and the EAC countries to deepen domestic reform and trade liberalisation.
"This is about securing and protecting Kenya's annual £2 billion ecosystem of trade with the UK on which hundreds of thousands of jobs and millions of livelihoods depend.
Delivery of this was our primary objective for the year and we are thrilled to be over the finishing line," Mr Manoah Esipisu, the Kenyan High Commissioner to the UK, said.
Under the agreement, the UK has underlined its commitment to enhance its development co-operation support to the EAC countries to realise their development goals. This includes investing in key sectors of Kenya's economy to support the government's priority Big Four agenda and Kenya's Vision 2030 development programmes.
Deepening investment climate reforms in Kenya and the EAC countries will create opportunities for expanding trade and foreign direct investment from the UK and other source markets.
The Trade CS was accompanied by PS Johnson Weru, who was Kenya's chief negotiator, and Leah Aywah Barasa, a Chief State Counsel in the Attorney-General's office.
