Kenya-UK trade deal provides for other EAC member states to join in by 2025

Kenya is hoping that East African Community member states join the new trade agreement it signed on Wednesday with the UK.

Although the agreement between Nairobi and London protects Kenya’s coffee, fresh vegetables, cut flowers and tea exports from taxation in the UK market, it also provides for exports of local products whose raw materials have been sourced from other developing countries.

Kenyan officials say the deal has a framework for other countries in the region to join.

The agreement also includes provisions that would only succeed if the EAC works as a unit. For example, there is a clause for parties to constantly consult on a Customs Duty regime that does not contradict the region’s overall Customs Union.

The deal also requires expansion of the regional market, harmonisation of Customs and standards for goods, and a bonded transportation system for goods in transit for one-off Customs payment.

Kenya beat the December 31 deadline to thrash out the details of an Economic Partnership Agreement (EPA) to replace the European Union protocols that Britain will be exiting at the end of this month.

Johnson Weru, Kenya’s Trade Principal Secretary, said the rush was necessary because “we had no fallback position like the rest”. He added that the deal Kenya signed is aligned with EAC Customs Union protocol, which states that members should not enter into agreements that disadvantage trade between the regional neighbours.

Quota-free, duty-free

On Tuesday, Kenya’s Trade and Industrialisation Cabinet Secretary Betty Maina and UK’s International Trade Minister Ranil Jayawardena signed the trade agreement that will guarantee quota-free, duty-free exports of certain Kenyan products into the UK market.

“The Economic Partnership Agreement” between Kenya and the UK implies that the bilateral deal can be updated in future depending on which country from the EAC joins it.

“We had good leadership from both sides. The President of Kenya, Uhuru Kenyatta and the Prime Minister of the UK, Boris Johnson, had met in January and gave direction to their respective teams on what to do,” said Mr Weru, who led Kenya’s technical team of negotiators. “They gave us the architecture and we filled in the design.”

He added that the language used includes options for the EAC as a bloc. Tanzania, Uganda, Burundi, Rwanda and South Sudan are the other EAC member states who had initially requested negotiations to begin in 2021.

Among the provisions in the agreement, which now awaits parliamentary ratification, is that both Kenya and the UK will establish frameworks that ensure free flow of transit goods, such as bonded transport regimes, originating from each other’s territories.

EAC member states will have up to five years to set up proper infrastructure for Customs and trade facilitation.

The UK committed to help improve access to regional and international markets for agricultural products, including the development of market systems and market development strategies.

The agreement states that the UK may financially or technically support EAC partner states in addressing constraints related to implementing the deal. That may be through specific budgetary allocations or through aid agencies, but it does not give specified amounts to be channelled to the region for opening up markets. This is one of issues Kenya had requested.

Kenyan and British officials hailed the agreement. Ms Maina said: “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.”

UK Trade Minister Ranil Jayawardena said in a statement: “This deal makes sure businesses have the certainty they need to continue trading as they do now, supporting jobs and livelihoods in both our countries.”