economy
Trade CS gives a roadmap for the Kenya-UK trade deal
Wednesday February 24, 2021
Cabinet Secretary for the Department of Industrialization, Trade and Business Development, Betty C. Maina, speaks at the Crowne Plaza Hotel, JKIA on Monday, Jan. 18, 2021. FILE PHOTO | NMG
BY CONSTANT MUNDA
Summary
- The trade agreement, which has yet to be approved by the legislators in both countries, ultimately provides for 82.6 percent of UK-based products to be abolished after 25 years.
- The document shows that the tariff of 10 percent on intermediates begins to decrease seven years from the date of ratification of the trade pact, leading to its abolition eight years later.
- Kenya, on the other hand, will begin reducing tariffs on finished products (currently billed at 25 percent) after 12 years, leading to its abolition 13 years later.
Seven years after enforcing the post-Brexit trade deal with Europe’s second largest economy, Kenya will gradually cut customs duties on goods from the UK to help domestic businesses build their competitive advantage.
The trade agreement, which has yet to be approved by the legislators in both countries, ultimately provides for 82.6 percent of UK-based products to be abolished after 25 years.
The document shows that the tariff of 10 percent on intermediates begins to decrease seven years from the date of ratification of the trade pact, leading to its abolition eight years later.
Kenya, on the other hand, will begin reducing tariffs on finished products (currently billed at 25 percent) after 12 years, leading to its abolition 13 years later.
“The moratorium (of seven years), along with the gradual reduction in tariffs, is deemed necessary to protect Kenyan industry, particularly the manufacturing sector, which is less developed and competitive than UK industry,” said Betty Maina, secretary for Industrialization and trade make a statement.
On December 8, Nairobi signed the Strategic Economic Partnership Agreement (EPA) with six countries on behalf of the East African Community (EAC) with London to guarantee duty-free and quota-free access for exports to the UK after the 27-member bloc left the European bloc Union on December 31st.
The rest of the EAC – whose exports are shielded from tariffs because they are Least Developed Countries (LDCs) – have pulled out of negotiations with the UK.
According to the Ministry of Industrialization, the finished goods that are imported into Kenya duty-free and quota-free after 25 years account for around 2.6 percent of the trade value between Kenya and Great Britain.
“These are finished products that are believed to have a minimal negative impact on Kenya and other EAC partner countries. All industries that produce similar goods in Kenya and other EAC partners will have 12 years before liberalization adapts, ”said Ms. Maina.
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