Uk Trade Agreement with Kenya
The Committee also expressed concern about the Government`s consultations with Gibraltar, Crown States and decentralized administrations. The government has provided only a limited amount of information on these discussions. In particular, the Committee wishes to know whether any concerns have been raised and, if so, what measures have been taken to address them. Accession of EAC Partner States: The EPA allows other EAC Partner States to accede to it and contains appropriate provisions for its amendment in order to avoid the conclusion of a new agreement with the EAC. Initial scope: The EPA focuses on merchandise trade between Kenya and the UK. In particular, it deals with: As one of East Africa`s largest economies, Kenya is an important trading partner for Britain. The UK market accounts for 43% of total vegetable exports from Kenya as well as at least 9% of cut flowers, and this agreement will support Kenyans working in these sectors by maintaining duty-free market access in the UK. Kenya`s largest merchandise imports to the UK last year were tea, coffee and spices (KES 18 billion); vegetables (KES 11.7 billion); and cut flowers (KES 8 billion). The UK exports more goods to Kenya than it imports, with exports worth $534 million, up from $447 million in imports in 2019.
The deal will increase competition in Kenya, which could open up opportunities. Barriers affecting the productivity of the Kenyan economy include high energy costs and infrastructure deficiencies. Many companies in Kenya hope the deal will prompt the Kenyan government to take supply-side measures that will increase production and allow the country to take full advantage of the deal. This, in turn, could create new opportunities through more economic growth and employment. In February 2016, the European Commission presented to the Council a proposal for the conclusion, signature and provisional application of the entire EPA with the East African Community. Today is a historic day when the Economic Partnership Agreement between the United Kingdom and Kenya enters into force. This ensures that Kenyan exports are not affected by tariffs and provides a basis for both our countries to trade more, invest more and create more opportunities for both our citizens. On the 10th. In February 2021, Lord Grimstone of Boscobel, Minister of State at the Department for International Trade, said the government supported parliamentary scrutiny of trade agreements and would therefore facilitate a debate in Parliament on the EPA between the UK and Kenya “in the coming weeks”. Consultations/public participation in the process: The UK Government held various consultation meetings with various stakeholders and the EPA was debated in the UK Parliament.
The Kenyan government has undertaken the same process, but has been criticized for broader consultations with stakeholders. The Committee sought clarification as to why, instead of introducing the new agreement, the government had not adopted the EU market access regulatory system at national level. The committee requested further information on other trade arrangements envisaged by the Government. The agreement aims to facilitate trade in goods and provides Kenya with duty-free and quota-free access to the UK market. Kenya, on the other hand, has committed to gradually liberalize trade in goods, but maintains tariffs on some products considered domestically sensitive. The House of Lords International Agreements Committee reviewed the EPA between the UK and Kenya on 1 February 2021. He brought the agreement to the special attention of the house. However, concerns were raised about the potential impact of the agreement on the EAC.
The committee highlighted the “disruptive political and economic impacts” caused to the EAC during negotiations between the UK and Kenyan governments. Other EAC countries opposed the bilateral agreement between the UK and Kenya and wanted to renegotiate a future agreement as the EAC`s trading bloc. Some civil society groups have also expressed concern that the EPA between the UK and Kenya could disrupt regional trade within the EAC and undermine regional integration. This agreement recognizes the importance of the entire region and is open to other members of the East African Community. While deepening regional integration is one of the main objectives of the trade deal, there is a risk that it will contribute to undermining regional integration, calling into question the UK government`s commitment to supporting regional integration and trade as part of its broader international development strategy. Expanded scope: In addition, the EPO provides for a 5-year negotiation period to extend the EPO to the following elements: trade in services; competition policy; investments; private sector development; trade, environment and sustainable development; intellectual property rights; and transparency in public procurement. Kenyan opponents of the deal also warn that it could lead the country to become too dependent on imports. This could have a negative impact on President Kenyatta`s socio-economic goals (which include improving production and food security in the country). A recent report found that an estimated 1.4 million Kenyans currently face “acute food insecurity”, and there are fears that the trade deal could exacerbate this problem by reducing the amount of food produced in Kenya and ultimately driving up prices. The Committee noted that the agreement is development-oriented and grants Kenya duty-free and quota-free access to the UK market in exchange for the gradual liberalisation of certain UK products in the Kenyan market. The Economic Partnership Agreement between the United Kingdom and Kenya, ratified by both parties, enters into force and represents an important step towards an agreement with the entire East African Community.
Critics of the deal warn that the Kenyan government must learn from the mistakes of the past, citing examples such as an alleged failure to make full use of Kenya`s recent free trade agreement with the US (which has been criticised as unilateral in favour of the superpower). Kenya`s participation in the U.S. African Growth and Opportunity Act has been criticized by many as stagnant and represents a missed opportunity. The House of Lords is due to debate the deal on 2 March 2021. No formal debate is scheduled in the House of Commons. So it turns out that the new uk-Kenya trade deal comes with both risks and opportunities. On the one hand, the agreement offers Kenya the prospect of cementing a long-term trade relationship with the UK that can boost Kenyan exports and have broader long-term benefits for the Kenyan economy. On the other hand, there are concerns that increased competition from the UK will leave many Kenyan companies behind and that the country does not have the infrastructure to take full advantage of the deal. Arguments on both sides of the debate are largely rooted in economic theory and past experience – the actual impact of the deal remains to be seen and will be closely monitored by both governments in the coming months and years. In any case, as with any agreement, there are derogations and, in addition, Kenya and the United Kingdom have the possibility to reject the terms of the agreement one year after its existence (as well as at subsequent five-year intervals).
This gives both sides some security in case things don`t progress as hoped. Kwadwo Sarkodie is a dispute resolution partner, and Thomas Ajose is a partner at Mayer Brown in London The EPO has been assessed in the context of the impact of the UK`s decision to leave the European Union on 31 January 2020 (Brexit) and the Brexit transition period expiring on 31 December 2020 on the UK`s trade relationship and the need to: (a) maintain trade relations between the two countries; (b) regulate future trade relations between the two countries; and (c) promote a gradual opening of the Kenyan market to British products. Kenya-EAC relations: Kenya`s trade relations with other EAC partner states have not been without tensions. Kenya is the only EAC partner state to have joined the EPA and it remains to be seen whether the other EAC partner states will opt for it. Consensus among EAC partner states is essential for the full implementation of the EPA and the realisation of benefits by the parties, as the reduction in tariffs on UK products must be implemented after seven years from the date of its entry into force. .