Kenya offers Britain 25 years tariff-free, quota-free imports in new trade deal

Kenya, in a new trade deal with the United Kingdom (UK), has approved imports of British goods into the country tariff-free and duty-free for the next two and half decades.

Kenya’s new trade deal with the UK – post Brexit trade deal – allows for British imports of both finished and unfinished goods into its local market.

“Kenya is offering to open 82.6 per cent value of total trade to the UK over an extended transition period (up to 25 years) constituting of mainly raw materials, capital goods, intermediate products and all other essential goods,” noted Kenya’s Cabinet Secretary Betty Maina.

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The trade pact however, excludes the importation of agricultural and industrial products for the first 7 years of the 25-year period.

According to Cabinet Secretary Betty Maina, this is to protect infant industries as well as safeguard the country’s agriculture and industry sectors.

Therefore, the exclusion lists is the means by which the government addresses the welfare loss and threats posed by the EPA on agriculture and industry,” she said.

The Economic Partnership Agreement (EPA) pact signed by both countries on December 8, 2020 have been tabled before their respective Parliaments for ratification.

Kenya exported Sh49.5 billion ($451 million) goods to UK last year up from Sh39.7 billion ($362 million) in 2019 while imports from UK dropped to Sh29.3 billion ($267 million) from Sh35.3 billion ($322 million) over the same period.

Kenya imports vehicles, machinery, nuclear reactors, boilers, pharmaceutical products, printed books, paper and paperboard, articles of pulp, paper and board newspapers, pictures and beverages, spirits and vinegar from the UK.

It also buys electrical, electronic equipment, textile articles, sets, worn clothing, miscellaneous chemical products, ships, boats, and other floating structures.

Kenya on the back of the new trade pact is expected to benefit from an untapped UK market potential estimated at $205 billion as against Kenya’s current level of exports which stands at 0.2 per cent of the UK market size.

The government, through the National Export Development Agenda, is aiming at enhancing Kenya’s market share in the UK by five per cent by 2025, which will translate to $10.2 billion (Sh1.1 trillion) up from the current exports to the UK which stood at Sh39 billion ($362 million) for the last five years running 2015 to 2019,” Ms Maina said.