Kenya insulates critical industries in UK trade deal

Kenya insulates critical industries in UK trade deal

Kenya has moved to insulate its nascent industries under its new trade deal with the United Kingdom (UK) ahead of the agreement’s ratification.

In a brief to Parliament, the Ministry of Industrialization, Trade, Enterprise and Development has said Kenya will be offering to open 82.6% of its total trade to the UK.

The opening will however occur over an extended transition period of up to 25 years with a seven year moratorium and will constitute mainly of raw materials, capital goods and intermediate products.

“The prolonged transition period protects infant industries. This was aimed at safeguarding agriculture, industry and Kenya’s market interest in the region,” the ministry noted.

“The exclusion list is the means by which the Government addresses the welfare loss and threats posed by economic partnership agreements (EPAs) on Agriculture and Industry. The products in the exclusion list include agricultural and industrial products.”

Further, the ministry has outlined inbuilt measures to mitigate the threat of UK imports to Kenya’s domestic and regional markets.

The safeguards include trade remedy provisions against unfair trade practices such as dumping which create market distortion.

The deal further encompasses an amendment clause allowing for the revision of the trade agreement which includes a mandatory five-year review clause.

Moreover, the new trade deal has an exit clause and allows partner states in the East African Community (EAC) to join the agreement.

Kenya reached a new deal in principle with the UK on November 3 to see it retain a duty free market access into the country ahead of Brexit on December 31, 2020.

The deal sees Kenyan goods retain the same trade terms with the UK as was the case with the previous EAC-European Union trade pact.

Earlier this week, Trade Cabinet Secretary Betty Maina defended the country’s solo path in negotiating both the UK and US trade deals at the expense of its partners who have previously expressed caution in joining the negotiation table in spite of Kenya maintaining an open door policy.

“We’ve made the decisions based on our strategic interests. Being the only country considered as developing, we would have for instance lost open market access unlike our regional partners upon the end of the Brexit transition period,” she said.

The new Kenya-UK trade deal was announced in record time with slightly over two months of initial negotiations which begun at the end of August.