Kenya averts Brexit blow with new UK trade pact

Kenyan exporters will enjoy duty-free access to the United Kingdom market after the two countries signed a new trade deal yesterday. 

The Economic Partnership Agreement (EPA) valued at Sh200 billion marks the first step towards a broader trade pact between the UK and the East African Community (EAC) trading bloc.

The new pact, which comes into effect on January 1, is crucial in averting likely trade disruptions post-Brexit. 

The UK ranks in the top five export destinations for Kenyan products with an annual average value of about Sh39 billion for the last five years.

Industrialisation, Trade and Enterprise Development Cabinet Secretary Betty Maina and UK International Trade Minister Ranil Jayawardena signed the deal in London.

“This trade agreement will ensure that all companies operating n Kenya, including British businesses, can continue to benefit from duty-free access to the UK market,” read a statement from the British High Commission in Nairobi following the signing of the agreement. 

“It will support jobs and economic development in Kenya as well as avoid possible disruption to UK businesses such as florists who will be able to maintain tariff-free routes for Kenya’s high-quality flowers,” said the statement. The UK is supposed to have reached a Brexit agreement with the European Union by January 1, failure to which it will see its exports and imports to and from the rest of Europe begin to attract tariffs and vice versa. 

In March last year, the UK’s Department of International Trade released new guidelines zero-rating import duty on 87 per cent of imports, including those from Kenya, as part of attempts to cushion local consumers from price shocks in the event of a no-deal Brexit. 

“If the UK leaves the European Union with no deal, you may need to pay different rates of customs duty on imports,” said UK’s Department of International Trade in a statement on its website. “These rates would only be applied if the UK were to leave the EU with no deal.”

Maina said Kenya had briefed the other EAC partner states on the agreement.

Exporters dealing in fish, horticulture, leather, tea and coffee are among the biggest winners in the event the UK leaves the EU without a trade deal. Other products that have been zero-rated in the proposed tariff guide include textiles, footwear, aluminium and base metals.

Yesterday’s deal came on the back of months of trade talks between the two countries, with the UK further looking to establish closer ties with bilateral trade partners post-Brexit.