Kenya: UK, Kenya Agree on Landmark Trade Deal

A worker at the Oserian Flower Farm located in Kenya's Rift Valley packs a bouquet of roses at the semi automated home pack in readiness for export (file photo).

Kenya and the UK on Tuesday reached a decisive consensus on a new trade agreement, nearly 55 days before expiry of existing privileges as London formally exits the European Union protocols.

The new deal, which includes clauses from the old Economic Partnership Agreements under the European Union, will now be made formal upon signing of the agreed texts by the two sides.

"The agreement will provide continuity for businesses, investors and supply chains besides setting foundations for further economic development," Kenya's Trade Cabinet Secretary (CS) Betty Maina said on Tuesday.

In the virtual meeting between senior government officials of the two countries, the two government agreed to work on modalities before the end of this year to protect products from the two countries from the eight per cent duty which will be charged once the UK fully leaves the European Union in January.

Kenya's Trade CS Betty Maina and Interior's Fred Matiang'i led talks with UK Minister for Africa James Duddridge, International Trade Minister Ranil Jayawardena and the Prime Minister's Trade Envoy to Kenya Theo Clarke.

The officials signed the draft documents, which indicates that negotiations on the agreement have been completed and will await the formal signing ceremony.

The sixth bilateral trade deal will allow British and Kenyan companies to expand on trade already worth £1.4 billion ($1.8 billion) a year.

The deal will be beneficial to the export of Kenyan products such as tea, coffee, vegetables and flowers, while the UK will have free access to import vehicles, pharmaceuticals and paper worth almost £800 million ($1 billion).

It means Kenyan flowers and other goods could continue accessing UK markets quota free or duty free. Nairobi, however, risks facing tougher rules should a new agreement not be in place by end of the transition period.

A dispatch issued on Tuesday evening said the two sides had reached common ground on major trade issues for an agreement that will take over from 2021, after the UK exits the transitional clauses of the European Union.

The UK voted to leave the EU in 2016, and formally left the bloc in January this year. It has a transition period up to December 31, 2020 during which time it has been signing new agreements to replace deals it had signed with countries under the EU bloc.

All trade deals it earlier signed with Kenya, through the EU, will be valid until the end of the transition period on December 31, 2020.

In Africa, the UK has already signed five deals mainly through economic blocs.

In East Africa, Kenya chose to negotiate bilaterally, initially, because it could be most harmed when transitional clauses expire.

Other countries in the region had wanted negotiations to start next year as they were in electioneering mode.

A dispatch from the UK High Commission in Kenya said the deal will have entry clauses for other East African Community member states.

Jane Marriott, the British High Commissioner to Kenya, said the deal will lay "the foundations to expand our trade in future."

"Whether it is in tea, horticulture, pharmaceuticals, or vehicles, trade between our countries continues to grow.

"It's fantastic we've been able to complete negotiations so quickly and we look forward to working with the Government of Kenya to build on this in the years ahead," she said in a statement.

Mr Duddridge said the trade deal will build on the UK and Kenya's historic ties and is the perfect platform to increase trading partnership in future.

"The UK will always be a champion of liberal free trade that prioritises the mutual benefits of doing business with integrity," he said.

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