Kenya and the United Kingdom (UK) have signed a strategic Economic Partnership Agreement (EPA) following the conclusion of recent negotiations between the two countries, both governments said.
The new framework incorporates the terms of the economic partnership pact negotiated between the East African Community (EAC) partner states and the European Union.
The agreement to secure mutual interests of the two partners after Britain exits the European Union (Brexit), replicates the effects of the EAC deal with the European Union that facilitates EAC exports, free of duties and quotas, to the EU market, officials said in a joint statement.
“When ratified and fully implemented, the agreement is expected to deliver significant benefits to Kenya and its partners in the EAC region,” the British government said in a statement issued alongside the Kenyan authorities on 8 Dec.2020.
The agreement is grounded on the vision of Kenya’s President Uhuru Kenyatta and UK Prime Minister Boris Johnson, who earlier this year agreed to negotiate a framework that will enhance trade and development cooperation between the UK and the EAC partner states, the officials said.
“We have agreed on a comprehensive package of benefits that will ensure a secure, long term and predictable market access for exports originating from the EAC free trade area,” said Betty Maina, Cabinet Secretary for the Ministry of Industrialization, Trade and Enterprise Development.
“We have a great opportunity ahead of us, to realise the mutual benefits that our two leaders envisaged when they agreed on the need for a post-Brexit partnership framework.”
Kenya has taken the lead in this process, considering its strategic trade and economic position in the EAC region. This was underlined during the second Economic Development Forum held on 13 November, 2020, co-hosted by Ms. Maina and James Duddridge, MP, and Minister for Africa in the UK Commonwealth and Development Office.
It is envisaged that the partnership agreement will deepen the EAC integration by ensuring exports from the EAC countries continue to enjoy duty and quota free access to the UK and the EU markets, when the UK leaves the EU on 31 December, 2020.
Moreover, the agreement will enhance privileges for agricultural goods and confer originating status to EAC exports, including Kenya’s flowers and fresh produce, even if they pass through any of the 27 EU countries.
Furthermore, the agreement recalls Kenya’s commitments within the framework of the World Trade Organization and will support African countries to realise their dream of an African Economic Community under the Africa Continental Free Trade Agreement.
The new framework covers a host of other issues, including barriers to free flow of trade between the UK and the EAC countries, constraints to foreign direct investment, intellectual property, e-commerce and government procurement.
The negotiators agreed on shared approaches to trade and investment, including the need to adopt common rules of origin, broader acceptance of product standards and the EAC countries to deepen domestic reform and trade liberalization.
“This is about securing and protecting Kenya’s annual £2 billion ecosystem of trade with the UK on which hundreds of thousands of jobs and millions of livelihoods depend. Delivery if this was our primary objective for the year and we are thrilled to be over the finishing line,” said Manoah Esipisu, Kenyan High Commissioner to the United Kingdom.
Under the agreement, the UK has underlined its commitment to enhance its development cooperation support to the EAC countries to realize their development goals. This includes investing in key sectors of Kenya’s economy to support the Government’s priority Big Four agenda and Kenya’s Vision 2030 development programmes.
Deepening investment climate reforms in Kenya and the EAC countries will create opportunities for expanding trade and foreign direct investment from the UK and other source markets, the two governments said.