bilaterals.org | EAC secures unlimited access to Kenya-UK trade deal

The East African | 1 March 2021

EAC secures unlimited access to Kenya-UK trade deal

By James Anyanzwa

East African Community (EAC) member states have secured an open-ended time frame to access the trade agreement signed between Kenya and the United Kingdom (UK) in a development that is likely to protect the fragile regional unity and preserve the spirit of regional integration.

“This agreement shall be open to accession by any state that is a Contracting Party to The Treaty for the Establishment of the East African Community. A request for accession shall be submitted to the EPA Council,” reads the Economic Partnership Agreement (EPA) between Kenya and the UK dated December 8, 2020.

The agreement shall also be reviewed after every five years from the date of its entry into force.

The trade pact seeks to provide full duty-free and quota-free market access conditions for goods originating from an EAC Partner State into the UK market on a secure, long-term and predictable basis and liberalise progressively and gradually an EAC Partner State’s market for goods originating from the UK.

Burundi, Rwanda, Tanzania and Uganda had demanded the extension of the negotiations period by one year so that they could sign the agreement as a bloc.

The EAC Customs Union Protocol, the first pillar of regional integration, requires all EAC countries to negotiate as a bloc matters related to trade with third parties.

However, a member may separately negotiate bilateral trade agreements, subject to notification and approval by other members.

The EAC partner states through the Secretariat made a proposal to the British government seeking an extension of the period for the negotiations of a new trade agreement by one year until December 2021 and that during this period Kenya be allowed to continue having preferential market access to the UK market after December 31, 2020.

Everything-but-Arms

However, these countries can still enjoy duty-free quota-free access to the UK market by virtue of their classification as Less Developed Countries under the Everything-but-Arms initiative, which was introduced in 2001 under the European Union’s Generalised Scheme of Preferences.

Kenya, on the other hand, is classified as a Lower Middle-Income Country and had to renegotiate and sign a new trade agreement with the UK by December 31, 2020, so that its goods to the UK market don’t not attract duty starting from January 1, 2021.

The Kenya-UK Trade agreement borrows a leaf from the European Union’s Economic Partnership Agreement that allows for the Principle of Variable Geometry where member states can sign the agreement at different time periods depending on their readiness.

The UK, which voted to leave the European Union in 2016, formally left the bloc in January 31 last year, with a transitional period of up to December 31, 2020 to negotiate new trade agreements with countries it was trading with under the EU terms.

During this time, all previous trade deals it signed with countries including Kenya, through the EU, will continue as normal until the transition is over.