The UK and Kenya signed an Economic Partnership Agreement (UK-Kenya EPA) on 8 December 2020. An economic partnership agreement, also referred to as a trade agreement, is a type of trade deal that promotes an increase in trade and investment between signatories.
The UK-Kenya EPA is based on an existing economic partnership agreement between the East African Community Partner States (EAC) and the EU member states. The EAC is made up of Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda. The existing agreement between the EAC and EU, known as the EAC-EU EPA, is not yet in force. The UK signed the EAC-EU EPA whilst it was an EU member state.
Following the UK’s departure from the EU, the Government is replicating, as far as possible, existing trade arrangements with existing partners. The UK-Kenya EPA is one of several agreements that the Government has created to maintain existing trade relationships. The agreement, whilst similar, is not identical to the EAC-EU EPA.
The UK-Kenya EPA has applied provisionally since 1 January 2021 but awaits ratification procedures by both countries.
What would the UK-Kenya EPA do?
The UK-Kenya EPA would govern the future trading relationship between the UK and Kenya.
The Government published guidance on how imports from and exports to Kenya would work under the agreement. This includes a UK commitment to provide duty-free and quota-free access into the UK market for Kenyan goods (other than arms and ammunition). There is also a commitment from Kenya to gradually reduce or remove tariffs for goods originating in the UK.
The Government’s original ambition was to negotiate an agreement with the EAC as a whole. However, as some states were not ready to begin negotiations, a bilateral agreement with Kenya was sought in the interim. Provisions have subsequently been included in the UK-Kenya EPA to enable other EAC states to accede the agreement in the future.
The Government published several documents alongside the UK-Kenya EPA:
- Explanatory memorandum: This includes the policy considerations behind the agreement. For example, before the end of the UK-EU transition period, Kenya had duty-free and quota free access to the UK’s market due to the EU’s Market Access Regulation (MAR). However, the UK has not introduced a domestic version of the MAR since the end of the transition period. This means that without a trade agreement or other measures in place, Kenya would face an increase in tariffs. The Government believes that the UK-Kenya EPA would ensure continuity of trade between both countries.
- Report to Parliament by the Department for International Trade: Amongst other things, this provides an explanation of the differences between the UK-Kenya EPA and the EAC-EU EPA. Differences include the removal or replacement of references made to the European Union and EU treaties in the UK-Kenya EPA. The report also details the economic impact of the agreement and implications if the agreement is not brought into force. Implications include the introduction of tariffs on UK imports from Kenya and a loss of access to future preferential tariff rates for UK exporters.
- Memorandum of understanding: This included an understanding that domestic procedures required to implement the UK-Kenya EPA would not be in place by the end of the transition period. However, both countries acknowledged that the agreement would still be treated as having effect from this date.
Before the agreement was signed, the Department for International Trade carried out a “programme of engagement” with stakeholders. This included giving progress updates and “town hall” style meetings, amongst other things. The Government also consulted with the devolved administrations, crown dependencies and Gibraltar.
Scrutiny of the UK-Kenya EPA
The House of Lords International Agreements Committee considered the UK-Kenya EPA on 1 February 2021. It drew the agreement to the special attention of the House.
The committee noted the agreement’s focus on development, providing Kenya with duty-free and quota-free access to the UK market in return for a phased liberalisation of certain UK goods into the Kenyan market.
However, concerns were raised about the potential impact of the agreement on the EAC. The committee referred to “disruptive political and economic impacts” caused to the EAC during the UK and Kenya Governments’ negotiations. It said that other EAC countries had opposed the bilateral agreement between the UK and Kenya and wanted to renegotiate a future deal as one EAC trading bloc. Concerns were also raised by some civil society groups that the UK-Kenya EPA could disrupt regional trade within the EAC and undermine regional integration.
The committee sought clarity on why, instead of introducing the new agreement, the Government had not replicated the EU Market Access Regulation system domestically. The committee called for further information about what other trading arrangements the Government had considered.
Governance and amendment arrangements under the UK-Kenya EPA were also questioned by the committee. The agreement states that an EPA Council would be the main governance body to consider any proposals of amendments to the agreement. The council would be established once the agreement entered into force and would comprise of ministerial representatives from both the UK and Kenya. The committee said that the wording and impact of this provision was unclear. It spoke of regret that the explanatory materials supplied by the Government did not specify which parts of the agreement could be amended without parliamentary scrutiny.
With reference to the Government’s consultations with Gibraltar, the crown dependencies and the devolved administrations, the committee also expressed concern. It said that the Government had only provided a limited amount of information about these discussions. Specifically, the committee wanted to know whether any concerns had been raised and, if so, what actions had been taken to address them.
Before the UK-Kenya EPA can enter into force, it must be signed and ratified by the UK and Kenya.
In the UK, the Constitutional Reform and Governance Act 2010 (CRAG) requires a treaty to be laid before Parliament before it can be ratified. Once laid, a scrutiny period of 21 sitting days will commence. This gives both Houses the chance to review its contents and, where necessary, object to ratification by passing a resolution before the end of the scrutiny period.
The Government formally laid the UK-Kenya EPA before Parliament on 17 December 2020. The CRAG scrutiny period was scheduled to end on 10 February 2021.
However, the House of Lords International Agreements Committee asked the Government to extend the 21-day scrutiny period to enable “proper scrutiny” of the agreement before ratification. The committee chair, Lord Goldsmith (Labour), tabled a motion on 2 February 2021 to resolve that the House call on the Government to extend the scrutiny period by a further 21 days.
On 10 February 2021, Lord Grimstone of Boscobel, the Minister of State for the Department for International Trade, said that the Government supported parliamentary scrutiny of trade agreements and would therefore facilitate a debate in Parliament on the UK-Kenya EPA “in the weeks ahead”.
The House of Lords is due to debate the agreement on 2 March 2021. No formal debate has been scheduled in the House of Commons.
In Kenya, it has recently been reported that ratification of the agreement has been delayed following procedural concerns raised by members of parliament in the Kenyan National Assembly. Officials have been accused of breaching standing orders by including documents that had not previously been authorised by the Speaker and tabled in Parliament.
- House of Lords International Agreements Committee, ‘Letter to the Minister of State for the Department for International Trade’, 4 February 2021
- Grant Thornton, UK Kenya Economic Partnership Agreement, 2020
Cover image by www.slon.pics on Freepik.