The United Kingdom has protested Kenya’s impending ban on second-hand imports of buses and trucks, fearing the embargo will cut the flow of used commercial vehicles from the European country.
Betty Maina, the Industrialisation and Trade secretary, says the UK authorities are uncomfortable with the sanction on used vehicles, which was set to take effect from July 1 before it was frozen in court.
An escalation of the differences between Kenya and Britain could affect the flow of goods between the two nations.
Kenya and Britain inked a fresh trade deal in December 2020 allowing duty-free access of Kenyan goods to the UK market and avoid a post-Brexit disruption.
The protest will be handled by the Kenya-United Kingdom Economic Partnership Agreement (EPA) Council, Ms Maina said.
The EPA Council is made up of ministerial representatives from both countries tasked with ensuring smooth implementation of the trade deal, which came into force in March 2021, including ironing out trade disputes.
“The UK side has formally raised some queries on changes in regulations for used vehicles. That will become part of the discussions in the EPA Council,” Ms Maina told the Business Daily.
“That [EPA Council route] is a fairly normal instrument for review of export numbers and experiences between the two countries.”
The Kenya Bureau of Standards (Kebs) in April issued a notice freezing importation of used vehicles more than seven meters in length from July 2022.
Trucks with load capacities of 3.5 tonnes and above were also banned. Imports of tractor heads and prime movers not older than three years were allowed access until June 2023 after which only new units were to be allowed into Kenya.
The notice was, however, suspended by Justice Oscar Angote of the Environment and Land Court in early July, pending the determination of a petition by activist Okiya Omtatah — now senator-elect for Busia County.
The UK largely manufactures Leyland trucks, but a considerable number of second-hand Ford and Fiat (of Italy) prime mover trucks and Caterpillar construction and mining equipment are shipped into Kenya from the UK.
Used commercial vehicle dealers say supply gaps in the market and inconsistent policy in the East African Community (EAC) will shift the business to neighbouring countries as local players face closure.
They reckon that countries such as Uganda continue to allow imports of used commercial vehicles, which also operate in Kenya, adding that most European models of prime movers are not assembled locally.
Ms Maina did not give specific rules that the UK is concerned about, saying the issue was still at the technical stage and yet to be escalated to the ministerial level.
“It [EPA Council] is at a technical level. Things haven’t escalated to the ministerial level yet,” she said. “The technical groups are meeting on rules of procedure and how you will conduct yourselves.”
Kenya’s EPA Council, chaired by Ms Maina, has Attorney-General Kihara Kariuki as well as Cabinet Secretaries for the Treasury, East African Community (EAC) and Agriculture as members.
The powerful team, together with their UK counterparts, is responsible for the implementation as well as monitoring of the fulfilment of the objectives of the Kenya-UK trade pact.
Nairobi signed the strategic trade deal with London on behalf of the seven-nation East African Community (EAC) on December 8, 2020, before its coming into force on March 23, 2021, after ratification by respective parliaments.
The trade pact preserved duty- and quota-free access to the UK for Kenya’s largely agricultural produce such as cut flowers, coffee, tea, fruits and vegetables after Britain left the 27-member European Union trading bloc.
The deal, however, provides a window of seven years after ratification by the Kenyan and UK parliaments for non-agricultural goods from the UK to start enjoying preferential import duty.
The tariffs on UK products such as vehicles, machinery, boilers, printed books, paper and paperboard will gradually be phased down from the seventh to the 25th year when they will be abolished, except for sensitive imports which will continue to attract the applicable 25 percent duty.
The list of sensitive goods protected from competition from UK imports includes agricultural products, wines and spirits, textile and clothing, footwear and ceramic products.
Britain is one of Kenya’s most important trading partners, absorbing most of its tea, cut flower and fresh vegetable exports.
In return, it supplies machinery, cars, pharmaceuticals and electronics.
“The EAC partner state(s) may take safeguard measures… where a product originating in the UK as a result of reduction of duties is being imported into their territory in such increased quantities and such conditions as to cause or threaten to cause disturbances to an infant industry producing like or directly competitive products,” says the treaty.
“Such provision is only applicable for a period of 10 years from the date of entry into force of this Agreement. This period may be extended …for a maximum of five years.”
The trade deal document shows duty on the finished UK goods will be trimmed to 95 percent of the basic import tariff after 12 years, 80 percent after the 15th year, 50 percent after the 20th year, and 20 percent after the 23rd year, before being eliminated after 25 years.
On the other hand, duty on intermediate goods will be reduced to 80 percent of the basic tariff after seven years, 50 percent after 10 years and abolished after the 15th year.