Title
ECONOMIC PARTNERSHIP AGREEMENT BETWEEN THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND, OF THE ONE PART, AND THE REPUBLIC OF KENYA, A MEMBER OF THE EAST AFRICAN COMMUNITY, OF THE OTHER PART
Preamble
PARTIES TO THE AGREEMENT
THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND (hereinafter referred to as the "United Kingdom" or the "UK"), of the one part, and
THE REPUBLIC OF KENYA (hereinafter referred to as the "EAC Partner State(s)"), of the other part
RECALLING their commitments within the framework of the Marrakesh Agreement Establishing the World Trade Organization (WTO), done at Marrakesh on 15 April 1994, hereinafter referred to as the "WTO Agreement";
HAVING REGARD TO the Agreement establishing the African, Caribbean and Pacific (ACP) Group of States, signed in Georgetown on 6 June 1975 and amended in 2003 (the Georgetown Agreement) and to the revised Georgetown Agreement, endorsed by ACP Heads of State and Government in Nairobi, in December 2019, which established the Organisation of African Caribbean and Pacific States;
HAVING REGARD TO The Treaty for the Establishment of the East African Community (EAC) signed in Arusha on 30 November 1999, and its Protocol on the Establishment of the East African Community Customs Union;
REITERATING their desire for a wider unity of Africa and the achievement of the objectives of The Treaty for the Establishment of the East African Community;
CONSIDERING that the EAC Partner State(s) and the UK have agreed that their trade and economic cooperation shall aim at fostering the smooth and gradual integration of the ACP states into the world economy with due regard to their political choices, levels of development and development priorities, thereby promoting their sustainable development and contributing to poverty eradication in the EAC Partner State(s);
REAFFIRMING also that the Economic Partnership Agreement (EPA) shall be consistent with the objectives and principles of the Joint Statement of the Parties on the Objectives and Essential and Fundamental Elements of this Agreement as set out at Annex III;
REAFFIRMING that the EPA shall serve as an instrument of development and shall promote sustained growth, increase the production and supply-side capacity of the EAC Partner State(s), foster structural transformation of the EAC Partner State(s)' economies and their diversification and competitiveness and lead to the development of trade, the attraction of investment, technology and the creation of employment in the EAC Partner State(s);
REITERATING the need to ensure that particular emphasis shall be placed on regional integration and the provision of special and differential treatment to all EAC Partner States, while maintaining special treatment for least developed EAC Partner States;
RECOGNISING that substantial investment is required to uplift the standards of living of the EAC Partner State(s);
RECOGNISING that UK development cooperation in support of this Agreement shall continue to be guided by the internationally agreed aid effectiveness agenda and assessment of a government's commitment to the UK Partnership Principles, reducing poverty and achieving the Sustainable Development Goals; that UK development cooperation takes the form of financial and non-financial support; and that financial resources may be provided through a range of forms and means, including assistance provided through multilateral and regional organisations.
HAVE AGREED AS FOLLOWS:
Body
Part I. GENERAL PROVISIONS
Article 1. Scope of the Agreement
The Parties hereby establish an EPA, that covers:
(a) General Provisions;
(b) Trade in Goods;
(c) Fisheries;
(d) Agriculture;
(e) Economic and Development Cooperation;
(f) Institutional Provisions;
(g) Dispute Avoidance and Settlement;
(h) General Exceptions;
(i) General and Final Provisions; and
(j) Annexes and Protocols to the above.
Article 2. Objectives
1. The objectives of this Agreement are to:
(a) contribute to economic growth and development through the establishment of a strengthened and strategic trade and development partnership consistent with the objective of sustainable development and in accordance with Article 75;
(b) promote regional integration, economic cooperation and good governance in the EAC;
(c) promote the gradual integration of the EAC into the world economy, in conformity with its political choices and development priorities;
(d) foster the structural transformation of EAC economies, and their diversification and competitiveness by enhancing their production, supply and trading capacity;
(e) improve EAC capacity in trade policy and trade-related issues;
(f) establish and implement an effective, predictable and transparent regional regulatory framework for trade and investment in the EAC Partner State(s), thus supporting the conditions for increasing investment, and private sector initiative; and
(g) strengthen the existing relations between the Parties on the basis of solidarity and mutual interest. To this end, consistent with their WTO rights and obligations, this Agreement shall enhance commercial and economic relations, support a new trading dynamic between the Parties by means of the progressive, asymmetrical liberalisation of trade between them and reinforce, broaden and deepen cooperation in all areas relevant to trade and investment.
2. This Agreement also aims to:
(a) establish an agreement consistent with Article XXIV of the General Agreement on Tariffs and Trade 1994 (GATT 1994);
(b) facilitate continuation of trade by the EAC Partner State(s) through economic and trade cooperation in accordance with the objectives set out in Annex III; and
(c) establish the framework and scope of potential negotiation in relation to other issues including trade in services, trade-related issues and any other areas of interest to both Parties.
Article 3. Rendez-vous Clause
The Parties undertake to conclude the negotiations in the subject matters listed below, within five (5) years upon entry into force of this Agreement:
(a) trade in services;
(b) trade related issues namely:
(i) competition policy;
(ii) investment and private sector development;
(ii) trade, environment and sustainable development;
(iv) intellectual property rights; and
(v) transparency in public procurement;
(c) any other areas that the Parties may agree upon.
Article 4. Principles
This Agreement is based on the following principles:
(a) the essential and fundamental elements of this Agreement, as jointly stated by the Parties in Annex III;
(b) strengthening integration in the EAC Region;
(c) ensuring asymmetry, in favour of the EAC Partner State(s), in the liberalisation of trade and in the application of trade-related measures and trade defence instruments;
(d) allowing the EAC Partner State(s) to maintain regional preferences with other African countries and regions without an obligation to extend them to the UK; and
(e) contributing to enhance the production, supply and trading capacities of the EAC Partner State(s).
Part II. TRADE IN GOODS
Article 5. Scope and Objectives
1. The provisions of this Part shall apply to all goods originating in the UK and the EAC Partner State(s).
2. The objectives in the area of trade in goods are to:
(a) provide full duty-free and quota-free market access conditions for goods originating in the EAC Partner State(s) into the market of the UK on a secure, long-term and predictable basis in accordance with the modalities established in this Agreement;
(b) liberalise progressively and gradually the EAC Partner State(s)' markets for goods originating from the UK in accordance with the modalities established in this Agreement; and
(c) preserve and improve market access conditions to ensure that the EAC Partner State(s) fully benefit from the EPA.
Title I. CUSTOMS DUTIES AND FREE MOVEMENT OF GOODS
Article 6. Customs Duty
1. A customs duty shall include any duty or charge of any kind imposed on or in connection with the importation of goods and any form of surtax or surcharge in connection with such importation, but shall not include:
(a) charges equivalent to internal taxes levied on both imported and locally produced goods consistent with the provisions of Article 20;
(b) anti-dumping, countervailing or safeguard measures applied in accordance with the provisions of Title VI; and
(c) fees or other charges imposed in accordance with the provisions of Article 8.
2. The basic customs duty to which the successive reductions are to be applied shall be that specified in each Party's tariff schedule for each product.
Article 7. Classification of Goods
1. The classification of goods in trade covered by this Agreement shall be that set out in each Party's respective tariff nomenclature in conformity with the International Convention in the Harmonised Commodity Description and Coding System (HS).
2. The Parties shall exchange all necessary information, within a period of three months after a tariff modification or a change in the HS, in respect of their applied customs duties and the corresponding nomenclatures with those products listed in Annexes I and I.
Article 8. Fees and other Charges
Fees and other charges referred to in Article 6(c) shall be limited in amount to the approximate cost of services rendered and shall not represent an indirect protection for domestic products or a taxation of imports for fiscal purposes. Trade-related fees and charges shall not be imposed for consular services.
Article 9. Rules of Origin
For the purposes of this Part, the term "originating" means qualifying under the rules of origin set out in Protocol 1 to this Agreement.
Article 10. Customs Duties on Products Originating In the EAC Partner State(s)
Products originating in the EAC Partner State(s) shall be imported into the UK free of customs duties, under the conditions set out in Annex I.
Article 11. Customs Duties on Products Originating In the UK
Products originating in the UK shall be imported into the EAC Partner State(s) under the conditions set out in the schedule of tariff liberalisation in Annex II.
Article 12. Standstill
1. The Parties agree not to increase their applied customs duties for products subject to liberalisation under this Agreement, with the exception of measures adopted according to Articles 48, 49 and 50.
2. In order to preserve the prospect for the wider African regional integration processes, the Parties may decide, in the EPA Council, to modify the level of customs duties stipulated in Annexes H(a), I(b) and II(c), which may be applied to a product originating in the UK upon its importation into the EAC Partner State(s). The Parties shall ensure that any such modification does not result in an incompatibility of this Agreement with the requirements of Article XXIV of GATT 1994.
Article 13. Movement of Goods
1. Customs duties shall be imposed once for goods originating in one Party imported into the territory of the other Party.
2. Any duty paid upon importation into an EAC Partner State shall be refunded fully for the goods that leave the EAC Partner State of first importation to another EAC Partner State. The duty shall be paid in the EAC Partner State of consumption of the goods.
3. The Parties agree on cooperation to facilitate the movement of goods and simplify customs procedures.
Article 14. Export Duties and Taxes
1. A Party shall not institute any new duties or taxes in connection with the exportation of goods to the other Party that are in excess of those imposed on like products destined for internal sale.
2. Notwithstanding paragraph 1, the EAC Partner State(s) can impose, after notifying the UK, a temporary duty or tax in connection with the exportation of goods under the following circumstances:
(a) to foster the development of domestic industry;
(b) to maintain currency stability, when the increase in the world price of an export commodity creates the risk of a currency overvaluation; or
(c) to protect revenue, food security and environment.
3. Such taxes should be enforced on a limited number of products for a limited period of time and shall be reviewed by the EPA Council for renewal after 48 months.
4. Any more favourable treatment consisting in or in relation to taxes applied by the EAC Partner State(s) to exports of any products destined for any major trading economy shall, from the entry into force of this Agreement, be accorded to the like product destined for the territory of the UK.
5. For the purposes of Articles 14 and 15, "major trading economy" means any developed country, or any country accounting for a share of world merchandise exports above 1 percent in the year before the entry into force of the free trade agreement referred to in Article 15, or any group of countries acting individually, collectively or through a free trade agreement accounting collectively for a share of world merchandise exports above 1.5 percent in the year before the entry into force of the free trade agreement referred to in Article 15 (1).
Article 15. More Favourable Treatment Resulting from a Free Trade Agreement
1. With respect to the goods covered by this Part, the UK shall accord to the EAC Partner State(s) any more favourable treatment applicable as a result of the UK becoming party to a free trade agreement with a Third Party after the signature of this Agreement.
2. With respect to the goods covered by this Part, the EAC Partner State(s) shall accord to the UK any more favourable treatment applicable as a result of the EAC Partner State(s) becoming parties to a free trade agreement with any major trading economy after the signature of this Agreement. Provided that the UK can demonstrate that it has been given less favourable treatment than that offered by the EAC Partner State(s) to any other major trading economy, the Parties shall to the extent possible, consult and jointly decide on how best to implement the provisions of this paragraph on a case by case basis.
3. The provisions of this Part shall not be so construed as to oblige the Parties to extend reciprocally any preferential treatment applicable as a result of one of them being party to a free trade agreement with a Third Party on the date of signature of this Agreement.
4. The provisions of paragraph 2 shall not apply in respect of trade agreements between the EAC Partner State(s) with countries of the ACP Group, or other African countries and regions.
5. For the purposes of this Article, "free trade agreement" means an agreement substantially liberalising trade and substantially eliminating discriminatory measures and / or prohibiting new or more discriminatory measures among Parties at the entry into force of that agreement or within a reasonable time frame.
Article 16. Special Provisions on Administrative Cooperation
1. The Parties agree that administrative cooperation is essential for the implementation and control of the preferential treatment granted under this Part and underline their commitment to combat irregularities and fraud in customs and related matters.
2. Where a Party has made a finding, on the basis of objective information, of a failure to provide administrative cooperation and/or of irregularities or fraud, the Party concerned may temporarily suspend the relevant preferential treatment of the product(s) concerned in accordance with this Article.
3. For the purpose of this Article, a failure to provide administrative cooperation shall mean, inter alia:
(a) a repeated failure to respect the obligations to verify the originating status of the product(s) concerned;
(b) a repeated refusal or undue delay in carrying out and/or communicating the results of subsequent verification of the proof of origin;
(c) arepeated refusal or undue delay in obtaining authorisation to conduct administrative cooperation missions to verify the authenticity of documents or accuracy of information relevant to the granting of the preferential treatment in question.
4. A finding of irregularities or fraud may be made, inter alia, where there is a rapid increase, without satisfactory explanation, in imports of goods exceeding the usual level of production and export capacity of the other Party that is linked to objective information concerning irregularities or fraud.
5. The application of a temporary suspension shall be subject to the following conditions:
(a) The Party which has made a finding, on the basis of objective information, of a failure to provide administrative cooperation and/or of irregularities or fraud shall without undue delay notify the Committee of Senior Officials of its finding together with the objective information and enter into consultations within the Committee of Senior Officials, on the basis of all relevant information and objective findings, with a view to reaching a solution acceptable to both Parties.
(b) Where the Parties have entered into consultations within the Committee of Senior Officials as above and have failed to agree on an acceptable solution within three (3) months following the notification, the Party concerned may temporarily suspend the relevant preferential treatment of the product(s) concerned. A temporary suspension shall be notified to the EPA Council without undue delay.
(c) Temporary suspensions under this Article shall be limited to that necessary to protect the financial interests of the Party concerned. They shall not exceed a period of six (6) months, and may be renewed. They shall be subject to periodic consultations within the Committee of Senior Officials in particular with a view to their termination as soon as the conditions for their application no longer exist.
6. At the same time as the notification to the Committee of Senior Officials under paragraph 5(a) of this Article, the Party concerned should publish a notice to importers in its official journal. The notice to importers should indicate for the product concerned that there is a finding, on the basis of objective information, of a failure to provide administrative cooperation and/or of irregularities or fraud.
Article 17. Management of Administrative Errors
In case of error by the competent authorities in the proper management of the preferential system of export, and in particular in the application of the provisions of Protocol 1 concerning the definition of the concept of "originating products" and methods of administrative cooperation, where this error leads to consequences in terms of import duties, the Party facing such consequences may request the Committee of Senior Officials to examine the possibilities of adopting all appropriate measures with a view to resolving the situation.
Article 18. Customs Valuation
1. Article VII of GATT 1994 and the Agreement on the implementation of Article VII of GATT 1994 shall govern customs valuation rules applied to trade between the Parties.
2. The Parties shall cooperate with a view to reaching a common approach to issues relating to customs valuation.
Title II. NON-TARIFF MEASURES
Article 19. Prohibition of Quantitative Restrictions
1. All prohibitions or restrictions on the importation, exportation or sale for exports between the Parties, other than customs duties, taxes, fees and other charges provided for under Article 6, whether made effective through quotas, import or export licenses or other measures, shall be eliminated upon the entry into force of this Agreement. No new such measures shall be introduced in trade between the Parties. The provisions of this Article shall be without prejudice to the provisions of Title VI of this Part.
2. The provisions of paragraph 1 of this Article shall not extend to the following:
(a) Export prohibitions or restrictions temporarily applied to prevent or relieve critical shortages of foodstuffs or other products essential to the exporting contracting party;
(b) Import and export prohibitions or restrictions necessary to the application of standards or regulations for the classification, grading or marketing of commodities in international trade.
Article 20. National Treatment on Internal Taxation and Regulation
1. Imported products originating in one Party shall not be subject, either directly or indirectly, to internal taxes or other internal charges of any kind in excess of those applied, directly or indirectly, to like domestic products of the other Party. Moreover, the Parties shall not otherwise apply internal taxes or other internal charges so as to afford protection to their respective production.
2. Imported products originating in one Party shall be accorded treatment no less favourable than that accorded to like domestic products of the other Party in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use. The provisions of this paragraph shall not prevent the application of differential internal transportation charges, which are based exclusively on the economic operation of the means of transport and not on the origin of the product.
3. Neither Party shall establish or maintain any internal quantitative regulation relating to the mixture, processing or use of products in specified amounts or proportions which requires, directly or indirectly, that any specified amount or proportion of any product which is the subject of the regulation must be supplied from domestic sources. Moreover, neither Party shall apply internal quantitative regulations so as to afford protection to their respective production.
4. The provisions of this Article shall not prevent the payment of subsidies exclusively to national producers, including payments to national producers derived from the proceeds of internal taxes or charges applied consistently with the provisions of this Article and subsidies effected through governmental purchases of national products.
5. The provisions of this Article shall not apply to laws, regulations, procedures or practices governing public procurement.
Article 21. Good Governance In the Tax Area
The Parties recognise the importance of cooperation on the principles of good governance in the area of taxation through the relevant authorities in line with their respective national laws and regulations.
Title III. CUSTOMS COOPERATION AND TRADE FACILITATION
Article 22. Scope and Objectives
1. The Parties acknowledge the importance of customs cooperation and trade facilitation matters in the evolving global trading environment and agree:
(a) to reinforce cooperation and ensure that the relevant legislation and procedures, as well as the administrative capacity of the relevant administrations, fulfil the objective of promoting trade facilitation.
(b) that the EAC Partner State(s) need transitional periods of time and capacity building to smoothly implement the provisions of this Title.
2. The objectives of this Title are to: (a) facilitate trade between the Parties;
(b) promote harmonisation of customs legislation and procedures at regional level;
(c) provide support to the EAC Partner State(s) to strengthen trade facilitation;
(d) provide support to the EAC Partner State(s)' customs administrations to implement this agreement and other international customs best practices; and