The Institute of Export & International Trade signed an agreement on the 26th July in London with TradeMark East Africa (TMEA) to implement a ‘digital trade corridor’ between the UK and Kenya.
The initiative, called the ‘UK-Kenya Trade Logistics Information Pipeline’ (TLIP), aims to eliminate paperwork and introduce better visibility in the supply chains flowing between the UK and Kenya.
TLIP’s system uses blockchain technology to link all those in a supply chain to enable fast logistic clearance and easier trading.
TMEA is a not-for-profit organisation founded in 2010 to promote prosperity in Eastern and Southern Africa through increased trade.
Trade agreement backdrop
The creation of TLIP follows the trade agreement (Economic Partnership Agreement) signed in December 2020 between the UK and Kenya, setting out the two countries’ future trading relationship.
That agreement came after the inauguration in January 2020 of the ground-breaking AfCFTA free trade alliance between 54 of the African Union’s 55 countries, aimed at stimulating intra-Africa trade.
Cost and time reductions
Trade between the UK and Kenya has been growing, in both directions, for more than two decades. TMEA and IOE&IT believe that TLIP has the potential to further accelerate this growth through:
Reductions in:
- administrative procedures and time to import and export by at least 30%
- order turnaround times by up to 40%
- compliance costs by 20%
- duplication of steps in the trading process by as much as 50%
TLIP promises to cut costs for Kenyan firms producing goods like green vegetables and cut flowers for export to the UK, reducing prices for UK consumers, importers and retailers.
UK exporters will also be able to benefit from better access to one of Africa’s fastest growing markets.
Digital trade corridor first
TLIP is the first digital trade corridor to be established between the UK and a developing country since the UK’s exit from the European Union in 2020.
IOE&IT director general Marco Forgione said: “We’re proud to be partnering in the TLIP project. We believe it can deliver substantial benefits, not only to traders in the relevant supply chains, but also to the UK in terms of securing its position as a global leader in digital trade.
“Provisions to improve digital delivery are an increasingly important part of trade agreements – and it is initiatives like this that will make them succeed.”
TMEA chief executive, Frank Matsaert, said that TMEA was “excited to be expanding our homegrown digital solution and expanding TLIP to the UK which will create a transparent, efficient and cost-effective way of managing trade information to support and boost trade efficiency between the two countries.
“TLIP is also expected to support trade within the AfCFTA, growing trade within the continent and supporting global trade.”
TLIP’s ‘three engines’
TMEA and IOE&IT will collaborate on what the partners are calling TLIP’s ‘three engines’:
- A ‘Digital Engine’ based on distributed ledger technology (DLT) that supports trade transactions, manages cross border data flows and ensures traceability and the tracking of goods.
- An ‘Information Engine’ will provide a consolidated one-stop-shop for market and regulatory information needed by suppliers and buyers, and other intermediaries.
- A ‘Policy of Governance Engine’ will support the development of supplementary frameworks such as innovating trade instruments, procedures and processes as well as developing digital standards within the supply chains.
