New deal sets stage for Kenya, South Korea trade treaty

Kenya’s ambassador to South Korea Ngovi Kitau talks to a team of visiting legislators from Kenya who are seeking to boost investment and trade. Photo/Allan Odhiambo  Nation Media Group

By ALLAN ODHIAMBO

In Summary

• Kenya’s ambassador to South Korea Ngovi Kitau said negotiators from the two countries had agreed on a framework to guide trade and investment and hoped to sign a bilateral pact by September.
• The two countries have since last year intensified negotiation for favourable trade and investment ties amid increased business activity between them.

Kenya and South Korea have struck a tax and investment deal setting the stage for the signing of a comprehensive bilateral treaty that could boost trade between the two countries.

Kenya’s ambassador to South Korea Ngovi Kitau said negotiators from the two countries had agreed on a framework to guide trade and investment and hoped to sign a bilateral pact by September.

“We have a draft agreement on taxation and investment and what follows is the preparation of a Cabinet paper and requisite Bills to be presented to Parliament for approval,” Mr Kitau told a team of visiting legislators in Seoul, South Korea.

A delegation from the Treasury was last week in negotiations with their counterparts in South Korea in a bid to find a common ground on how future trade and investment ties between the countries will be conducted.

READ: Kenya eyes tax, investment deal with South Korea

“Once the approvals come through the countries would sign a bilateral agreement and move on,” Mr Kitau said without disclosing the details of the draft document.

The two countries have since last year intensified negotiation for favourable trade and investment ties amid increased business activity between them.

Korean electronics giant Samsung is among firms set to increase their investment in Kenya. It plans to open an electronic assembly plant in Kenya by end of year positioning Nairobi as the nerve centre of its operations in East Africa.

READ: Samsung gives Kenya its first TV, printers assembly plant

Many Korean companies, such as Hyundai and Doosan, have also invested in Kenya’s energy, transport, construction, manufacturing and service sectors.

Kenya is also eyeing knowledge transfer from Korea to help develop nuclear energy to supplement its electricity requirements. The Asian nation is already providing technical support to Kenya in the area.

Korea targets to train about 100 Kenyan professionals by the time the country adopts nuclear technology in early 2020s.

READ: Kenyans get South Korea nuclear scholarships

Buoyed by good business prospects, Korea in June 2012 began direct flights between its Incheon International Airport and Kenya’s Jomo Kenyatta International Airport, signalling its resolve for deeper ties.

“The draft outlines how matters such as double-taxation and investment would be handled favourably,” Mr Kitau said.