President Uhuru presides over Kenya-US free trade launch

NAIROBI, KENYA: Kenya and the United States of America have kicked off Free Trade agreement negotiations in a virtual launch witnessed by President Uhuru Kenyatta.

Kenya was represented at the launch by Trade CS Betty Maina, Interior CS Dr. Fred Matiang’i, and State House Deputy Chief of Staff for Strategy Ms. Ruth Kagia while the US delegation was led by the country's Trade Representative Amb. Robert Lighthizer.

In February, Kenya and the US announced the two countries are seeking a free trade agreement (FTA) that will be used as a model for similar deals between America and other African countries.

According to the Ministry of Industrialisation and Trade, the Kenya-US FTA will replace the Africa Growth and Opportunities Act (Agoa) which is set to expire in 2025.

Agoa was signed by US President Bill Clinton as a 15-year trade pact allowing exporters from Africa and several other developing countries duty-free access to the US market.

President Obama extended it to 2025 during his visit to Kenya in 2015.

In the proposed objectives guiding the negotiations, Kenya says the new deal will be compatible with the World Trade Organisation framework.
It respects commitments Kenya has made with trading blocs such as Comesa and the East Africa Community (EAC).
On Tuesday Scott Eisner, president of the U.S.-Africa Business Center at the U.S. Chamber of Commerce applauded the U.S. and Kenyan governments for their commitment to expanding trade and investment opportunities between our two countries.

He said a deepening U.S.-Kenya commercial relationship will benefit the U.S., Kenya, and the entire African continent.

“It is our hope that when complete, the agreement will not only be the first of its kind between the U.S. and a sub-Saharan African country but also lay the groundwork to strengthen and deepen our relationships with economies across the continent by providing the necessary legal protections and enduring, reciprocal trade.”

He noted that with the African Growth and Opportunity Act set to expire in 2025, a Kenya free trade agreement will provide American businesses the certainty they need to continue investing in its growing market. The deal also stands to boost the long-term economic outlook for both countries.

“The Chamber supports the administration’s efforts to expand opportunities for American companies in key markets across the African continent and fully supports the pursuit of a comprehensive, high-standard trade agreement with Kenya. We look forward to building support for our member’s priorities through our U.S.-Kenya Trade Working Group and working with members of Congress on both sides of the aisle to bring this deal to fruition.”

Meanwhile, Standard Newspaper on Wednesday reported opposition to the trade deal by various organisations drawn from across Africa.

Several trade lobby groups from Kenya, Nigeria, Uganda, Rwanda, and Tanzania have written to the government, voicing their opposition to the proposed trade deal.

They argue the deal will stifle the growth of local industries and lead to the dumping of cheap US imports in the region.
“The agreement portends the danger of crippling sectors such as agriculture and manufacturing and disintegrating of the Kenyan economy,” states the letter signed by the 27 lobby groups.

They include the National Association of Nigerian Traders, Econews Africa, West African Institute for Trade and Agricultural Development, Kenya Human Rights Commission, Haki Madini Tanzania, and the Centre for Trade Policy and Development.

Other signatories include the South Sudan Human Rights Society for Advocacy, Third World Network Africa, Tax Justice Network Africa, and ADIR Burundi.

On Wednesday after the launch, trade ministers for the two countries, Betty Maina and Robert Lighthizer said they were holding an initial round of talks virtually over the next two weeks due to the coronavirus.

Kenya wants to do a deal with Washington before the expiry of the Africa Growth and Opportunity Act (AGOA), which allows sub-Saharan African states to export thousands of products to the United States without tariffs or quotas until 2025.

“We believe this agreement with Kenya will complement Africa’s regional integration efforts, including in the East African Community and the landmark African Continental Free Trade Area...” Maina and Lighthizer said.

Two-way goods trade between the United States and Kenya totaled over Sh100 billion in 2019, up 4.9 per cent from 2018.

Additional reporting by Reuters