Trade accord will offer post-virus boost for Kenya

President Uhuru Kenyatta is upbeat about trade talks between the US and Kenya. The Office of the United States Trade Representative has equally announced progress towards a free trade agreement. A first of its kind in sub-Saharan Africa, this deal promises to provide our economy with the much needed post-Covid-19 boost. 

The sectors likely to benefit most are agriculture and manufacturing, which together employ a significant portion of our population.

As is also known, these two sectors play central roles in the President’s Big Four agenda. The pending free trade agreement will provide preferential access for Kenyan goods exported to the US as well as US goods imported to Kenya. Additionally, the agreement is expected to draw significant investments from US companies seeking to set up operations in Kenya to better meet needs of the local market. 

This is particularly important in the fields of telecommunications and technology, both of which are part of sectors expected to benefit significantly. Attracting American multi-nationals in these arenas will undoubtedly have a positive impact on furthering connectivity in less developed parts of our country. 

Although free trade has traditionally been promoted by US officials, the “America First” policy of the Trump administration has meant that limited free trade deals are presently being signed. The current agreement was initiated during a February visit by Kenyatta to Washington DC. It was during this visit that the President emphasised the strategic nature of Kenyan-American cooperation, culminating in the formation of the US-Kenya Bilateral Strategic Dialogue and the upcoming free trade agreement. 

More than $1 billion dollars of trade already takes place between Kenya and the US each year. The potential for further growth is tremendous, considering that Kenya’s annual trade with another one of its major trading partners, China, currently exceeds $5 billion. 

Some have argued that trade with the US will necessarily come at the expense of our existing partnership with China. However, the ability to pursue trade deals with the US and China, particularly when tension between the two is simmering, is indicative of the government’s unique capacity for creative foreign policy. Some of the most heavily traded items between US and Kenya are manufactured goods such as textiles and plastics, as well as agriculture produce with an emphasis on tea, coffee, oils and nuts. Many of these goods, produced in our country, are already recognised brands in the global market. 

Coffee from plantations on the Aberdare Range and Kisii, consumed globally as proudly Kenyan product, is one such example. Greater entry into the US market will assist in further developing the brand recognition of Kenyan goods in the world’s largest single market. 

The US is traditionally selective about the countries with which it enters such agreements. This means Kenya’s status as a potential candidate should not be taken for granted. With only 20 free trade agreements currently in place, none of which are in Africa, our ability to secure trade on such preferential terms is significant. The overriding hope is that by initiating the first US free trade deal in Africa, Kenya stands to benefit from collaborations with other countries. 

US Trade Representative Robert Lighthizer paraphrased the potential from this trade deal for the continent when he said: “We look forward to negotiating and concluding a comprehensive, high-standard agreement with Kenya that can serve as a model for additional agreements across Africa”. Ultimately, more trade agreements similar to the one being brokered between Kenya and the US will lead to regional economic prosperity in a level never anticipated.

-The writer is development communications expert