Kenya, US in rush to conclude free trade pact as Biden leaves

 

When outgoing US President Joe Biden held bilateral talks with President William Ruto at the White House, Washington, D.C on May 23, 2024. [PCS]

The outgoing Biden administration and the Ruto government are scrambling to conclude the much-delayed free trade agreement first inked during the Donald Trump era, The Standard has learned.

The two nations will conclude a seventh round of negotiations today (August 9) under the Strategic Trade and Investment Partnership (STIP) as the two countries aim to fast-track the deal.

 President Biden abandoned his re-election bid last month under growing pressure from his fellow Democrats and endorsed Vice President Kamala Harris as the party’s candidate to face Republican nominee Donald Trump in the November election.

The Biden delegation will be led by Assistant US Trade Representative Constance Hamilton, while Kenya’s delegation will be headed by Principal Secretary for Trade Alfred K’Ombudo, a joint statement said.

 The two sides will also hold a stakeholder listening session during the round, according to the statement. The US and Kenya launched the STIP in July 2022, aiming to increase investment, promote sustainable and inclusive economic growth, and support African regional economic integration. 

Economic ties

The long-delayed trade talks come at a time when the Biden administration has been stepping up its security and economic ties with East Africa’s largest ally in the face of rising Chinese influence in the region.

One of the biggest and most influential US business lobby groups and a top American lawmaker on trade have urged the Biden administration to fast-track the Trump-era trade talks with Kenya, piling pressure on Washington to conclude the negotiations.

They also want Washington to dialogue with Nairobi based on the original or initial proposed model of a free trade agreement with Kenya, which was initiated by Biden’s predecessor.

They say such a trade deal has many benefits not only for the US but also for Kenya and will pave the way for business and investment for American firms and their local counterparts

Kenya and the US formally launched negotiations in July 2020 for a bilateral trade pact that the two economies hoped could serve as a model for additional agreements across Africa.

The proposed free trade pact between Nairobi and Washington has however been beset by delays and uncertainty, casting doubt about the Biden administration’s commitment to concluding the deal.

 The Biden administration had earlier called for the objectives of the original bilateral pact signed under the Trump regime to be recast, with some of the objectives of the negotiations set by the Trump administration likely to be dropped.

The Biden administration has instead launched talks on an “investment partnership with Kenya” that seeks non-tariff ways to facilitate trade.

Psident Biden was looking to move “beyond the old model of free trade agreements and is more geared toward today’s economic realities and the lessons of the last 30 years,” his officials said earlier.

The US Chamber of Commerce President Suzanne Clark earlier lamented the lack of negotiations on free-trade deals by the US, saying free trade pacts such as the one proposed for Kenya free-trade are “better for allies, better for national security,” Clark was quoted saying.

“The US is being left behind. There are a lot of ‘Made in America’ goods that would like to get out there,” she said.

Kenya is looking to wrap up a fresh trade deal with the US before the expiry of the African Growth and Opportunity Act (Agoa).

 The Agoa pact allows Sub-Saharan African countries, including Kenya, to export thousands of products to the US without tariffs or quotas until 2025. 

 The push for a trade agreement with Kenya, which would be the first US free trade deal in sub-Saharan Africa, comes amid growing concern about China’s investments across the continent. This is as President Biden seeks to cut China’s share of global trade. American firms are also angling for a share of the potential GMO ( genetically modified organism) market in Kenya.

Washington has been pressuring Nairobi to allow access to its GM food and crop products recently, providing a huge market opportunity for American companies.

Kenya lifted a decades-old ban on GM crops in response to the worst drought to affect the East African region in 40 years, with authorities hoping it will improve crop yields and food security.

But the lifting of the ban has been met with scepticism from farmers and health crusaders.