Kenya, US negotiate new trade partnership as Agoa nears end

Investment, Trade and Industry CS Salim Mvurya(left) and Trade PS Alfred Kombudo addressing the media announcing the end term of the African Growth and Opportunity Act (AGOA) at his office in Nairobi on August 9, 2024 [Boniface Okendo, Standard]

As the African Growth and Opportunity Act (Agoa) approaches its expiration in 2025, the Kenyan government is actively negotiating new trade partnerships with the United States.

The discussions aim to extend and enhance trade relations between the two countries.

Investments, Trade, and Industry Cabinet Secretary Salim Mvurya Friday said the new agreements would strengthen and expand business opportunities between Kenya and the US.

The talks focus on a Strategic Trade and Investment Partnership (STIP), which includes multiple key areas such as agriculture, sanitary measures, customs procedures, climate change action, and digital trade regulations.

“The discussions encompass several key areas aimed at enhancing trade and investment between Kenya and the US. These include agricultural strategies, sanitary measures to ensure the safety of exported goods, and streamlined customs procedures to facilitate trade,” Mvuria said.

He said the partnership will address climate change action through cooperative efforts and improve the investment environment by refining service regulations and supporting micro, small, and medium-sized enterprises.

Another critical focus is aligning rules and regulations for digital trade to foster smoother and more integrated commerce.

The Kenyan delegation, led by State Department for Investment Promotion Principal Secretary Abubakar Hassan, met with officials from the US Trade Representative’s Office in Nairobi to advance the negotiations.

The goal of the STIP is to boost investment, promote sustainable economic growth, and support regional economic integration in Africa.

Agoa, a US trade law enacted in 2000, has provided qualifying Sub-Saharan African countries with duty-free access to the US market for certain goods.

Originally set to last from October 2000 to September 2008, it has been extended several times, with the latest extension running to September 2025.

Enhance trade relations

The new partnership is expected to build on the successes of Agoa and address various sectors, including support for micro, small, and medium-sized enterprises.

Mvurya emphasised that the initiative will play a crucial role in enhancing trade relations and economic cooperation between Kenya and the US.

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.

President 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.

[Additional reporting by Brian Ngugi]