Kenya risks AU wrath as it seeks solo deal with America
Kenya has broken ranks with other African countries as it pushes for a bilateral trade agreement with the US.
The move, analysts reckon, could cause a diplomatic headache for East Africa’s leading economy.
President Uhuru Kenyatta is set to fly to Washington next week where, according to a Bloomberg report, the two countries will announce negotiations on a trade pact that will form a model for other African countries.
Foreign Affairs Principal Secretary Macharia Kamau told Bloomberg that the two nations expect real progress on an agreement by the third quarter of this year, depending on how the negotiations go.
This comes even as the African Union (AU) is pushing to have a continent-wide trade pact with the US instead of individual bilateral deals once the Africa Growth Opportunities Act (Agoa) lapses in 2025.
AU Commissioner for Trade Albert Muchanga last year said the AU would opt for a continent-wide trade deal with the US, with the much-anticipated African Continental Free Trade Area (AfCTA) billed as the best bet.
“Fragmentation in Africa brings with it small economies, small markets, un-competitiveness and a host of other weaknesses, which make African economies fail to grow at rates high enough to reduce poverty and overcome the underdevelopment trap that they find themselves in,” said Ambassador Muchanga at the Africa Business Summit in Chicago.“
With this structural weakness, our countries are also vulnerable to manipulation, politically and commercially,” he added. And according to the Institute of Economic Affairs Chief Executive Kwame Owino, Kenya going it alone sets the pace for the continent’s future engagement with the US.
“The Agoa was not going to last forever, and as much as the AU would have wanted a continent-wide agreement, this deal could serve as a model replacement that other countries can later join,” he said.“It is, however, a lost opportunity for the East African Community (EAC) as a regional bloc.”
Mr Owino said EAC’s strength as a trading bloc had waned, with diplomatic tiffs among member states weakening ties drastically.
The negotiations between Kenya and the US come at a time when trade between the two countries has remained flat, with Kenya exporting Sh47.2 billion worth of goods to the US in 2017 and Sh47.3 billion in 2018.In the recent past, however, the US has stepped up its charm offensive on Kenya as it looks to hedge China’s growing economic influence in the region.
The latest development came as the American Chamber of Commerce (AmCham) yesterday faulted the Kenyan government for reneging on promises to ease bilateral trade.
“Unpredictable, excessive taxation inhibits businesses on accelerating reinvestment needed for growth in output and job creation,” said AmCham Board President Phillipine Mtikitiki during the lobby’s 2020 Economic Outlook forum in Nairobi.
Read related news articles
USTR releases summaries from US – Kenya Strategic Trade and Investment Partnership negotiations
Consistent with the Biden-Harris Administration’s commitment to the highest levels of transparency in trade agreement negotiations, the Office of the United States Trade Representative (USTR) today released summaries of texts proposed by the U.S. side on good regulatory practices, workers’ rights and protections, and a second tranche of agriculture text. Negotiations on these texts are ongoing. USTR will negotiate the workers’...
08 April 2024
Kenya: 4th AmCham business summit to advocate for enhanced partnership and investment In US-East Africa trade
The fourth edition of the regional American Chamber of Commerce Kenya (AmCham) Business Summit, the premier platform for strengthening bilateral trade and investment between the United States, Kenya, and East Africa is set to be held on April 24–25, 2024, in Nairobi, Kenya. Kenya’s President William Ruto is confirmed as Chief Guest, leading a government delegation to the summit that aims to expand commercial opportunities and markets....
19 March 2024
US-Kenya: Ruto’s US state visit needs to navigate America’s uncertain political future
President William Ruto will visit the United States on a State Visit in May during what is likely to be one of the most turbulent US elections in memory. Barring some miracle, or catastrophe, the US presidential election will be a showdown between the same two contenders—albeit older and less energetic—as in 2020. The US presidential election in November is the most significant geopolitical risk event of 2024. Its outcome could result in...
26 February 2024
US President Biden to welcome Kenyan President Ruto to the White House in May
President Joe Biden plans to welcome Kenyan President William Ruto to the White House in May, hosting a state visit after reneging on his promise to visit Africa last year. White House press secretary Karine Jean-Pierre said Friday that the visit set for May 23 will mark the 60th anniversary of U.S.-Kenya diplomatic relations and "celebrate a partnership that is delivering for the people" of both countries while affirming "our strategic...
18 February 2024
US keen to strengthen Kenya’s public procurement system as trade talks resume [incl. Readout]
The US plans to strengthen Kenya’s public procurement systems in what is seen as a strategy to put in place sound structures ahead of the planned trade pact. This comes as talks on the Strategic Trade and Investment Partnership (STIP) resumed last week with a meeting in Nairobi. Kenya is pushing for the deal and renewal of the African Growth and Opportunity Act (AGOA) which expires next year. Washington in a statement on Tuesday said the...
07 February 2024
'Nigeria missing as Kenya, Ghana tap AGOA opportunities to boost foreign exchange earnings'
Africa’s biggest economy is still failing to tap the opportunities that the African Growth and Opportunity Act (AGOA) present to boost its foreign exchange, amid acute dollar shortages. The AGOA has been on for over twenty-three years as it was enacted in 2020. In 2015, the program was modernised and extended to 2025, implying that there are only about 15 months before the window closes. Some countries have taken advantage of the AGOA more...
05 February 2024
US officials to fast-track talks on Kenya-US Strategic Trade and Investment Partnership (STIP)
US authorities will expedite negotiations on the Kenya-US Strategic Trade and Investment Partnership (STIP) and consider extending the African Growth and Opportunity Act (AGOA) beyond its expiry next year. Prime Cabinet Secretary and Cabinet Secretary for Foreign and Diaspora Affairs Musalia Mudavadi who spoke after a meeting with US Secretary for State Mr Tony Blinken said these initiatives will facilitate expanded duty and quota-free access...
02 February 2024
Kenya, US trade talks resume in Nairobi, go for common ground
The third round of the Strategic Trade and Investment Partnership (STIP) negotiations between Kenya and the United States opened in Nairobi yesterday. Investment, Trade and Industry Cabinet Secretary Rebecca Miano said Kenya’s delegation is being led by Trade Principal Secretary Alfred K’Ombudo. The main agenda items for the meeting which wraps up tomorrow revolve around agriculture, good regulatory practices, and workers’ rights...
30 January 2024
Kenya, US talks shift to agriculture
Kenya and the United States are set to begin talks on contentious clauses in a proposed bilateral trade deal amid fears the agreement could flood the market with cheap agricultural imports from America. The delayed third in-person round of talks will focus on agriculture, good regulatory practices and workers’ rights and protections, according to a statement from the US Trade Representative Office (USTR). The three-day negotiations...
27 January 2024
Kenya-US far from trade deal as year ends
Kenya’s hopes of concluding a trade deal with the US by end of this year seem unlikely pushing the long draw talks into next year. The Kenyan government had in March this year expressed optimism of sealing a deal before the year ends, in its quest to secure preferential trade terms way before the expiry of the African Growth and Opportunity Act (AGOA), in September 2025. Kenya and the US have held three rounds of in-person negotiations...
21 December 2023
Exploring synergies between AGOA and AfCFTA: The case for African exports
Africa is often characterised as a continent poised for economic growth and development. Often, prosperity and development in Africa can be linked back to exports and the benefits that they generate. This brings to the forefront the African Growth and Opportunity Act (AGOA) and its role in opening American markets to 35 African countries, as well as the African Continental Free Trade Area (AfCFTA), which aims to increase socio-economic...
09 November 2023