Agoa.info - African Growth and Opportunity Act
TRALAC - Trade Law Centre
You are here: Home/News/Article/'From AGOA to FTA - Kenya-US ties growing from strength to strength'

'From AGOA to FTA - Kenya-US ties growing from strength to strength'

'From AGOA to FTA - Kenya-US ties growing from strength to strength'
Published date:
Thursday, 29 October 2020
Author:
Kyle McCarter

[Opinion] The 56-year-old United States-Kenya relationship flourishes because we trust each other, respect each other and our nations share common values.

Both believe in a strong economy through an open, free marketplace allowing entrepreneurs, businesses and the private sector to thrive and create jobs.

The African Growth and Opportunity Act (AGOA) enhanced markets, allowing Kenyan businesses to grow.

Agoa will expire in 2025 and, while helpful, it has not been transformative in driving the broad-based economic growth Kenya seeks.

Hence, a United States-Kenya Free Trade Agreement (FTA) that will bring our relationship from a reliance on tariff preferences that erode over time and can be unilaterally withdrawn to an agreement that drives more efficient uses of resources and expands trade.

While Kenyans hear a lot about the ongoing FTA negotiations, not all of it reflects reality. Many thoughtful Kenyans and Americans are engaged in these negotiations and recognise the FTA's importance.

>> Also see: Kenya-US FTA Section on AGOA.info

 

Economic powerhouse

Unfortunately, the negotiators are not the ones speaking publicly about the talks' progress, leading to some unfruitful conversations.

Kenya is East Africa's economic powerhouse; it makes sense that the US would look to such a partner for the first modern FTA in the region. To do that, we must look beyond Agoa to negotiate an agreement that will spur economic growth throughout East Africa. The first round of negotiations began on July 8 and the second this month.

For full transparency, the US published its FTA negotiating positions online. Agreeing on a comprehensive, modern FTA is a negotiation, not an ultimatum, as our experience negotiating 14 FTAs covering 20 countries of all sizes has shown. This is about America first and Kenya first -- a win-win deal.

Some have asked why an FTA is needed when Agoa has worked so well. Under Agoa, Kenya's exports to the US increased six-fold from $110 million (Sh11 billion) in 2000 to $667 million last year. But Agoa was never intended to be permanent, and that uncertainty alone is enough to stifle investor interest.

A high-standard FTA covering topics like goods and services, agriculture, digital trade, foreign investment and anti-corruption will unlock greater trade, commercial and investment opportunities beyond Agoa's. Our goal is to complete one before Agoa expires.

An FTA would support Kenya's "Big Four Agenda" and drive investment and the small- and medium-sized businesses (SMEs) that form the backbone of its economy.

It would allow Kenyan and American businesses to benefit from increased access to each other's markets and our consumers to enjoy expanded choice, lower prices, and higher quality - all while preserving access to US markets.

We have also heard concerns about environmental issues. Our published position is that the US recognises the sovereign right of Kenya to establish its own levels of domestic environmental protection.

Furthermore, the US would seek FTA provisions that provide for, and encourage, high levels of environmental protection. This applies equally to plastic bags, marine litter and recycling.

Free trade agreement

The US and Kenya are equals. Nevertheless, to take its seat as the rightful economic leader in the region, Kenya faces challenges.

A free trade agreement is exactly that -- free trade, not protectionism. It will make Kenya more competitive and stronger economically. Closed markets, corruption and other restrictions stifle and weaken Kenya's economy, limiting innovation and progress.

By partnering with US firms and economy -- the largest -- Kenyan companies will become more competitive across Africa and globally. It will also encourage transparency.

This will provide Kenya with access to new markets , increase consumer choice, improve efficiencies and regain market share in the EAC lost to Asian competitors.

An FTA will raise governance standards; upgrade consumer and product testing and standards; and enhance product quality. Combining investments in innovation with trained youth will launch the economy to new heights.

Read related news articles

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

Kenya-US to deepen ICT, apparel and agriculture trade

Kenya and United States are in talks to identify areas of interest in information communication technology (ICT) sector that can interest US firms.  A meeting between The US Ambassador to Kenya, Megan Whitman, and the Cabinet Secretary for Investments, Trade, and Industry Rebecca Miano, the states sought cooperation in six key areas. The meeting laid the groundwork for an enhanced collaboration between Kenya and the United States in...

09 November 2023

Optimism as Kenya-US trade deal enters 3rd round of negotiations

Trade negotiations between Kenya and the United States entered the third round last week, with four items listed for negotiations. The Kenya-US Strategic Trade and Investment Partnership (STIP) negotiations, held from October 4-7 in Washington DC, covered agriculture and sanitary and phytosanitary measures, services, domestic regulations, anti-corruption; and women, youth among others. The Kenyan trade team also held discussions with...

16 October 2023

Kenya President Ruto joins US-Kenya business roadshow in San Francisco

Kenya's President William Ruto will address leading US technology companies and investors on Friday at the US-Kenya Business Roadshow in San Francisco organised by the American government’s Prosper Africa initiative. The roadshow - also co-organised by the US Embassy in Nairobi - highlights the business and investment potential in Kenya’s booming tech sector, a statement from the US Embassy in Kenya said. The event is part of a...

15 September 2023

You are here: Home/News/Article/'From AGOA to FTA - Kenya-US ties growing from strength to strength'