'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
Thursday, 29 October 2020 ~ 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that will bring our relationship from a reliance on tariff preferences that erode over time and can be unilaterally withdrawn to an agreement that drives more efficient uses of resources and expands trade.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.

View related news articles

'The opportunities are vast in a potential US-Kenya FTA'

Last year, the U.S. and Kenya announced the launch of free trade negotiations, the first of its kind between the U.S. and a sub-Saharan Africa country. If successful, it would be the most significant trade development in the region since the enactment of the African Growth and Opportunity Act (AGOA) trade preference program in 2000. To better understand the key issues surrounding FTA negotiations, the U.S. Chamber’s U.S.-Africa Business...

06 May 2021

Report: A look at the potential benefits and challenges of a US – Kenya trade agreement

The American Chamber of Commerce (AmCham) Kenya has partnered with the U.S. Africa Business Centre (USAfBC) and Covington to publish a business trade report. The report, titled US-Kenya Trade Negotiations: Implications for the Future of the U.S.-Africa Trade Relationship, examines the challenges and benefits of a potential free trade agreement (FTA) between the U.S. and Kenya. Speaking during the report launch, AmCham Kenya CEO,...

30 April 2021

Kenya: 'Uhuru–Blinken talks a breath of life to US trade deal'

Trade talks between Kenya and the US could resume soon following Tuesday's virtual meeting between President Uhuru Kenyatta and US Secretary of State Antony Blinken. This is after a five-month break occasioned by change of g-uard in the US as President Joe Biden took over from Donald Trump after last November’s elections. The settling down of the Biden administration put foreign trade negotiations and policies on hold, which included...

29 April 2021

'Hope for Kenya-US trade deal as talks resume'

Kenya and the United States have resumed talks on the Free Trade Agreement (FTA) ongoing since last year. Kenya's Trade Cabinet Secretary Betty Maina and US Trade representative Katherine Tai held talks that focussed on the importance of the trade relations between Kenya and Africa as important partners to the US. The bilateral trade talks paused in the wake of American presidential elections last November. A change of guard at the White...

08 April 2021

'Biden Administration dampens Kenya's hopes for bilateral trade deal'

The Biden administration's plans to review foreign trade policy and refocus it on America's economic recovery have thrown long-running free trade negotiations with Kenya into disarray. In a development that casts doubts on the future of a bilateral free trade agreement (FTA) with Kenya, United States Trade Representative Katherine Tai has informed Kenyan Minister of Industrialization, Trade and Enterprise Development Betty Maina of...

05 April 2021

US Chamber drives for Kenya-US trade deal

The United States Chamber of Commerce has urged President Joe Biden to seal a new trade deal with Kenya, which was initiated by his predecessor Donald Trump. The biggest and most influential US business lobby group wants the ongoing negotiations for a free trade agreement (FTA) between the two nations concluded fast to pave the way for uptake of business and investment opportunities. “The Chamber supports the negotiation of a high-standard...

02 February 2021

Kenya–US trade talks on hold, awaits Biden's administration

Kenya hopes to resume trade talks with the US after change of guard at the White House with President-elect Joe Biden's inauguration on Wednesday.  The country is optimistic of speedy resumption of negotiations, with hopes the Biden administration will warm up to Africa, and Kenya as an investment destination and trade partner. The negotiations for a Free Trade Agreement (FTA) which commenced on July 8, last year,  stalled due to...

21 January 2021

'Uncertainty around Kenya-US Free trade deal'

A cloud of uncertainty has engulfed Kenya’s pursuit of a free trade agreement (FTA) with the United States due to the impending change of guard at the White House.  Even before he takes office, President-elect Joe Biden has sent strong indications of plans to annul many of President Donald Trump’s policies, cutting across trade, environment and geopolitics - something that has Kenya on edge over the ongoing negotiations for a...

18 January 2021

Kenya exports to US climb to Sh67 billion

Kenyan exports to America under the Africa Growth Opportunities Act (AGOA) hit Sh67 billion last year, a marginal increase of 3.7 per cent from Sh64 billion recorded in the previous year. According to the latest report from the Office of the US Trade Representative, Kenya emerged the fourth exporter under Agoa, after Nigeria (Sh310 billion), South Africa (Sh200 billion) and Angola (Sh60 billion) in Africa. “Kenya is currently our 96th...

30 December 2020

Opinion: 'Kenya-US relations really do matter'

With the shadow of the bitterly contested American presidential elections looming over us, the past few weeks have seen much discussion on the relationship between Kenya and the US. The average American may not care much who gets to be the president of Kenya – indeed would generally have no idea of it, if there was a presidential election taking place in Kenya. But most Kenyans are very keen to see if this most unusual of American...

05 November 2020