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that will bring our relationship from a reliance on tariff preferences that erode over time and can be unilaterally withdrawn to an agreement that drives more efficient uses of resources and expands trade.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

View related news articles

US doesn't rule out more comprehensive trade negotiations with Kenya

The United States has not ruled out more comprehensive trade negotiations with Kenya after launching a strategic trade and investment partnership with the African country on Thursday, Deputy U.S. Trade Representative Sarah Bianchi told Reuters. Bianchi said U.S. trade officials viewed the agreement with Kenya as a potential model for other countries. Officials would focus in coming months on hammering out high-standard agreements in areas...

15 July 2022

House Ways and Means Chairman Neal applauds launch of US-Kenya partnership agreement negotiations

Today, House Ways and Means Committee Chairman Richard E. Neal (D-MA) applauded the launch of the United States-Kenya Strategic Trade and Investment Partnership, “Today’s announcement that the United States will be furthering our partnership with a key trading partner, Kenya, is a welcome advancement in our trade relationship, and I thank USTR Ambassador Tai for her leadership in launching this initiative. “Kenya is a recognized...

15 July 2022

United States and Kenya announce the launch of US-Kenya strategic trade and investment partnership

During a virtual meeting today, United States Trade Representative, Katherine Tai, and Kenya's Ministry of Industrialization, Trade and Enterprise Development Cabinet Secretary, Betty Maina, launched the United States-Kenya Strategic Trade and Investment Partnership (STIP).   Building on their June 13, 2022 meeting in Geneva, Ambassador Tai and Cabinet Secretary Maina agreed that their governments will pursue enhanced engagement leading...

14 July 2022

US starts resetting trade ties with Kenya to reflect Biden priorities

The US government on Monday started reshaping trade deals with Kenya to reflect the priorities of the Joe Biden administration, American officials said. The US and Kenya agreed to discuss an “ambitious” trade arrangement with “high-standard commitments” in key areas including agriculture, digital trade and climate change, the Office of the United States Trade Representative (USTR) announced on Monday. The USTR stated this after the...

15 June 2022

Kenya, US revisit trade talks, agree to expedite process

Kenya and the US have revisited trade talks between the two countries as ministers meet at the World Trade Organization's 12th Ministerial Conference in Geneva. As a next step, the two countries have agreed to work to finalise a list of areas for cooperation to deepen economic engagement. This was during an engagement between the US Trade Representative ambassador Katherine Tai and Kenya’s Industrialization, Trade and Enterprise...

14 June 2022

US looks beyond delayed free trade deal in commercial ties with Kenya

The US government is looking beyond a delayed trade deal with Kenya to expand commercial ties between the two countries amid Nairobi’s mounting frustration with Washington's slow pace to conclude the deal. In a new report submitted to the US Congress by Joe Biden’s top trade diplomat Katherine Tai, the US government revealed it would pursue “other means” of deepening trade engagements with Kenya in the absence of a free trade...

30 May 2022

US Senate starts hearings on Biden Administration's proposed envoy to Kenya, other countries

United States (US) lawmakers have started grilling President Joe Biden’s nominee for ambassador to Kenya Meg Whitman, raising hopes she will finally take up the crucial diplomatic post nearly six months after she was picked for the role. The billionaire’s nomination which was made last December has been pending approval by the US Senate. Biden nominated the Democratic Party donor and former eBay and Hewlett-Packard CEO as his envoy to...

27 May 2022

Kenya 'reaps Sh10 billion after Ethiopia's ban from AGOA deal'

Kenya earned an additional Sh10.2 billion from its exports to the US as Nairobi reaped big from Ethiopia’s suspension from a duty-free trade pact. Last year, Kenya’s exports to the US — mostly apparel were valued at Sh59.6 billion, a jump of more than a fifth from Sh49.4 billion in 2020 as Kenyan traders sold more goods through the African Growth and Opportunity Act (Agoa), a free trade agreement between Washington and select African...

24 May 2022

Kenya’s AGOA exports climb to Sh50 billion

Export of duty-free goods to the US under the African Growth and Opportunity Act (Agoa) has crossed the Sh50 billion mark after declining last year. Data from the Kenya National Bureau of Statistics (KNBS) indicates that the value grew by 20 percent, marking one of the biggest leaps in seven years. The goods, mainly textile products, increased from Sh42.2 billion in 2020 to Sh50.6 billion in the review period. “All the selected indicators...

10 May 2022

Inside the burning issues as Kenya-US trade talks resume

Kenyan trade officials and their American counterparts resumed talks on a proposed free trade pact that holds the potential of boosting exports to the world’s largest market, but one that critics fear could expose local firms up to unfair competition from American companies. US trade officials jetted into the country on Sunday to iron out pending concerns by President Joe Biden’s administration that have delayed the deal. High on the...

05 May 2022

New round of Kenya-US trade talks starts

The US government and Kenya will from Tuesday start another round of trade talks, signalling a fresh direction after the Biden administration froze Trump-era negotiations on the free trade agreement. “Kenya-US trade and investments experts are set to have in-person meetings scheduled for 3rd May to 6th May,” said Kenya’s trade ministry while announcing the meetings will not be open to the press. Assistant United States Trade...

02 May 2022