'Uncertainty around Kenya-US Free trade deal'

'Uncertainty around Kenya-US Free trade deal'
Published
Monday, 18 January 2021 ~ NJIRAINI MUCHIRA

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 bilateral FTA. 

Anxiety in Nairobi has been exacerbated by the unexpected resignation of U.S. ambassador to Kenya Kyle McCarter [see Op-Ed piece here], who espoused President Trump’s belief in deepening trade and commercial engagements with Africa. 

“The Trump administration valued bilateral approach to policy but the Biden administration has promised a return to multilateralism and alliance-building. While Kenya might want to continue the pursuit of an FTA, there is no guarantee of Washington being interested,” said Ken Gichinga, chief economist at Mentoria Economics.  

He added that while the need to neutralize China’s influence in Africa is something the new U.S. administration would want to pursue, the need to broaden the spectrum of trade and commercial interests through the African Continental Free Trade Area (AfCFTA) looks more feasible. 

right arrow  Follow US-Kenya FTA developments here

Cooperation through AfCFTA will revive the importance of the African Growth and Opportunity Act (AGOA), which has failed to flourish under the Trump administration. Total two-way goods trade between the U.S. and Africa declined from $36.9 billion in 2015 to $34.7 billion in 2019. 

Of importance to note is that AGOA, which is set to expire in 2025, was renewed during the Obama administration in 2015 when Biden was the vice president. 

Kenya’s FTA negotiations with the U.S. commenced in July last year, and the target was to have a deal that would allow duty-free access for Kenyan goods to the U.S. market before the end of the year, while the Trump administration was still in office. 

Though Kenya has maintained that the unilateral pursuit of an FTA will bring predictability in trading with the U.S. and that it serves as a model for other sub-Saharan Africa countries, concerns have been raised that opening the Kenyan market to U.S. goods will kill sectors like agriculture and manufacturing.  

In 2019, two-way goods trade between the U.S. and Kenya amounted to $1.1 billion, with Kenya’s exports mainly being textile and apparels, agricultural products and artifacts. Currently the U.S. ranks as Kenya’s third largest export market and seventh overall trading partner. 

The FTA has also been criticized as part of Kenya’s tendency to undermine the East Africa Community, of which Kenya is a member and whose treaty requires negotiating trade agreements as a bloc.  

“Kenya is an important hub on Africa policy and whatever fate befall the FTA, the Biden administration will continue to engage Nairobi particularly on issues of security and counter-terrorism,” observed Gichinga.     

The U.S. currently has 14 FTAs in force with 20 countries worldwide, among them Morocco in Africa which was signed in 2004.

  • The opinions expressed herein are the author's and not necessarily those of The Maritime Executive which first published this article.

View related news articles

Kenya seeks US market access for fresh oregano, parsley

Kenya has asked the United States Department of Agriculture’s Animal and Plant Health Inspection Service (Aphis) to authorise the importation of fresh oregano and parsley to the US from Kenya. Aphis has drafted a pest risk assessment that describes potential pests associated with the commodities ahead of the possible approval process.  Download and view the documents at the links alongside The agency is making the assessment...

07 September 2021

'US pressured over delayed promise to Kenya' in letter sent to USTR Tai

US President Joe Biden has come under pressure to fulfil the American government promise of achieving a Free Trade Agree (FTA) with Kenya.  Seven Republican Senators want the negotiations for an FTA deal between the US and Kenya hastened to pave way for business and investment.  In a letter written to U.S. Trade Representative Katherine Tai, the Senators asked for the process to be given priority after delaying for close...

20 August 2021

'We examined 20 years of US-Kenya trade: Some lessons for Africa'

Kenya is one of the top five beneficiaries of the US-Africa trade initiative, the African Growth and Opportunity Act (AGOA). It also had the second-highest utilisation rate in 2018 with over 70% of its US exports covered by the programme. Launched in 2000, the trade pact gives sub-Saharan Africa the most liberal access to the huge US market available to any country or region with which Washington does not have a free...

16 August 2021

US trade chief plans summit to discuss Africa duty-free access

The U.S.’s trade chief plans to convene a meeting with African ministers before the end of the year to strengthen partnerships and discuss a law that provides duty-free access to the U.S. for thousands of goods from sub-Saharan nations. “It is important that we meet despite the pandemic to discuss how we can build on the successes of the African Growth and Opportunity Act,” U.S. Trade Representative Katherine Tai said in remarks...

27 July 2021

'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