Kenya upbeat of a trade deal with US by December
Kenya is hopeful of sealing a trade deal with the US by the end of this year, as the second round of physical meetings heads to Nairobi next month.
This comes a mid increased interest in Kenya’s Small and Medium-sized Enterprises (SMEs) by the US at this year’s American Chamber of Commerce (AmCham) Business Summit in Nairobi, a strategic platform for strengthening two-way trade and investment between the two countries, and East Africa.
A US delegation is expected in Nairobi next month for what is expected to be a week-long negotiations on the Strategic Trade and Investment Partnership (STIP).
Investment, Trade and Industry CS Moses Kuria has hinted of a possible deal in less than a year, which will see the country secure a pact way before the expiry of the African Growth and Opportunity Act (AGOA) in September 2025.
“As the second round of negotiations takes place next month, I am sure that we will reach a positive agreement by December this year,” Kuria said on the sidelines of the AmCham Summit.
The CS met held bilateral talks with a delegation from the Biden administration led by US Department of Commerce for Minority Business Development ,Under Secretary Donald Cravins, Jr.
“We reviewed the progress of the partnership programme agreed during my visit to Washington DC last December and noted with appreciation the tremendous progress in the negotiations for a Strategic Trade & Investments Partnership whose next round will take place in April in Nairobi,” Kuria said.
The first round of negotiations were held in February in Washington D.C where Trade PS Alfred K’Ombudo led the Kenyan team in a week-long talks that included representatives from over 20 US government agencies.
The US delegation was led by Assistant United States Trade Representative for Africa Connie Hamilton.
During the meetings, the two sides exchanged views on the key concepts to be addressed on almost all of the areas of the pact.
The goal of the partnership is to increase investment; promote sustainable and inclusive economic growth; benefit workers, consumers, and businesses (including micro-, small-, and medium-sized enterprises); and support African regional economic integration.
Negotiations began back in July 2020 during the Donald Trump and Uhuru Kenyatta tenures.
Administration changes in both countries following elections and the Covid-19 pandemic however stalled the process.
The Nairobi talks will focus on agriculture, digital trade, environment and climate action, good regulatory practices, anti-corruption, protecting worker’s rights, services domestic regulation and supporting the participation of women and youth in trade.
The teams will also look into standards collaboration, trade facilitation and customs procedures, and supporting MSMEs.
Yesterday, Cravins, Jr. noted the importance of SMEs as the two countries move to strengthen bi-lateral ties.
“The reality is that 90 per cent of our exports in Africa are through small businesses. Prioritising small business is not only the good thing to do but also the smart business thing to do,” he said during an address at the AmCham summit.
CS Kuria who met Exim Bank president Reta Jo Lewis and her team pitched for SMEs funding, noting through the Kenya Development Corporation (KDC), the government is currently identifying businesses that need funding.
KDC is also planning to set up sever specialised funds for example climate change fund which will encourage climate focused businesses.
Other sectors include agriculture as well as digital economy.
Exim bank is looking to fund African business to the tune of $100 billion (Sh 13.2 trillion).
Kuria has placed a proposal on the table on the signing of an MoU between the Exim Bank and KDC, on financing SMEs.
Empowering more SMEs into trade will be a plus for Kenya which is pushing for a separate trade deal with the US to secure preferential terms before the lapsing of AGOA.
With a bilateral deal, Kenya is keen to tap at least five per cent of the US market, which has the potential to earn the country more than Sh2 trillion in export revenues annually.
The US is the largest export destination of Kenya’s apparel, accounting for over 90 percent of garment exports every year.
Meanwhile, a deal with the EU is taking shape after chief negotiators of the proposed Kenya-European Union Economic Partnership Agreement (EU EPA) met on Wednesday in Brussels, Belgium.
They are K’Ombudo (Trade PS Kenya) and Dora Correia, Director for Africa, Asia, Pacific at the European Commission’s DG Trade.
The two are leading discussions on the bilateral implementation of the East African Community Economic Partnership Agreement.
“The Chief Negotiators are committed to a swift conclusion of the agreement,” a statement from Kenya’s trade ministry reads in part.
The pact, which comes in post Brext-era is expected to boost bilateral trade in goods, services and investment flows.