- African Growth and Opportunity Act
TRALAC - Trade Law Centre
You are here: Home/News/Article/Kenya upbeat of a trade deal with US by December

Kenya upbeat of a trade deal with US by December

Kenya upbeat of a trade deal with US by December
Published date:
Friday, 31 March 2023

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.

Read related news articles

USTR releases summaries from US – Kenya Strategic Trade and Investment Partnership negotiations

Consistent with the Biden-Harris Administration’s commitment to the highest levels of transparency in trade agreement negotiations, the Office of the United States Trade Representative (USTR) today released summaries of texts proposed by the U.S. side on good regulatory practices, workers’ rights and protections, and a second tranche of agriculture text. Negotiations on these texts are ongoing. USTR will negotiate the workers’...

08 April 2024

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

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-US trade agreement 'may need a rethink on workers'

The US and Kenya announced a trade and investment partnership in July 2022. Talks have been progressing on the way forward in nine areas, including agriculture, anti-corruption, digital trade, environment and climate change action, and workers’ rights and protections. The Strategic Trade and Investment Partnership (STIP) will be the first significant trade partnership between the US and a country in sub-Saharan Africa. Countries in the...

16 August 2023

You are here: Home/News/Article/Kenya upbeat of a trade deal with US by December