Last week, Kenya and US officially started negotiations of the Free Trade Agreement (FTA). A special interest group comprising civil society, trade unions and farmers have also mobilised against the FTA. This is a common trend globally when trade negotiations begin because the future of these vested interest groups is always uncertain.
Though, what we are seeing around is more noise than signal about what the FTA means for Kenya. The special interest group raises contentious issues but seem caught in sensationalism.
First, the petition talks about the danger of crippling agriculture sector and hurting food security. Now, this is basic economics. Food security and food sufficiency are two distinct issues and it is fallacious to conflate them as one and the same.
The argument the lobby group is making is food sufficiency where a country feeds its own population from its own food basket while food security means access to food and better nutrition, which largely is attributed to affordability.
On such a serious issue, it’s important for the lobby group to get the substance of their concerns right so that they can drive a sober debate.
Second is the argument that the FTA will limit the ability of the Kenyan government to regulate risky pesticides and agricultural technologies.
The lobby is simply being dishonest; Kenya has among the weakest food and drug safety regulations while the US has one of the best under the Food and Drug Administration (FDA). If Kenya signs the deal, US exporters to Kenya will be required to meet the FDA regulations and Kenyan exporters to US will also be required to meet them.
From that framework, it is clear who between the two countries stands to benefit more from that regulatory integration and alignment. In fact, countries like China with a poor record have improved their food safety standards because of this regulatory alignment.
Third, it is premature to say at this stage that Kenya will lose revenue and have shrunken trading space due to the FTA. Unless Kenya offers tax holidays to US investors, it should see increased trade and investment that will translate into more revenues. The correct argument is that Kenya will see unequal economic growth from that increased trade and investment as it has been evidenced in many FTA deals.
Now, away from the noise, there are fundamental signals that the deal will be contentious and controversial.
First, a few months ago, it was reported that Kenya was recruiting experienced (foreign) trade negotiators. The government has not disclosed to the public these contracted parties negotiating on behalf of Kenyans when it’s the taxpayers who will be paying them.
In such negotiations, large corporates always have high lobbying power and capacities to unevenly influence regulatory governance, more specifically they ask for freedom to operate their supply chains and avoid local sourcing.
This is one of the reasons it is important for Kenya to make public the contracted parties since local farmers, small businesses and workers need to know who is negotiating on their behalf.
Second, Kenya government has started the talks without providing the details of its draft proposal, leaving the public to second-guess what the draft proposal may look like, when we know the devil is in the detail.
This failure to buy in public support coupled with the secrecy around the text and process of this FTA negotiations make it controversial for it to navigate contentious issues when a deal will be reached.
Third, this FTA seem to be aligned as one of President Uhuru Kenyatta’s legacy policies and so the government is in a rush to finalise the deal as soon as possible at the expense of negotiating a fair-trade deal that will be used as a benchmark by other sub-Saharan countries.
And such a fair-trade deal takes time to fine-tune.