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How will the new Kenya-US trade deal fare?

Kenya US trade
Kenya’s negotiating team therefore should avoid mixing China’s role in Africa with the US interests. FILE PHOTO | NMG 

Barely four months before the African Continental Free Trade Area (AfCFTA) deal starts in July, Kenya is experimenting with a new “model” of trade relationship with the United States.

The model departs significantly from traditional multilateral trade deals Africa is used to.

With the new model, Kenya is charting a new ground that is more difficult even for the really advanced nations to crack. Take for example the China and US trade negotiations that have taken years to finalise.

In Britain, even Brexiters admit that the country does not have enough human resource capacity to negotiate bilateral trade deals following their exit from the European Union. Africa has fared poorly in World Trade Organisation (WTO) and the African, Caribbean and Pacific Group of States (ACP) trade negotiations to the extent that the United Nations Conference on Trade and Development (UNCTAD) found it necessary to set up a trade-related technical co-operation and capacity-building for developing countries.

This is not to pour cold water on having a trade deal with the US. The new policy intentions by the US could lead to benefits for African countries. Experts, however, are sceptical of the US intentions that have not spared even their closest allies in Europe.

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A casual survey among trade experts in the country reveal that it will be unlikely for Kenya to get beneficial advantage from experienced US negotiators.

Media reports now reveal that Robert Lighthizer, the US trade representative, has for long been searching for an African nation willing to try this new model before it can be replicated in other countries and eventually replace the African Growth and Opportunities Act (AGOA).

Some argue that such bilateral trade negotiations rekindle pre-independence negotiations in London, Paris and Brussels where African countries got the short end of the tail.

They say that bilateral trade negotiations for Africa have historically never gone well especially when hosted in countries that have interest in Africa.

The emergent nationalism that is sweeping across the world sends shivers down the spines of African nations that there is something more than meets the eye. One of the casualties of the new nationalism is truth and ethics that will likely degenerate into abuse of human rights as has happened before. Chances of being pigeonholed into a new ideological dispensation are high.

Reference was made to Paul Kenyon’s book, ‘‘Dictatorland: The men who stole Africa’’ , where he reveals how Europe (UK, Belgium and France) and the US either organised sham pre-independence negotiations in their capitals or sponsored dictators in the continent and literary stole Africa’s wealth with the help of the so called “founding fathers.” Others are suspicious of Britain’s post-Brexit behaviour and US’s America First mantra. Britain has never been so generous to any of its colonies as it was last month when it invested £1.3 billion (Sh170 billion) in Kenya for housing, finance, renewable energy and entrepreneurship.

It also signed a memorandum to mobilise private financing for Kenyan projects by utilising British expertise to accelerate Kenya’s economic development.

Even before the ink is dry in Britain, the US invites Kenya overnight to discuss a bilateral trade agreement without much preparation.

Nevertheless, there are opportunities that Kenya can exploit from the trade negotiations especially in the services sector. The Business Process Outsourcing (BPO) is expected to reach $407 billion by 2027. Kenya has a young and well-educated youthful population. The nascent BPO industry could benefit from a balanced trade deal.

The textile, light electronic manufacturing as well as the fishing industries present other opportunities that may collapse if AGOA comes to an end. The trade between the US and Kenya in 2018 amounted to $1 billion at the same time trade between Kenya and China has risen to $5 billion.

Some of the imports from China like small manufacturing machinery for cottage industry has had a significant impact on Small and Medium Enterprises. Kenya’s negotiating team therefore should avoid mixing China’s role in Africa with the US interests. In spite of the Western world’s condemnation of China, it has indeed made an impact. What remains is for African governments to develop a mutually beneficial framework for constructive engagement with China.

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