Kenyan manufacturers have asked the Trade ministry to request Washington to extend the existing duty- and quota-free access to the expansive US market window for another 15 years as the two countries prepare for talks over a long-term bilateral trade deal.
The Kenya Association of Manufacturers, the sector lobby, argues that uncertainty over the more than two decades-Growth and Opportunity Act (Agoa) deal, which expires in two years, is costing the country billions of shillings in potential investments.
“Kenya should seek an Agoa extension of at least 15 years with enhancements that will enhance and diversify exports. The need for a renewal … by end of 2023 is critical to provide for market certainty as investment and trade in Agoa sectors slows down two years to the renewal date,” the lobby wrote in the 2023 Manufacturing Priority Agenda unveiled on Tuesday.
“This is in addition to a push for favourable market access conditions in the US-Kenya Cooperation agreement.” The Agoa deal is the main magnet of investments into the country’s tax-friendly Export Processing Zones, accounting for over half of the EPZ exports.
The Agoa treaty was initially intended to last for 15 years from the year 2000 before being extended for a further 10 years which expires in September 2025.
The deal allows sub-Saharan African countries to export thousands of products to the US without tariffs.
Ahead of the expiry, the Biden administration has opened fresh talks over a long-term bilateral strategic trade and investment partnership with Kenya.
Trade PS Alfred K’Ombudo in February led the Kenyan delegation to Washington for a week-long opening round in which the teams went through the 11 pillars of the proposed trade deal and agreed to forge ahead with the talks “in the coming months.”
The latest data from the State Department of Trade, however, shows that certificates of origin issued to firms under the Agoa framework fell to 14 in the year ended June 2022 from 50 the year before.
