President William Ruto has exuded confidence that the US government will extend the African Growth and Opportunity Act (Agoa) trade deal, allaying fears that the change of guard following the recent elections would hamper the renewal plans.
He said he is hopeful that US President-elect Donald Trump will support the renewal of the agreement.
“I know many of you are wondering whether Agoa is going to be renewed. Let me confirm to you that it will. I have it on the authority of many of my friends in that country and I believe that the new administration is also going to support our Agoa plan," Dr Ruto said when he officiated the celebrations to mark 20 years of existence of the Kenya Private Sector Alliance (Kepsa) at the Kenyatta International Convention Centre (KICC).
Kenya, a major beneficiary of Agoa, was earlier concerned that the programme which provides eligible countries in the region with tariff-free access to US markets, would be erased after its expiry at the end of 2025 following the change in administration.
Trump, a strong proponent of the America-first trade conservatism, had on several occasions on the campaign trail stated that Agoa should not be renewed on account of foreign policy disagreements.
The Agoa treaty was initially intended to last for 15 years from the year 2000 before being extended for a further 10 years in June 2015.
Ahead of its expiry, outgoing President Joe Biden had opened fresh talks over a long-term bilateral strategic trade and investment partnership with Kenya.
Prior to the US election, Kepsa had expressed optimism that regardless of the November poll outcome, Agoa would be likely to be renewed arguing that the agreement had always been a bipartisan bill supported by both the Democrats and the Republicans.
Kenya’s garment manufacturing sector is a significant beneficiary of Agoa, with the country exporting $6.5 billion (Sh841.8 billion at current conversion rates) worth of garments to the US duty-free under the pact in more than two decades since 2000.
Kenya is also the largest garment exporter under Agoa, well ahead of Lesotho, and with higher exports than Mauritius and Madagascar combined.
Between 2000 and 2022, Kenya exported nuts worth $577 million (Sh74.7 billion) duty-free. Most exports comprise macadamia nuts, which would be subject to an import duty of (US) 5c/kg under normal trade relations.
