Economy

US and Kenya formally launch free trade deal talks

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President Uhuru Kenyatta (left) and US President Donald Trump. FILE PHOTO | NMG

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Summary

  • Kenya and the United States (US)formally launched negotiations on Wednesday this week for a bilateral trade agreement that the two economies hope could serve as a model for additional agreements across the African continent.
  • In a joint statement, trade ministers for the two countries, Betty Maina and Robert Lighthizer, said they were holding an initial round of talks virtually over the next two weeks due to the coronavirus.
  • Kenya wants to do a deal with Washington before the expiry of the Africa Growth and Opportunity Act (Agoa), which allows sub-Saharan African countries to export thousands of products to the United States without tariffs or quotas until 2025.

Kenya and the United States (US)formally launched negotiations on Wednesday this week for a bilateral trade agreement that the two economies hope could serve as a model for additional agreements across the African continent.

In a joint statement, trade ministers for the two countries, Betty Maina and Robert Lighthizer, said they were holding an initial round of talks virtually over the next two weeks due to the coronavirus.

Kenya wants to do a deal with Washington before the expiry of the Africa Growth and Opportunity Act (Agoa), which allows sub-Saharan African countries to export thousands of products to the United States without tariffs or quotas until 2025.

“We believe this agreement with Kenya will complement Africa’s regional integration efforts, including in the East African Community and the landmark African Continental Free Trade Area...” Ms Maina and Mr Lighthizer said.

Two-way goods trade between the United States and Kenya totaled Sh106 billion in 2019, up 4.9 percent from 2018.

US President Donald Trump and President Uhuru Kenyatta announced on February 6 the intention to start formal trade talks on the free trade deal.

Kenyan firms have backed the free trade push, shrugging off concerns that goods produced cheaply by advanced US factories could push some of them out of business.

Kenya Private Sector Alliance (Kepsa) said in February the new planned US-Kenya trade deal would lead to increased opportunities for export and import.

“Kenya should draw lessons from Morocco on the challenges and opportunities that are emerging with the free trade agreement between them and the US to learn and eventually do better,” said Carole Kariuki, the chief executive Kepsa.

A trade agreement with Kenya would be the first US free commerce deal in sub-Saharan Africa.

The deal would replace the Africa Growth and Opportunity Act (Agoa), which expires in 2025.

Agoa grants 40 African states quota and duty-free access to the US market of more than 6,000 product lines.

Kenya’s total exports to the US under the Agoa plan peaked at Sh35.2 billion in 2015, before declining to Sh32.7 billion in 2017, according to the Economic Survey data.