Economy
The United States warned of the trade agreement with Kenya after the expiration of Agwa
Thursday, July 20, 2023
US Trade Representative Catherine Tay addresses reporters at the Serena Hotel, Nairobi on July 19, 2023. Image | Lucy Wanjiru | NMG
The United States is not committed to when the FTA negotiations with Kenya will conclude, although Nairobi previously said the talks would conclude by December.
US Trade Representative Catherine Taye, who wrapped up her three-day tour in Nairobi on Wednesday, noted that US negotiators have no deadline for concluding talks or signing the US-Kenya Strategic Trade and Investment Partnership (STIP).
“In terms of signing and when we finish, our focus is now on substance rather than setting an actual deadline,” Ms Tai said at a media briefing in Nairobi.
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“There is a strong drive on both sides to continue building trade and economic relations through these STIP discussions. So I’m very encouraged by the engagement we’ve had here and we’ll see how quickly we can move things forward.”
The proposed trade deal, which has no tariff provisions, is expected to protect Kenya should the US Congress choose not to renew the Africa Growth and Opportunity Act (AGOA), which gives countries in sub-Saharan Africa tariff- and quota-free access to the US market, when it expires in 2025.
Kenyan Trade Minister Moses Correa said in March that he expected negotiators to conclude talks in December to pave the way for signing the deal by April 2024.
The Commerce Ministry’s expectation to complete the talks by December was confirmed in a report issued by the National Assembly’s Trade, Industrialization and Cooperatives Committee in June.
The two countries held the first round of talks on the proposed trade deal, which would be used as a benchmark for the rest of sub-Saharan Africa, in Nairobi between April 17-20.
Ms. Tai, who co-chaired a meeting of the US-East Africa Group’s (EAC) Trade and Investment Framework Agreement (TIFA) Council on Tuesday, said ongoing discussions on STIP were part of the agenda for her visit to Nairobi.
“The biggest part of my being here is to foster engagement and conversations about this strategic and investment partnership,” she said.
“Progress is going well. I have had good conversations with my counterparts and have been part of the discussions with President Ruto as well.”
However, the top US trade official did not meet Korea.
The Daily Nation reported on Wednesday that the US official was to meet Correa on Monday at his office in Two Rivers but canceled, calling him an “extremist” because of his unpalatable remarks against individuals and institutions.
An official directive from the Office of the US Trade Representative indicated that the US official was to meet with East African Community (EAC) Affairs Secretary Rebecca Miano, have a conversation with women and youth entrepreneurs and meet with private sector representatives.
“I did not meet him, but nonetheless I had very strong associations with my other counterparts in the Kenyan government on the STIP program as well as the work of the EAC. As to the reasons for not meeting him, I will refer you to the Kenyan government,” said Ms Tai.
“My visit here is about strengthening, deepening and broadening US-Kenya economic relations as well as US-East Africa economic and trade relations.”
Trade between the two countries is tilted in favor of the United States, which exported Sh93.43 billion worth of goods last year while buying Sh79.9 billion worth of goods from Kenya.
Kenya largely exports clothing items under the AGOA agreement, while imports largely pharmaceuticals and aircraft from the world’s largest economy.
The ongoing negotiations are building to the bilateral agreement that Kenya and the United States began to standardize the terms of in July 2022 prior to the end of former President Uhuru Kenyatta’s term in office.
Kenya has long sought a full free trade agreement with the United States to replace the two-decade-old Agua, but progress has been hampered by changes in administrations in both countries.
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However, discussions on the proposed bilateral trade deal began in earnest in August 2018 when then-President Kenyatta visited Washington and held talks with then-US President Donald Trump at the White House.
Mr Kenyatta and Mr Trump at the time identified economic development and trade as the pillars of the “strategic relationship” between Kenya and the United States.
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