Maintaining the African Growth and Opportunity Act (AGOA) benefits for Kenya is critical even if the country signs a free trade agreement with the US, a report by the American Chamber of Commerce (AmCham Kenya) reveals.
But this should not be to the detriment of the US as they should seek to ensure adequate reciprocal market access.
Kenyan exports to America under the Africa Growth Opportunities Act (AGOA) hit Sh67 billion in 2019, a marginal increase of 3.7 percent from Sh64 billion recorded in the previous year.
The report further says that the agreement is an opportunity to address challenges in Kenya to international trade, including those relating to the regulatory environment, trade facilitation, intellectual property enforcement, law enforcement, and supply chain policies.
Speaking during the report launch, AmCham Kenya CEO, Maxwell Okello, highlighted the purpose of the report as, “to contribute to the dialogue on achieving a robust, comprehensive, model FTA, by factual analysis of trade issues and by documenting insights from businesses and stakeholders, within the broader context of U.S.-Africa trade, recent and impending developments relating to the Covid pandemic, the negotiation of the AfCFTA and the upcoming expiration of AGOA”.
Kenya is currently the 96th largest goods trading partner with Sh110 billion in total (two-way) goods trade. Goods exported totaled Sh40 billion, while those imported totaled Sh67 billion, representing a goods trade deficit of Sh27 billion in 2019.
The primary goods Kenya exported to the US included apparel, macadamia nuts, titanium, coffee, tea and spices.
Imports from the US to Kenya were led by aircraft, plastics, machinery and wheat.
The report further cites the introduction of more predictability in U.S.-Kenya commercial relations, promoting economic opportunities for small and medium enterprises in both countries, injecting reciprocity into the U.S.-Kenya commercial relationship and making U.S. goods and services more competitive with products from Europe.
It also lists the economic importance of digital trade during the COVID-19 pandemic, addressing Kenya’s ban on most imports of GMOs, an obstacle for agricultural trade and improvement of intellectual property protection and enforcement.
The American Chamber of Commerce (AmCham Kenya), partnered with the U.S. Chamber of Commerce’s U.S.-Africa Business Centre (USAfBC) and Covington to publish a report titled “U.S.-Kenya Trade Negotiations: Implications for the Future of the U.S.-Africa Trade Relationship,” based on an in-depth study examining the challenges and benefits of a potential free trade agreement (FTA) between the U.S. and Kenya.
Witney Schneidman, chair of Covington’s Africa Practice Group, who also co-authored the report added, “Kenya is a long-standing, strategic U.S. partner in Africa and American investment and bilateral trade are important elements of the U.S.-Kenya relationship.”
Dr. Schneidman also noted that a successful trade agreement between both countries would mark an important development in U.S. trade policy toward Africa in general, and sub-Saharan Africa in particular.
