RENEGOTIATION

Kenya-US go for fresh trade pact as Biden dumps Trump's deal

To start developing roadmap within next three months.

In Summary

•The negotiations which started during former US President Donald Trump and Uhuru’s regime, on July 8, 2020, faced a number of hiccups, among the 2020 US elections.

•When President Joe Biden took office in January last year, his administration sought more time to scrutinise the pact.

US Trade Representative Katherine Tai and Kenya’s Industrialization, Trade and Enterprise Development CS Betty Maina on the sideline of the WTO Ministerial Conference in Geneva/TRADE MINISTRY
US Trade Representative Katherine Tai and Kenya’s Industrialization, Trade and Enterprise Development CS Betty Maina on the sideline of the WTO Ministerial Conference in Geneva/TRADE MINISTRY

Kenya and US will commence working within three months to develop a detailed roadmap for engagement as they seek what they term a “ Strategic Trade and Investment Partnership.”

This signals an end to an initial push for a Free Trade Area (FTA) agreement, whose talks commenced two years ago. 

The negotiations which started during former US President Donald Trump and Uhuru’s regime, on July 8, 2020, faced a number of hiccups.

First, they were derailed by the 2020 US elections.

When President Joe Biden took office in January last year, his administration sought more time to scrutinise the pact.

The talks were also disrupted by the Covid-19 pandemic before the US elections.

Several meetings have since taken place between Kenya’s Industrialization, Trade and Enterprise Development Cabinet Secretary Betty Maina and US Trade Representative Katherine Tai for a way forward, with indicators the Trump administration was keen on a fresh deal.

On Thursday, CS Maina and Tai announced the launch of the Kenya-United States Strategic Trade and Investment Partnership (STIP).

This was after a virtual meeting between the two, building on their June 13 meeting in Geneva.

The two agreed that their governments will pursue enhanced engagement leading to high standard commitments in a wide range of areas with a view to increasing investment, promoting sustainable and inclusive economic growth, benefiting workers, consumers, and businesses.

These include Micro-, Small and Medium-sized Enterprises).

They will also be keen on supporting African regional economic integration.

In a statement to newsrooms, Kenya’s trade ministry said the two have identified issues where the country and the US will develop “an ambitious roadmap” for enhanced cooperation, with the goal of negotiating high-standard commitments in order to achieve economically meaningful outcomes.

Among them in agriculture where they say they will consider measures to facilitate agricultural trade and enhance transparency and understanding of the application of science- and risk-based Sanitary and Phytosanitary (SPS)measures.

The two sides share an interest in fostering sustainable agricultural practices, as well as creating an enabling environment for innovative agricultural technologies.

This is in view of achieving food security goals, increasing farm productivity, and improving farmer livelihoods, while addressing climate change concerns.

There is also focus on fighting corruption.

“Kenya and the United States share a commitment to prevent and combat bribery and other forms of corruption. The two sides will engage in information sharing of best practices to prevent and combat bribery and corruption and will explore negotiating specific commitments,” the statement read in part.

The talks will include d digital trade where Kenya and the US share an interest in fostering consumer, business, and worker trust in the digital economy, ensuring access to information, promoting the development and use of resilient and securing digital infrastructure.

This also involves MSMEs.

The two countries will discuss measures to support digital inclusion, including accessibility, and online consumer protection. They will also monitor global discussions on emerging issues in digital trade which are of mutual interest.

Other areas of focus will be environment and climate change action, good regulatory practices, promoting workers’ rights and protection, supporting participation of women, youth, and others in trade, standards collaboration and trade facilitation and customs procedures.

According to CS Maina, Kenya and the US recognise the pandemic’s impact on supply chains and the demonstrated benefits of streamlining border procedures and accelerating WTO Trade Facilitation Agreement implementation.

“The two sides will discuss opportunities to simplify procedures, especially those that allow new entrants to engage in trade,” CS Maina said in the statement.

In this regard, the two countries will consider various customs practices, transparency and cooperation on customs enforcement to inform mutual understanding, including an agreement on mutual assistance between their customs administrations, signed in Washington on August 6, 2014.

They will also explore other topics of engagement, including trusted trader benefits for demonstrated low-risk importers, particularly those that participate in their respective country’s authorised Economic Operator (AEO) program.

The talks are expected to resume in mid-October after Kenya’s next month's General Elections.

A lot of attention is currently on campaigns and elections.

The US is keen to increase its exports to Kenya, including agricultural and industrial, in a move seen to try and tame the growing dominance of China’s trade with Kenya.

Last year, China remained the single leading source of Kenya’s imports, accounting for 20.5 per cent of the total imports valued at Sh441.4 billion, the Economic Survey 2022 shows.

Imports from the US were valued at Sh84.2 billion in the year, which was an increase from Sh56.3 billion.

“This was largely attributable to expenditure on imported liquefied butanes, aircraft equipment and parts, and medical and pharmaceutical products,” the survey by the Kenya National Bureau of Statistics notes.

Objectives captured in a document by the US Trade Representative’s office indicates the country is keen to secure comprehensive market access for US agricultural goods in Kenya by reducing or eliminating tariffs.

“…Eliminate practices that unfairly decrease US market access opportunities or distort agricultural markets to the detriment of the United States, including non-tariff barriers that discriminate against US agricultural goods, and restrictive rules in the administration of tariff rate quotas,” the document reads in part.

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