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Kenya pushing for free trade deal with US

Currently, only Morocco has a pact in place.

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by MARTIN MWITA

Business21 December 2022 - 14:00

In Summary


  • •Trade and Industry Moses Kuria had his first in-person meeting with US Trade Representative Katherine Tai last week.
  • •The two are expected to pick up talks early next year, which will set pace for a possible conclusion of a deal before 2025.
US Trade Representative Katherine Tai with Kenya's Trade and Investment Cabinet Secretary Moses Kuria, on December 13/

Kenya will become the second African country to have a Free Trade Agreement (FTA) with the US if ongoing talks succeed.

Out of the 20 agreements currently in force, only Morocco’s is from the continent.

Other countries with free trade agreements with the US US are Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Israel and Jordan.

Also on the list are Korea, Mexico, Nicaragua, Oman, Panama, Peru and Singapore.

There is also the United States-Mexico-Canada Agreement (USMCA) entered into force on July 1, 2020.

It substituted the North America Free Trade Agreement (NAFTA), and benefits North American workers, farmers, ranchers, and businesses.

A week-long US visit by President William Ruto has set the pace for renewed trade talks between Kenya and the US.

While Ruto majorly travelled to the to attend  the US-Africa Leaders Summit in Washington, together with his team they held side meetings with private sector players on unlocking growth and investment potential between the two countries.

Trade and Industry Moses Kuria had his first in-person meeting with US Trade Representative Katherine Tai.

The two are expected to pick up talks early next year, which will set pace for a possible conclusion of a deal before 2025, when the African Growth and Opportunity Act (AGOA) lapses in 2025.

Africa is however seeking another 10-year extension of the AGOA pact.

It was initially intended to last 15 years from the year 2000 but was extended for 10 years to September 2025. 

According to trade experts, it takes up to two years to have a complete FTA (Free Trade Agreement) meaning Kenya and the US could have a deal by 2024.

The AGOA deal grants Kenya and 40 other sub-Saharan African countries duty-free access to the US market for over 6,000 products.

More than 70 per cent of Kenya's exports to the US are duty-free under AGOA.

It is the largest export destination of Kenya’s apparel, accounting for more than 90 per cent of garment exports annually, a sector that stands out as the biggest beneficiary in an improved trade environment under the FTA.

During a meeting last Friday, CS Kuria affirmed the country’s commitment to growing the volumes tenfold.

"We are committed to growing exports of apparels to the US in the medium to long term through provision of affordable and competitive energy solutions, skills training and efficient infrastructure" the CS said.

With a bilateral deal, Kenya is keen to tap at least five per cent of the US market, which has the potential to earn the country more than Sh2 trillion in export revenues annually.

Last year, Kenya's exports to the US grew to Sh59.5 billion, up from Sh49.3 billion previous year, with increases in the exports of macadamia nuts and articles of apparel and clothing accessories, the Economic Survey 2022 indicates.


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