TRADE DIPLOMACY

From strength to strength: Kenya-US partnership from Agoa to FTA

A US-Kenya FTA would help support the Big Four agenda and drive the investment Kenya seeks

In Summary

• For full transparency, the US published our FTA negotiating positions online for all to see.

• This is about America first and Kenya first — a win-win agreement.

President Uhuru Kenyatta at State House, Nairobi when he witnessed the virtual launch of the Kenya-US Free Trade Agreement (FTA) negotiations
President Uhuru Kenyatta at State House, Nairobi when he witnessed the virtual launch of the Kenya-US Free Trade Agreement (FTA) negotiations
Image: PSCU

The 56-year-old US-Kenya relationship flourishes because we trust each other, respect each other, and our nations share common values.

The US and Kenya believe in a strong economy through an open, free marketplace allowing entrepreneurs, businesses, and the private sector to thrive and create jobs.

The African Growth and Opportunity Act enhanced markets, allowing Kenyan businesses to grow.

The Act will expire in 2025 and, while it has been helpful, Agoa has not been transformative in driving the broad-based economic growth Kenya seeks.

 

Kenya is ready for the next step, a US-Kenya Free Trade Agreement that will bring our relationship from reliance on tariff preferences that erode over time and can be unilaterally withdrawn, to an agreement that drives more efficient uses of resources and expands trade.

While Kenyans hear a lot about the ongoing FTA negotiations, not all of it reflects reality.

Many thoughtful Kenyans and Americans are engaged in these negotiations and recognise the FTA’s importance. Unfortunately, the negotiators are not the ones speaking publicly about the talks’ progress, leading to some unfruitful conversations.

Let’s start at the beginning: Kenya is the powerhouse economy in East Africa and it makes sense that the US would look to Kenya as our partner for the first modern FTA in the region.

To do that, we must look beyond Agoa to negotiate an agreement that will spur economic growth throughout East Africa. The first round of negotiations began on July 8 and the second round began this month.

For full transparency, the US published our FTA negotiating positions online for all to see. This is our starting point; one we know from decades of experience benefits both the US and our many FTA partners.

Agreeing on a comprehensive, modern FTA is a negotiation, not an ultimatum, as our experience negotiating 14 FTAs covering 20 countries of all sizes has shown. This is about America first and Kenya first — a win-win agreement.

Some have asked why an FTA is needed when Agoa has worked so well. Under the Act, Kenya’s exports to the US increased six-fold from $110 million in 2000 to $667 million in 2019.

But Agoa was never intended to be permanent, and that uncertainty alone is enough to stifle investor interest.

A high-standard FTA covering topics such as goods and services, agriculture, digital trade, foreign investment, and anti-corruption will unlock greater trade, commercial, and investment opportunities beyond those provided under Agoa. Our shared, ambitious goal is to complete an FTA well before the act expires.

A US-Kenya FTA would help support the Big Four agenda and drive the investment Kenya seeks. It would also help support Kenya’s small- and medium-sized businesses that form the backbone of its economy.

It would allow Kenyan and American businesses to benefit from increased access to each other’s markets and our consumers to enjoy expanded choice, lower prices, and higher quality – all while preserving access to US markets.

 

We have also heard concerns about environmental issues. Our published position makes clear that the US recognises the sovereign right of Kenya to establish its own levels of domestic environmental protection.

Furthermore, America would seek FTA provisions that provide for, and encourage, high levels of environmental protection. This applies equally to plastic bags, marine litter, and recycling.

The US and Kenya are equals. Nevertheless, to take its seat as the rightful economic leader in the region, Kenya faces challenges.

A free trade agreement is exactly that — free trade, not protectionism.

Free trade will make Kenya more competitive and stronger economically. Closed markets, corruption, and other restrictions stifle and weaken Kenya’s economy, limiting innovation and progress.

By partnering with US companies and its economy — the largest in the world — Kenyan companies will become more competitive across Africa and globally. It will also encourage transparency.

This, in turn, will provide Kenya with access to markets currently out of reach; increase consumer choice; improve efficiencies, and regain market share in the EAC lost to Asian competitors.

A US-Kenya FTA will raise governance standards; upgrade consumer and product testing and standards; and enhance product quality.

Combining investments in innovation with Kenya’s trained youth will launch Kenya’s economy to new heights.

As we sit down at the table, we must place on the scales not what we see now but what we can envision creating together in the future. President Uhuru Kenyatta is leading this effort by paving the way.

Kyle McCarter is the US Ambassador to Kenya