A summary of key negotiation points in the proposed bilateral deal between the United States and Kenya has shown that Washington is seeking unfettered access to a host of key sectors in East Africa’s largest economy.
The document, published by the Office of the U.S. Trade Representative and reported by The EastAfrican, details a list of demands and rules that the American government will table when negotiations commence sometime next month.
Kenya is expected to reduce or lift tariffs on all American agricultural and digital products, and also open its maritime, textile, telecommunications, financial services, and pharmaceuticals industries, including other sectors deemed sensitive to U.S. investors.
The proposed free trade agreement is meant to replace the expiring AGOA deal, a trade preference program set up in 2000 that provides duty-free entry into the U.S. for almost all African products, from oil and agricultural goods to textiles, farm, and handicrafts.
The Donald Trump administration has said it will not renew the multi-party deal that has been at the centre of U.S.-African engagement on trade and investment for two decades, opting instead for bilateral ones with individual countries under an “America First” policy meant to counter Chinese influence across the world.
Kenya expects to benefit from the two-party deal by exporting a range of tax-free goods to the U.S. and is preparing proposals ahead of negotiations, reports show. But its decision to seek a trade deal with America outside existing regional and continental trade protocols has been met with widespread criticism and even challenged in court.
Regional trade officials criticized the deal after initial details of the maiden bilateral trade agreement surfaced earlier this year, saying it is potentially in breach of protocols of the East African Community and the African continental free trade agreement, both of which Kenya is a signatory. Lawyers Christopher Ayieko and Emily Osiemo in March then filed a petition at a regional court challenging the proposed agreement.
Nairobi has denied the allegations and since maintained that the free trade agreement will not breach regional treaties. “We would like to assure our partners in the EAC and the African Continental Free Trade Area (AfCFTA) that we do not intend to jeopardize our regional interests,” said Betty Maina, Kenya’s Trade and Industrialisation Cabinet Secretary.
Granting comprehensive market access for major sectors to the United States could have far-reaching implications on Kenya’s critical agricultural sector and its industrialization plans, experts have warned.
“Reciprocal trade between Kenya and the U.S. essentially puts two extremely unequal countries on a path of enhanced harmonization of rules and policies. This is a complete mismatch,” executive director at Econews Africa Edgar Odari said in a note on The EastAfrican.
Both countries share around $1 billion in trade annually, which is mostly skewed in favor of America. While the U.S. ranks third as Kenya’s export destination, the East African country is currently placed 98th on Washington’s trading partners list with exports of $365 million and imports worth $644 million.
The agreement portends danger to sectors such as agriculture and manufacturing and disintegration of Kenya’s economy, Odari said, with likely implications on food security as the ability of local farmers to produce will be limited by stiff competition from subsidized products from the U.S.
“The discussion on a post-AGOA future needs to be collectively done by African countries and not a single country rushing to conclude an agreement with such far-reaching consequences. Such a move will set a counter-productive floor for all other African countries in their future trade relations with the U.S. since it will give the U.S. pole position,” Odari adds, calling for “an abundance of caution” from Kenya.