US and Kenya formally launch trade negotiations - Just Style
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US and Kenya formally launch trade negotiations

By Michelle Russell 09 Jul 2020

The US and Kenya have formally launched trade agreement negotiations as the two countries look to deepen economic ties and complement Africa's regional economic integration efforts.

US and Kenya formally launch trade negotiations

The US and Kenya have formally launched trade agreement negotiations as the two countries look to deepen economic ties and complement Africa’s regional economic integration efforts.

Due to the ongoing Covid-19 pandemic, the first round of negotiations is being conducted virtually, with the US and Kenyan negotiators engaging in discussions over the next two weeks in multiple negotiating sessions covering all aspects of a comprehensive trade agreement.

Two-way goods trade between the US and Kenya amounted to US$1.1bn in 2019, up 4.9% from 2018, according to the Office of the US Trade Representative (USTR). Of the total $667m in US merchandise imports from Kenya in 2019, nearly 70% (US$453m) were apparel items – making the sector the single largest stakeholder in the proposed FTA, according to details released by the USTR on the new deal in May.

With regards to the textiles and apparel sector, USTR says it will: “Secure duty-free access for US textile and apparel products and seek to improve competitive opportunities for exports of US textile and apparel products while taking into account US import sensitivities.” The proposed agreement will also: “Establish origin procedures that streamline the certification and verification of rules of origin and that promote strong enforcement, including with respect to textiles.”

“Kenya is a recognised leader across the continent, an important strategic partner of the United States, and there is enormous potential for us to deepen our economic and commercial ties,” said United States Trade Representative Robert Lighthizer at the official launch of negotiations yesterday (8 July). “Under President Trump’s leadership, we look forward to negotiating and concluding a comprehensive, high-standard agreement with Kenya that can serve as a model for additional agreements across Africa.

“We believe this agreement with Kenya will complement Africa’s regional integration efforts, including in the East African Community and the landmark African Continental Free Trade Area (AfCFTA), and the United States pledges its continued support to help the AfCFTA achieve its fullest potential.”

Kenya Cabinet Secretary for Industrialisation, Trade, and Enterprise Development Betty Maina, added: “Kenya and the United States have strong trade relations demonstrated by growing exports and imports which have increased over the years. The United States of America is a significant destination market for Kenya, a position that has been sustained over the years after the East Africa Community (EAC), European Union (EU) and Common Market for Eastern and Southern Africa (COMESA).

“Increasing and sustaining export performance to the United States requires a trade arrangement that is predictable and guarantees preferential market access for Kenyan products. Kenya is also keen to attract Foreign Direct Investment from the United States that will improve vertical and horizontal linkages in the Kenyan economy. The increased inflow of investment from the United States has the potential to create job opportunities and catalyze other value chains that will benefit Micro and Small Enterprises in Kenya.”

In 2018, President Donald Trump and President Uhuru Kenyatta elevated the US-Kenya bilateral relationship to a strategic partnership, and established a Trade and Investment Working Group to explore ways to deepen the trade and investment ties between the two countries and lay the groundwork for a stronger future trade relationship. This year, the two presidents agreed to pursue closer economic ties through the negotiation of a free trade agreement.

The US and Kenya seek to conclude a free trade agreement that will complement regional integration efforts within the East African Community (EAC), as well as the landmark African Continental Free Trade Area. The two countries recognise that an agreement between them has the potential to serve as a model for additional agreements across Africa, including with other EAC partner states.

Click here to read various industry views on the pact – and why apparel-specific provisions are the focal point of the debate.