Kenya eyes new trade agreement with US next week

Foreign Affairs Principal Secretary Macharia Kamau. FILE PHOTO | NMG  

By GERALD ANDAE
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Summary

• The new trade deal, which the US has hinted will be used as a model for other African countries when the current trade pact under Agoa ends in five years, is expected to boost trade with America.
• It is expected to be reached next week when President Uhuru Kenyatta will be visiting America on invitation of the US Congress to attend a prayer breakfast meeting.
• Washington had in August last year announced it was pursuing a free trade deal with a sub-saharan country that it did not disclose.

Kenya is expected to sign a new free trade deal with the US next week in a move that could make the country the only one in sub-Saharan Africa to have reached such a pact with Washington.

The new trade deal, which the US has hinted will be used as a model for other African countries when the current trade pact under Africa Growth and Opportunity Opportunity Act (Agoa) ends in five years, is expected to boost trade with America.

It is expected to be reached next week when President Uhuru Kenyatta will be visiting America on invitation of the US Congress to attend a prayer breakfast meeting.

An official in the Ministry of Foreign Affairs confirmed that Kenya will be entering into a new pact but did not give details.

“We are working on the final deals of the trade agreement which will be signed during President Kenyatta’s visit in the US,” said the official, requesting anonymity.

Washington had in August last year announced it was pursuing a free trade deal with a sub-saharan country that it did not disclose.

Foreign Affairs Principal Secretary Macharia Kamau did not respond to our calls, but he is quoted by Bloomberg confirming the trade agreement.

“The nations expect real progress on an agreement by the third quarter of this year, depending on how the negotiations go,” Mr Kamau told Bloomberg.

Exports of duty-free goods to the US under the Agoa grew by 25 percent in 2018 marking one of the major leaps in nine years, according to Kenya National Bureau of Statistics.

The goods, mainly textile products, increased from Sh33 billion in 2018 to Sh41.5 billion last year. Reasons for the reduction were not given.

The Agoa programme allows Kenya and other Sub-Saharan African countries to export selected goods at preferential terms to the US, exempting them from paying tax.

The initiative, which was expected to end in 2015 after an initial deadline of September 2012, was extended by US lawmakers for another period of 10 years.

It is not clear on what the new trade agreement will entail or the goods that the country will be keen to trade with the US, given that at the moment over 6,000 goods are allowed in America under the Agoa regime.