By Kamau Muthoni
President Uhuru Kenyatta meets with President Donald Trump at the White House, Washington DC.
Kenya’s free trade deal with the United States of America (US) has been
challenged before the East Africa Court of Justice days after the two
countries opened negotiations on
duty-free imports.
Two lawyers, Christopher Oyieko and Emily Osiemo, want the regional
court to invalidate the free trade agreement (FTA), claiming that it
goes against Kenya’s treaty with the other East African Community (EAC)
partners.
According to the two, the agreement between Kenya and the US will lead
to a flooded market, with Uganda and Tanzania being the biggest
casualties.
In the case filed against Kenya’s Attorney General Kihara Kariuki and
EAC Secretary-General Liberat Mfumukeko, the applicants allege that the
agreement exposes the region to a flood of imported goods from the US.
“The actions of the second respondent (Mfumukeko) violate Article 72(3)
of the protocol on establishment of the East African Community Common
Market for failing to ensure the council puts in place a mechanism for
the coordination of trade relations with third parties,” the suit reads.
In February, Kenya and the US announced they were pursuing an FTA that
would be used as a model for similar deals between America and other
African countries.
According to the Ministry of Industrialisation and Trade, the Kenya-US
FTA replaces the Africa Growth and Opportunities Act (Agoa), which is
set to expire in 2025.
Agoa was signed by US President Bill Clinton as a 15-year trade pact
allowing exporters from Africa and several other developing countries
duty-free access to the US market.
President Barack Obama extended it to 2025 during his visit to Kenya in 2015.
In the proposed objectives that guided the negotiations, Kenya said the
new deal is compatible with the World Trade Organisation framework.
“Any EAC partner states that did not participate in these negotiations
at the outset should be allowed to join, subject to terms and conditions
already agreed or accede to the concluded free trade agreement,” states
the document.
In the deal which is now being challenged before the court, Kenya agreed
to lift its decade-long sanction against US wheat. Kenya had for 12
years blocked importation of the cereal from three states due to a wheat
disease known as flag smut.
Worsened relations
The lawyers want the court to annul the deal and, in particular, prohibit the US from exporting its wheat and grains to Kenya.
“The first respondent (AG) failed and neglected to engage the EAC
secretary-general and the council on trade relations and failed to
promote the participation of other EAC community partner states in the
FTA agreement with USA,” they argue.
Kenya’s move to enter a bilateral trade pact with the US and the effects
of the global coronavirus pandemic on the region have worsened the
decline of trade and diplomatic lethargy within the EAC.
Experts now fear that the EAC, one of the world’s most progressive economic blocs, is headed for disintegration.
The two governments argue that the trade deal is crucial for the two countries and will benefit the region.
“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,” said US Trade
Representative Ambassador Robert Lighthizer in a joint statement last
Tuesday.
“We believe this agreement with Kenya will complement Africa’s regional
integration efforts, including in the EAC 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.”
Trade Cabinet Secretary Betty Maina said a predictable free trade
agreement would increase Kenya’s exports to the US and bring new foreign
direct investment to the country.
“Kenya and the United States have strong trade relations demonstrated by
growing exports and imports which have increased over the years,” said
Ms Maina in the statement.
Data from the Kenya National Bureau of Statistics indicates Kenya’s
exports to the EAC stood at Sh140 billion last year against imports of
Sh66.4 billion.
Exports to the rest of Africa stood at Sh224 billion against imports of Sh168 billion.
This indicates Kenya enjoys more favourable trade within Africa than with the US.
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