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Kenya Enters Talks With U.S. on Free Trade Agreement

Port of mombasa
Port of Mombasa (KPA file image)

Published May 6, 2022 10:07 PM by Njiraini Muchira

Optimism is building up in Kenya after the Biden administration sanctioned formal negotiations that could see the two countries sign a free trade agreement (FTA), following a prolonged period of uncertainty over the fate of a deal that was mooted during the Trump administration.  

A team of U.S. trade experts led by Assistant United States Trade Representative (USTR) for African Affairs Constance Hamilton traveled to Kenya to kick start the trade talks this week, the first formal engagement between Washington and Nairobi as the two countries pursue an FTA. 

Commencement of the negotiations comes just weeks after the U.S. government submitted President Biden’s 2022 Trade Policy Agenda in which the administration signaled intentions to pursue the FTA by working with Kenya to deepen trade and investment relationship.

“The U.S. is committed to continue working with Kenya to deepen our trade and investment relationship, including by advancing worker-centerd trade policies and promoting regional and continental economic integration in Africa,” said the report, released in March.

The report added that the Biden Administration will hold further conversations with the Kenyan government to establish a shared vision and partnership for economic resilience and to promote investment, equitable and inclusive development, sustainable trade, and African Continental Free Trade Area (AfCFTA) implementation.

“The Biden Administration also views this approach as one to be built upon to include other areas of mutual interest and to serve as a model for engagement with other willing countries on the continent,” noted the report.

While the two countries have not provided a timeline on the negotiations and when the FTA is likely to be signed, the talks provide a clear indication that the Biden administration perceives the signing of an FTA with Kenya as critical in deepening trade relations.

Kenya is desperate to sign the pact with Washington before the expiry of the Africa Growth and Opportunity Act (AGOA) that allows Sub-Saharan African countries to export about 6,000 products to the U.S. duty-free. The act is set to expire in 2025. The U.S. Trade Representative report shows that sub-Saharan Africa exports to the U.S. under the AGOA treaty increased to $6.7 billion in 2021 compared to $4.2 billion in 2020. This was driven by an increase in imports of oil (up 165.9 percent) to $1.9 billion in 2021 compared to $707.3 million in 2020.