Kenya, U.S. negotiate new trade partnership as AGOA expires

With the African Growth and Opportunity Act (Agoa) set to expire in 2025, the Kenyan government is actively negotiating a new trade partnership with the United States.

The purpose of the discussions was to expand and strengthen trade relations between the two countries.

Investment, Trade and Industry Minister Salim Mvurya said on Friday the new agreement would strengthen and expand business opportunities between Kenya and the United States.

The talks focused on the Strategic Trade and Investment Partnership (STIP), which covers a number of key areas including agriculture, health measures, customs procedures, climate change action and digital trade regulations.

“The talks covered several key areas aimed at strengthening trade and investment between Kenya and the United States. These included agricultural strategies, health measures to ensure the safety of exported goods, and simplified customs procedures to facilitate trade,” Mvuliya said.

The partnership will address climate change through collaborative efforts and improve the investment environment by perfecting service rules and supporting micro, small and medium-sized enterprises, he said.

Another key focus is to harmonize rules and regulations on digital trade to facilitate smoother and more integrated commerce.

A Kenyan delegation led by Abubakar Hassan, principal secretary at the Kenyan State Council’s Department of Investment Promotion, met with officials from the Office of the United States Trade Representative in Nairobi to advance the negotiations.

The goal of the Science, Technology and Innovation Policy Program is to promote investment, drive sustainable economic growth, and support regional economic integration in Africa.

The African Growth and Opportunity Act, a U.S. trade law enacted in 2000, provides eligible sub-Saharan African countries with duty-free access to the U.S. market for certain goods.

The agreement was originally scheduled to run from October 2000 to September 2008 and has been extended several times, most recently until September 2025.

Strengthening trade relations

The new partnership is expected to build on the success of the African Growth and Opportunity Act and cover various areas, including support for micro, small and medium-sized enterprises.

Mvuliya stressed that the initiative will play a key role in strengthening trade relations and economic cooperation between Kenya and the United States.

The long-delayed trade talks come as the Biden administration seeks to strengthen security and economic ties with its largest ally in East Africa in the face of China’s growing influence in the region.

One of the largest and most influential U.S. business lobbying groups and a top U.S. trade lawmaker urged the Biden administration to speed up Trump-era trade talks with Kenya, putting pressure on Washington to complete the negotiations.

They also want Washington to engage in dialogue with Nairobi, building on the model of the original or preliminary proposal for a free trade agreement with Kenya initiated by Biden’s predecessor.

They said such a trade deal would have numerous benefits not only for the United States but also for Kenya and would pave the way for business and investment by American companies and their local counterparts.

Kenya and the United States formally launched negotiations on a bilateral trade agreement in July 2020, and the two countries hope that the agreement can serve as a model for other agreements in Africa.

However, a proposed free trade agreement between Nairobi and Washington has been plagued by delays and uncertainties, casting doubt on the Biden administration’s commitment to reaching the deal.

The Biden administration has previously called for a reshaping of the goals of the original bilateral agreement signed during the Trump administration, and some of the negotiating goals set by the Trump administration may be canceled.

The Biden administration has instead launched negotiations for an “investment partnership” with Kenya, seeking to boost trade through non-tariff means.

His officials said earlier that President Biden wants to “move beyond the old free trade agreement model and focus more on today’s economic realities and the lessons of the past 30 years.”

(Additional reporting by Brian Ngugi)