Kenya Us Trade Agreements

Kenya-US Trade Agreements: Opportunities and Challenges

Kenya is quickly emerging as one of the top East African economies with a growing population and a vibrant private sector. The United States has recognized Kenya`s potential as an economic powerhouse and has been exploring opportunities to deepen trade relations between the two countries.

In February 2020, the US and Kenya announced plans to start negotiations on a free trade agreement (FTA). The FTA aims to eliminate barriers to trade and investment, increase market access, and support economic growth and development in both countries. The negotiations are expected to start soon despite the recent change of administration in the US.

Implications of the Kenya-US FTA

The Kenya-US FTA will provide an opportunity for Kenyan businesses to access the US market, which is the world`s largest economy. This will boost the country`s exports, create jobs, and diversify Kenya`s export markets away from Europe and China. The US is a net importer of agricultural products, and Kenya`s agricultural sector, which employs over 70% of the population, will benefit significantly from the agreement. Kenya exports products such as tea, coffee, flowers, and fruits, which have a ready market in the US. The agreement will also pave the way for the US to invest in Kenya`s infrastructure, technology, and other sectors.

However, there are concerns that the agreement could have adverse effects on Kenya`s local industries. US products are more advanced and cheaper than local Kenyan products, which could lead to unfair competition and the displacement of local businesses. The Kenyan government needs to ensure that there are safeguards in place to protect local industries, promote fair competition, and prevent dumping of cheap US products into the Kenyan market.

Challenges Facing the Kenya-US FTA

The Kenya-US FTA will face several challenges, including political and economic hurdles. Firstly, Kenya is a member of the East African Community (EAC), which is a customs union comprising six East African countries. The EAC has a common external tariff on goods, and any trade agreement signed between Kenya and the US must take into account the interests of the other EAC member states.

Secondly, the US has been critical of Kenya`s human rights record, particularly on issues such as electoral reforms and the treatment of the LGBTQ+ community. The US has been known to use trade agreements to pressure countries to improve their human rights records, and the Kenya-US FTA negotiations will likely be affected by this.

Lastly, the Covid-19 pandemic has disrupted global trade, and it is uncertain how it will affect the Kenya-US FTA negotiations. The pandemic has led to a decline in trade volumes, and countries have turned inwards to protect their local industries. This could slow down the negotiations and delay the signing of the FTA.

Conclusion

The Kenya-US FTA presents an opportunity for Kenya to deepen its trade relations with the world`s largest economy and open up new markets for its products. However, the agreement must take into account the interests of other EAC member states, protect local industries, promote fair competition, and ensure that it is not used to pressure Kenya on human rights issues. The negotiations will face several challenges, including the Covid-19 pandemic, but with the right policies and safeguards in place, the Kenya-US FTA can be a win-win for both countries.