Robert Lighthizer, U.S. Trade Representative and Kenya`s Minister of Industrialization, Trade and Business Development Betty Maina, officially began negotiations on trade agreements between the United States and the Republic of Kenya today. The United States has warned Kenya against any manipulation of the shilling against the dollar during ongoing discussions on a bilateral trade pact. The United States is committed to Kenya influencing market forces under the Shilling exchange rate trade agreement against the dollar. This precondition of the Free Trade Agreement (FTA) reflects the previous claims of the… In addition, the environment will also be an important aspect of the agreement. Like the agreement between the United States and Mexico, the environmental chapter will ideally include measures to combat wildlife trafficking, illegal exploitation and fishing, fishing subsidies and marine pollution. This will be particularly important if fisheries are not addressed at the next Ministerial Conference of the World Trade Organization. The main question mark is how a bilateral free trade agreement deals with tariffs, tariffs and trade facilitation. As a member of the EAC Customs Union, Kenya is bound by the group`s common external tariff. The progress of bilateral discussions in this area is not clear.
A1: In January 2018, U.S. Trade Representative Robert Lighthizer said: “I think we will soon choose a well-chosen African country and conclude a free trade agreement with that country. And then, if it is done correctly, it will be a model for these other countries. The decision to choose Kenya does not appear to have been based on its economic importance, but on a combination of geostrategic importance, Kenya`s initiative, to reach an agreement and to have leverage for negotiation. Total merchandise trade between the United States and Kenya reached only $1 billion in 2018. Neither imports nor exports to Kenya are among the top five U.S. trading partners in sub-Saharan Africa. Kenya is only the 98th largest trading partner of the United States. Scott Eisner, president of the U.S.-Africa Business Center at the U.S. Chamber of Commerce, said, “It was really who was willing to raise his hand and who had the greatest political will behind it.” From a political point of view, a trade agreement makes sense.
It protects Kenya from uncertainty over the extension of the African agreement and the vicissitudes of political parties in Washington. As a trade instrument, the benefits of a free trade agreement depend heavily on extending AGOA (or not) after 2025 under President Trump or Biden. Regional integration within East Africa and the continent To achieve this, Kenya would have to negotiate liberal rules of origin. Such rules should not overly limit investors to using only U.S. or Kenyan inputs for Kenyan exports in order to enter the United States duty-free. The goal should be to add a threshold for rules of origin not exceeding 30% of the value. The continued search for an agreement with the United States, despite these regional frustrations, also rests on the history and experience of the European Union and the ABC on the Economic Partnership Agreement (EPA). While Kenya and Rwanda ratified the EPA in September 2016, the agreement with other EAC members has been stalled and has yet to be signed.