Details of Kenya-US Trade & Investment Pact
In late January, President Uhuru Kenyatta travelled to the United States in a bid to cement a agreement between the two countries. The Kenya-US trade and investment pact will also be a model for future deals that the US signs with other Sub-Saharan Africa nations.
Therefore, what really does the agreement encompass?
- Support of the SME sector, site visits will be conducted to the Howard University School of Business, so as to exchange information on the U.S. best practices.
- A U.S.-Kenya SME Roundtable to identify and discuss ways to strengthen commercial cooperation in the SME sector and discuss the benefits to SMEs on both sides of reducing barriers and increasing trade between the United States and Kenya.
- Development of a plan to provide technical assistance and trade capacity building with the aim of maximizing Kenya’s utilization of trade benefits under the African Growth and Opportunity Act (AGOA).
- Adoption of a phytosanitary protocol by Kenya that allows American wheat growers in Washington State, Oregon, and Idaho access to Kenya’s $470 million wheat market for the first time in over a decade.
Despite this, there have been complains from African states, claiming that the agreement may jeopardize Kenya’s participation in the AfCFTA. However,President Uhuru Kenyatta has reiterated that Kenya is still steady and ready for the AfCFTA, and the deal with US only seeks to maximize the remaining years of the African Growth and Opportunity Act (AGOA) that ends in 2025.
We believe this Kenya-US trade and investment will complement Africa’s regional integration efforts, including in the East African Community 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. We believe a trade agreement between the United States and Kenya will receive broad bipartisan support in Congress.
United States Trade Representative Robert Lighthizer
Statistics show that the US is an important source of Kenya’s foreign direct investments (FDI), with the country holding an FDI stock of over $405 million in 2018.
Trade between the two countries stands at about $1 billion a year. Over 70% of Kenya’s exports to the United States in 2018 was entered under AGOA.