Business Daily | 25 June 2020
Kenya sets terms ahead of trade talks with US
Kenya has moved to fence in its key economic segments as it prepares for the first round of free trade area (FTA) negotiations with the US from July 9 to 17.
Under the negotiation objectives released on Tuesday, the Trade ministry says Kenya will initially retain duty on US imports when the FTA takes effect.
The tariffs on the US products will, however, be removed gradually, starting with steep tax cuts on items deemed to be of interest to the economy, the official wish-list states.
And while the US has asked Kenya to open government tenders to its firms, Kenya says it will progressively do so, but will seek to shield strategic national agencies from provisions of the FTA.
“The FTA negotiations are aimed at ensuring free trade with the US when African Growth Opportunity Act (Agoa) comes to an end on September 30, 2025. Otherwise the bilateral trade would relegate to World Trade Organisation’s arrangements which are not favourable to Kenya,” Trade Secretary Betty Maina tweeted shortly after releasing Kenya’s objectives.
Kenya says it will go for rules of origin that encourage regional value chains to enable local firms to source materials from across the existing regional blocs. The rules, the objectives state, must not only be asymmetrical as to recognise the different levels of development between the US and Kenya, but also need to incentivise development of the nascent agricultural and industrial sector.
As part of the FTA push, Kenya commits to strengthen its anti-graft war and strengthen its intellectual property laws.
The ministry states: “The FTA negotiations provide the country with a unique opportunity to enter into a bilateral trade and development co-operation negotiations with one of the global economic powerhouses which is Kenya’s seventh overall trading partner.”
In its negotiation objectives published in May, the US has expressed its wish to have Kenya remove tariffs on its agricultural and industrial goods. The US also wants Kenya to open its maritime, textile, telecoms, financial services, and pharmaceutical industries.