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. As an investment vehicle, the US Kenyan agreement should be modelled on the Jordanian model of “qualified industrial zones,” which has increased bilateral trade between the two states tenfold since its inception in 2001. In addition to the opening of trade negotiations, the United States and Kenya have agreed on a framework for strategic cooperation to provide technical assistance and trade capacity building in Kenya to maximize Kenya`s exploitation of the trade benefits of the African Growth and Opportunity Act for the remaining years of the preferential program, which is due to expire in 2025. The framework will also support the development and competitiveness of Kenya`s major agricultural value chains. It is important to note that the conclusion of a free trade agreement with the United States will have a negative impact on integration efforts within the framework of the East African Community (EAC) and the Continental Free Trade Agreement (CFTA). Kenya`s commitments under this framework will be meaningless when an external free trade agreement, such as the one proposed, enters into force. In addition, the African Growth and Opportunity Act (AGOA), under which African countries export goods to the United States, expires in 2025. However, we note that it is the U.S. Congress that has the mandate to renew AGOA.
The U.S. private sector has provided positive indications of the expansion of agoA. Therefore, we do not see the need to negotiate a free trade agreement at a time when AGOA renewal is possible. The debate on the post-AGOA future must be conducted jointly by African countries and not a single country that hastens to conclude an agreement of this magnitude. Such a move will give all other African countries counterproductive ground in their future trade relations with the United States, as it will give the United States a pole position. A2: Following the announcement of the negotiations between the United States and Kenya, Lighthizer stressed that his goal was to “negotiate and conclude a comprehensive and high-quality agreement with Kenya.” The presentation of a formal communication to Congress on the government`s intention to negotiate a free trade agreement with Kenya confirms that the government will abide by the procedures established by the Trade Promotion Authority (TPA) Act 2015 and is the clearest signal that the government is seeking a solid agreement, not a “mini-deal” or incremental negotiations similar to those with China and Japan. The TPA contains a long list of objectives entrusted by Congress to the government in the area of trade negotiations. These objectives address issues that go beyond tariffs and quotas, including services, investment, intellectual property, labour, the environment, non-tariff barriers, dispute resolution, digital trade and state-owned enterprises. If the government maintains its intention to negotiate a comprehensive agreement and establish a new model, it is unlikely that an agreement can be reached and sent to Congress for a vote this year. On the other hand, from the beginning of the negotiations, the government could decide to seek a phased agreement, as was the case in the case of Japan, which could mean that a modest first phase would not require measures from Congress. Kenya needs to be aware of its development strategy and know how it fits together.
Reciprocal trade between Kenya and the United States essentially puts two highly unequal countries on the path to greater harmonization of rules and policies. This is a total lag. Thus, California alone is the fifth largest economy in the world.