(PHOTO CREDITS: Courtesy BUSINESS DAILY)
Kenya and the United States are gearing up to start negotiations on a possible Free Trade Agreement (FTA). Based on the US negotiating objectives released in May, Washington is hoping for a “comprehensive, high-standard agreement” that among other things secures comprehensive duty-free market access for US goods, services and investments.
No sector of the Kenyan economy is off the table including sensitive sectors like agriculture and textile.
Nairobi currently enjoys preferential access to the US market under the African Growth Opportunity Act (AGOA), which is set to expire in 2025.
The Trump administration wishes to replace the AGOA preferential scheme with a deal that among other things ensures zero tariffs on all goods, zero restrictions on foreign direct investment, services, and cross-border data flows, as well as zero discriminatory non-tariff barriers.
A comprehensive trade deal between the No. 1 economy in the world and the No. 67 economy in the world could potentially spur economic growth and improve living standards in Kenya but, from every indication, is fraught with major problems, perils, and pitfalls for Kenya and regional integration efforts in Africa.
Despite public announcements of impending talks, a trade deal is not inevitable. Given the significance and likely impact of a possible Kenya-US deal, Nairobi should, for starters, be guided by these four Rs: Reflect, Respect, Resolve and Re-imagine.
