(PHOTO CREDITS: Courtesy THE EAST AFRICAN)
The recent announcement by the US and Kenya that they will initiate negotiations for a free trade agreement (FTA) has elicited concern within the African trade community.
Although the process, road map and end date of these negotiations remain to be worked out, it suffices that we reflect on possible reasons for this initiative, its ramifications on Kenya’s role as a lead proponent of the African Continental Free Trade Area (AfCFTA) and its legitimacy in light of Kenya’s membership of East African Community’s Customs Union.
While scant detail has been shared, Kenya is presenting the initiative as a proactive action in anticipation of the end of African Growth and Opportunity Act (Agoa). This preferential American legislation under which 39 African countries export a range of products to the US duty free is facing its latest end date in 2025.
Agoa has helped US to become Kenya’s third largest export market after EU and Uganda, accounting for about $400 million — nearly 10 per cent of the country’s total exports.
The second argument has been that Washington has promised Nairobi a graduation to the Millennium Challenge Account (MCA). This is a grant facility created by former President George Bush to reward friendly developing countries which pursue open market and democratic governance reforms.
