AGOA
Bilateral deal could undermine African common markets and flood Kenya with cheap maize and chicken.
Kenya’s need to export value-added agricultural products dominated the first round of talks with America after its formal launch on Wednesday last week.
Kenya should abandon or, at the very least, postpone the United States-Kenya Free Trade Agreement negotiations to a later date, civil society groups say in letter to the AfCFTA Secretariat.
AGOA doesn’t expire until 2025, but the industry looks for certainty to the region in the face of the pandemic and upcoming US trade talks with Kenya.
The Ministry of Trade should ensure that eventual agreements promote Uganda’s aspiration for industrialisation and provide the policy space for government to be able to use a range of trade policy instruments.
The announcement immediately drew criticism from the US government, which previously threatened to exclude South Africa from a preferential trade agreement after a disagreement over the levies in 2015.
The US has a stronger manufacturing sector meaning their products are likely to be more competitive than the locally produced commodities.
The US and Kenya are expected to announce negotiations on a free-trade agreement, America’s first such deal with a sub-Saharan country.
The following communication is being circulated at the request of the Delegation of the United States.
The African Union prefers a continent-wide deal with the US while the US wants bilateral deals when AGOA expires.
The US-Africa Strategy seeks to re-position the US and bring it to par with China and Russia.
United States Trade Representative and Kenyan Cabinet Secretary for Industry, Trade and Cooperatives announced the establishment of a US-Kenya Trade and Investment Working Group to explore ways to deepen the trade and investment ties between the two countries.
The United States wants to pave the way for a free trade agreement between Washington and sub-Saharan African countries.
USTR Robert Lighthizer believes the time is right to pursue free trade agreement negotiations with AGOA eligible countries.
Kenya’s trade officials have said they will be taking steps to expand exports and raise the country’s share of new investments during the second edition of Trade Week at the end of this month.
The US hopes to build on AGOA’s success by strengthening bilateral trade relationships in sub-Saharan Africa with the goal of establishing a free trade agreement that could serve as a model for developing countries.
Despite having several trade and investment agreements from 1975, the inability for Africa to build substantial productive capacity has in effect rendered the continent a net importer, unable to meet even its own food requirements.
It is not clear whether the U.S. wants to change the AGOA deal before it expires in 2025 or extend it further - no decision was made on either count.
A more balanced trading relationship is vital in order to maintain support in Congress for AGOA, which allows for duty-free treatment of goods from eligible Sub-Saharan African countries, Lighthizer said.
With the Trump administration’s trade agenda focused on reining in China and renegotiating the North American Free Trade agreement, Africa has barely appeared on the radar screen.
