Kenya’s hurdles in trade negotiations with United States
The Standard | 7th November 2023
By David Monda
American President Joe Biden recently pledged to make Nairobi the investment magnet in Africa.
For this to happen, Kenya and the United States must make considerable progress towards a bilateral trade deal under the Strategic Trade and Investment Partnership (STIP) framework.
The trade talks highlight initial focus areas into which major concerns for Kenya emerge. These are in negotiations around agriculture, good regulatory practices, workers’ rights and environmental sustainability.
In agriculture, Kenya should ensure its bilateral trade deals with US do not undermine broader African trade interests in the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) or the African Continental Free Trade Area (AfCFTA).
The continental rhetoric by Kenya at African Heads of State meetings of the African Union (AU) does not always match the veracity with which Kenya pursues its parochial national economic interests.
Kenyan access to US agricultural markets for its produce will need to be negotiated for a win-win outcome. The US agricultural sector is highly subsidised, corporatised, and industrialised.
Special interests in agriculture create tariff and non-tariff barriers to imports that compete with American produce. This is especially true with the economic nationalist environment created by Donald Trump and continued by the Biden administration.
Kenya will run into many of these trade barriers. Kenya will also struggle negotiating around anti-dumping measures, especially in the poultry sector where big US agro industry, which is heavily subsidised, can flood Kenya with cheap poultry products.
In relation to good regulatory practices, intellectual property emerges. When US companies invest in Kenya, the government does not have patent and intellectual property laws keeping pace with innovation, to protect Kenyan intellectual innovation in Artificial Intelligence (AI) and information technology more broadly. There is a danger of the next MPESA being shipped off to Silicon Valley. Lastly, workers’ rights and environmental sustainability need key review. US corporate investment in Africa need not lead to a race to the bottom. Corporations have a social and legal responsibility to protect workers’ rights and the environment.
Of concern is the glaring absence of the Central Organisation of Trade Unions (Cotu) and workers’ representatives in the negotiations around workers’ rights.
On environmental sustainability, private corporate interests will need to be regulated to ensure the common pool environmental resources they use are sustainably exploited.
Both Kenyan and US governments should create frameworks for investors in both countries to develop green technology industries that reduce their carbon footprint and transfer technologies for a cleaner and safer environment. Trade negotiation is about compromise. The Kenyan and US teams will engage in tough negotiating banter to advance and protect the interests of their representative states.