The United States and Kenya have embarked on a significant journey towards strengthening their economic ties with the initiation of trade agreement negotiations. Announced by President Donald J. Trump following a meeting with Kenyan President Uhuru Kenyatta at the White House, this move signals a deepening partnership between the two nations. For businesses and international observers alike, understanding the political landscape of Kenya, including the tenure of its leadership, is crucial when assessing the long-term implications of such trade agreements. How Long Does Each Leader Serve In Kenya, and how might this political cycle influence the trajectory of this new trade partnership? This question becomes pertinent when considering the sustained commitment required for successful international trade collaborations.
Robert Lighthizer, the United States Trade Representative, emphasized Kenya’s pivotal role in Africa, highlighting it as “a recognized leader across the continent, an important strategic partner of the United States.” He further articulated the immense potential for enhanced economic and commercial relations between the two countries. The Trump administration envisions this agreement as a comprehensive, high-standard model not just for Kenya, but for broader application across Africa, demonstrating a strategic approach to fostering trade relationships on the continent.
This bilateral agreement is designed to be complementary to Africa’s ongoing regional integration efforts. Crucially, it is intended to bolster initiatives like the East African Community and the African Continental Free Trade Area (AfCFTA). The United States has voiced its continued support for the AfCFTA, recognizing its potential to unlock significant economic opportunities across the continent. A successful trade agreement with Kenya is seen as a vital step in this larger vision and is expected to garner bipartisan support within the US Congress, underscoring its broad appeal and potential for longevity beyond immediate political cycles.
The formal announcement of these negotiations follows the established protocols of the Bipartisan Congressional Trade Priorities and Accountability Act of 2015, also known as Trade Promotion Authority (TPA). Ambassador Lighthizer will officially notify Congress, initiating consultations as mandated by the TPA. Furthermore, the United States Trade Representative (USTR) will seek public input through notices in the Federal Register, ensuring a transparent and inclusive approach to shaping the direction and content of these crucial trade negotiations. Objectives for the negotiations will be published by the USTR at least 30 days prior to the commencement of formal talks, further demonstrating a commitment to open and well-planned trade discussions.
This development is underpinned by the ongoing work of the U.S.-Kenya Trade and Investment Working Group. Established in August 2018 by President Trump and President Kenyatta, this group has been instrumental in building the foundation for a stronger bilateral trade relationship. The third meeting of the Working Group in Washington this week yielded several significant outcomes, showcasing tangible progress prior to the formal trade agreement negotiations.
One notable achievement is Kenya’s adoption of a phytosanitary protocol. This crucial step opens up Kenya’s substantial $470 million wheat market to American wheat growers from Washington State, Oregon, and Idaho for the first time in over a decade. This breakthrough illustrates the immediate positive impacts of focused trade discussions and the potential for mutual benefit.
Furthermore, the Working Group is developing a detailed plan to provide technical assistance and trade capacity building to Kenya. This initiative is specifically aimed at maximizing Kenya’s utilization of the trade benefits available under the African Growth and Opportunity Act (AGOA). By enhancing Kenya’s capacity to engage in international trade, the partnership aims to ensure that the benefits of AGOA are fully realized, fostering sustainable economic growth.
Recognizing the vital role of small and medium-sized enterprises (SMEs) in both economies, a U.S.-Kenya SME Roundtable has been established. This forum is designed to identify and discuss concrete strategies for strengthening commercial cooperation within the SME sector. Discussions will center on how reducing trade barriers and increasing trade between the United States and Kenya can specifically benefit SMEs on both sides, driving innovation and job creation.
In a practical exchange of knowledge and best practices, a site visit was organized to the Howard University School of Business’ Small Business Development Center. This visit facilitated information sharing on U.S. best practices for supporting the SME sector, a priority area for President Kenyatta’s administration. Such exchanges underscore a commitment to collaborative learning and the application of proven strategies to bolster SME growth in Kenya.
Background on US-Kenya Trade Relations
Current trade figures highlight the existing economic relationship between the two nations. Annual wheat exports to Kenya from various US regions reached $27 million between January and November 2019, indicating a pre-existing demand that is now set to expand significantly with the new protocol. Kenya’s overall demand for wheat is projected to increase in the coming years, driven in part by the expansion of its food service sector, presenting further opportunities for American exporters.
The total trade volume between the United States and Kenya is approximately $1 billion annually. Significantly, over 70 percent of Kenya’s exports to the United States, valued at $466 million in 2018, entered under the AGOA framework. This reliance on AGOA underscores the importance of continued and enhanced trade agreements to ensure sustained economic benefits for Kenya. As the two nations move towards a more formalized trade agreement, the foundation laid by AGOA and the progress of the Trade and Investment Working Group provide a strong platform for future success. The focus on SMEs, agricultural trade, and capacity building suggests a comprehensive approach aimed at fostering long-term, mutually beneficial economic growth.
