Kenya and the US are poised to finalize a trade deal by October, according to recent developments, as negotiations progress into the fifth round in Washington this week. Trade PS Alfred K’Ombudo is leading the Kenyan negotiating team, with talks reportedly reaching the “tail end.”
Both President William Ruto and US President Joe Biden, slated to meet in Washington next week Thursday, are expected to urge their teams to conclude the negotiations and reach a deal before America’s November elections. Investments, Trade, and Industry Cabinet Secretary Rebecca Miano confirmed that four chapters have been closed, though specific details of the agreed terms have not been disclosed.
“We are currently looking at the labour chapter, MSMEs, agriculture, environment and anti-corruption. We have a timetable to finalise them in the shortest time possible,” Miano said.
She said the negotiations have been smooth and they are making good progress, are are looking forward to concluding the deal in the next couple of months.
Insiders familiar with the negotiation process however put the progress at 80 per cent, with a target to having a deal in five months time.
“It is at the tail end and with the way things are going, it is possible to have a deal by October or even earlier but this year will not end,”
During the American Chamber of Commerce in Kenya (AmCham) 2024 Business Summit in Nairobi last month, President Ruto hinted that a Strategic Trade and Investment Partnership (STIP) between Kenya and the US should be ready for implementation in the second half of this year.
Although Kenya currently benefits from duty-free access to the US market under Agoa, which grants access to up to 6,400 product lines, the country is eager to establish the Strategic Trade and Investment Partnership to boost investment, foster sustainable economic growth, and support regional economic integration in Africa.
Negotiations for the partnership began in July 2022, aiming to enhance investment and promote economic growth. The process, initially proposed in 2020, was disrupted by the Covid-19 pandemic and experienced delays due to changes in administrations in both countries. Talks commenced during the tenures of former Presidents Donald Trump and Uhuru Kenyatta, with a fresh round initiated by President Biden’s administration after the US elections in November 2020.
Following Kenya’s elections in August 2022, Deputy President William Ruto’s administration took over the negotiations, aiming to establish a Strategic Trade and Investment Partnership. With hopes of accessing at least five percent of the US market, Kenya anticipates potential export revenues exceeding Sh2 trillion annually. Key export sectors include textiles, apparel, macadamia, coffee, titanium ores, and black tea.
The agricultural, manufacturing, textile, and mining sectors stand to benefit significantly from the partnership, with Kenya also prioritizing SMEs and the development of Special Economic Zones and Export Processing Zones to boost exports and reduce imports. President Ruto’s visit, accompanied by industry leaders and strategic state agencies, is expected to result in additional investment deals, as Kenya seeks to attract US companies in a drive for Foreign Direct Investment.
Kenya is particularly interested in attracting US investments across various sectors, including agriculture, health, ICT, textile, green energy, manufacturing, and tourism. Additionally, the country aims to expand its product offerings and tap into a larger market under the Agoa deal, which is anticipated to be extended to 2041. Despite being the second-largest exporter to the US under Agoa, Kenya has yet to fully capitalize on the agreement, with only the textile and apparel sector experiencing substantial gains.
