Congressional leaders rallied around the idea of a Free Trade Agreement for Kenya, while the Biden Administration continues to pursue its U.S.-Kenya Strategic Trade and Investment Partnership (STIP) with its associated “high-standard commitments.”
STIP is inteneded for the United States and Kenya to resolve various nontariff trade issues— including on agriculture, anti-corruption efforts, digital trade, environmental issues, workers’ rights, and trade facilitation.
STIP does not address tariff barriers, as would a comprehensive FTA. The United States provides unilateral duty-free treatment to most Kenyan exports through the Generalized System of Preferences (GSP) and AGOA.
The two top trade committee Democrats are calling on the Administration to turn the current trade and investment talks with Kenya into full-blown negotiations on a comprehensive free trade agreement.
The call from Senate Finance Committee Chair Ron Wyden (D-Ore) and House Ways and Means Committee ranking Democrat Richard Neal (Mass) comes despite US Trade Representative Katherine Tai’s repeated statements that the Administration is not interested in negotiating traditional free trade deals.
It also comes on the eve of a state visit by Kenyan President Ruto.
The Administration currently is negotiating what is calls a Strategic Trade and Investment Partnership with Kenya that focuses on a limited number of issues. The fourth round of STIP talks concluded earlier this week, with USTR predicting completion of the agreement by year’s end.
In a letter to Ms. Tai, the two Democrats wrote that “A US-Kenya FTA, with strong and innovative rules and enforcement mechanisms, would enhance US competitiveness in Kenya and encourage the Kenyan government to make high-standard commitments and reforms in critical areas, including raising and enforcing labor standards in Kenya’s informal economy and safeguarding the environment from degradation. “An enforceable and comprehensive trade agreement with Kenya will help to create a standard for engagement with African nations moving forward.”
The United States and Kenya already have strong trade ties through the African Growth and Opportunity Act program, the lawmakers noted. Kenya is one of the fastest-growing economies and a gateway into other African markets, they said.
“A comprehensive and high-standard U.S.-Kenya FTA with reciprocal market access commitments that reflect our shared aspirations and democratic values would allow U.S. businesses to tap into this growing market and expand economic opportunity for American workers, innovators, farmers, and ranchers,” they wrote.
“You now have a unique opportunity to ensure Americans can enjoy similar access to the Kenyan market through robust and durable two-way trade, while strengthening worker rights, human rights, environmental protections and good governance in Kenya.”
The two Democrats said they support renewing and reforming AGOA, but “unilateral preferences can only go so far to increase development and ensure sustainable and inclusive economic partnerships.”
House Ways and Means Committee Chairman Jason Smith (R-Mo) joined the chorus of lawmakers yesterday urging President Biden to elevate current trade talks with Kenya to a comprehensive free trade agreement.
Mr. Smith’s statement came following a meeting with Kenya President Ruto, who is here for a state visit that culminated last night in a state dinner at the White House.
The Administration is negotiating a limited Strategic Trade and Investment Partnership with Kenya, rather than a full scale FTA. The previous Administration had intended to negotiate a FTA with Kenya, but President Biden favors trade partnership agreements over the traditional FTA.
The Ways and Means Chairman argued that the current Administration should have stuck to the FTA plans.
“It is vital that the United States reengages with Kenya to show leadership on the African continent and counter China’s malign influence. Only comprehensive free trade agreement negotiations can address the substantial tariffs facing U.S. exports, including agricultural products, with meaningful enforcement mechanisms – something that frameworks, partnerships, and dialogues cannot accomplish.
“Additionally, the African Growth and Opportunity Act continues to enjoy strong bipartisan support, and I look forward to working with President Ruto and other African leaders as Congress considers next steps to renew and reform this important program prior to its expiration next year.”
The United States and Kenya will hold a sixth in-person negotiating round under the Strategic Trade and Investment Partnership (STIP) in Mombasa, Kenya, from June 3-7.
This round of negotiations will primarily cover five topics: (1) agriculture; (2) customs, trade facilitation, and enforcement; (3) environment; (4) good regulatory practices, and (5) workers’ rights and protections.
U.S. Chamber of Commerce’s U.S.-Africa Business Center hosted the U.S.-Kenya Business Forum featuring the President of Kenya William Ruto, U.S. Vice President Kamala Harris, U.S. Secretary of Commerce Gina Raimondo, and U.S. Chamber President and CEO Suzanne P. Clark.
The Forum featured speeches and discussions on deepening the bilateral economic relationship and the facilitation of over $2 billion in new and expanded commitments between the U.S. and Kenyan governments, businesses, and investors
“I strongly believe that we are at a moment where we should revisit and upgrade and update the narrative of the relationship between the United States and the continent of Africa,” said Vice President Harris. “When you think about the continent, the median age is 19 years old. It is predicted that by 2050, 1 in four people occupying space on Mother Earth will be on the continent of Africa. So, from that perspective, many could rightly argue that the future is on the continent of Africa.”
The Business Forum featured significant deal signings on two stages between the U.S. and Kenyan public and private sectors, including nearly $2 billion worth of deals inked by Google, Marathon Digital Holdings, Acorn Holdings Limited, Siemens Healthineers, the U.S. International Development Finance Corporation, Kenyan company M-KOPA, Semiconductors Technologies Limited, and Microsoft.
Last month, the U.S. Chamber led a delegation of 30 business leaders to Kenya for the AmCham East Africa Business Summit, to coincide with Secretary Raimondo’s visit to Nairobi.
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