US optimistic of Kenya trade deal before Biden's exit

 

President William Ruto with his US counterpart Joe Biden

With just about two months to the US presidential elections, set for November 5, Kenya and America are racing against time to conclude trade talks, with a deal expected by year-end.

US ambassador Meg Whitman has indicated the two countries are keen to have a deal before a new administration, in what will be one of President Joe Biden’s achievements on strengthening bilateral ties with its key ally in East Africa.

The two countries are set for the eighth round of negotiations scheduled to September place next month, Whitman has confirmed.

"I really hope we can bring it to fruition by end of this year," Whitman said in Nairobi.

According to the ambassador, a deal can also be sealed during the ‘lame duck’ period.

This is the period between after elections (November) and handing over of power to the elected President, which is normally January 20 of the year following the election.

Labour issues, which are key in President Biden’s administration, are among pending issues Whitman noted.

So far, the negotiating teams where Kenya is led by Trade Principal Secretary Alfred Ombudo K’Ombudo with Assistant US Trade Representative Constance Hamilton leading US team has laid ground on agriculture terms of engagement, environment and workers’ rights.

The two teams have also discussed textual issues on anticorruption, Micro, Small, and Medium-sized Enterprises, and continued conceptual discussions on inclusivity.

Legal teams from both countries are also working on international trade laws, conflict resolution and institutional chapters of the proposed trade agreement.

A senior official at the Kenyan Trade ministry, who is familiar with the process, yesterday confirmed the deal is more than 80 per cent done.

"Negotiations and the entire process are at the tail end. It is within the target that had been set, as you know the two presidents wanted it done before the year ends. It is possible even earlier than that," she told the Star.

During a meeting at White House in May, President William Ruto and Biden called on the negotiating teams to fast-track the talks, in what was seen as a push to have a deal before the latter’s term ends.

Biden has since withdrawn from re-election with his deputy Kamala Harris now the official Democrat candidate for the US presidential election, pitted against Republicans’ Donald Trump.

The two countries had hoped to have a deal by December last year but talks stretched into this year.

They are keen to avoid a repeat of previous cases where elections and change of regime slowed down the process, which commenced in July 2020 during former Presidents Donald Trump and Uhuru Kenyatta's tenures.

After the US elections in November 2020, President Joe Bidens’s administration took time to review part of the pact before initiating a fresh round of talks.

Kenya then went into an election in August 2022, which saw then Deputy President William Ruto ascend to power, with his administration taking over the negotiations.

Ruto and Biden’s administrations then settled to seek a deal under what is now known a Strategic Trade and Investment Partnership (STIP).

With a bilateral deal, Kenya is keen to tap at least five per cent of the US market, which has the potential to earn the country more than Sh2 trillion in export revenues annually.

Last year, Kenya's exports to the US were valued at Sh62.3 billion, down from Sh79.9 billion, the Economic Survey 2024 indicates.

More than half of Kenyan exports to the US are comprised of textile and apparel, macadamia, coffee, titanium ores and concentrates, and black tea.

Trade is however in favour of the US as Kenya spent Sh112.8 billion on imports from the US market, an increase from Sh93.4 billion in 2022.

Kenya is also a beneficiary of African Growth and Opportunity Act (AGOA), which is also in the process of being extended beyond the September 2025 expiry.

The US Congress has put forward proposals that would see the pact, which provides duty-free treatment to goods from specially designated sub-Saharan African nations, extended to 2041 and expanded to all African counties.

by MARTIN MWITA