The Kenya Private Sector Consortium has voiced its support for the ongoing Kenya – US Free Trade negotiations.
Composed of the American Chamber of Commerce in Kenya (AMCHAM), the Kenya Private Sector Alliance (Kepsa), the Kenya Association of Manufacturers (KAM) and the Kenya National Chamber of Commerce and Industry (KNCCI), the organization have endorsed the process.
The four private sector organizations see the negotiations as an opportunity for expanded, fair and balanced trade between the two countries, that will catalyze mutual economic growth, they said in a joint statement on Thursday evening.
“We fully support the efforts of Kenya and the United States to negotiate a comprehensive and high-standard trade agreement to grow two-way trade and private sector investment,” said Nick Nesbitt, Chairman of the Private Sector Consortium on the Kenya – U.S. Free Trade Agreement (FTA).
He is also Chairman of the Kenya Private Sector Alliance and the East Africa Business Council.
Kenya and the United States have a long history of commercial ties dating back over 70 years.
The announcement in March 2020 of the intention to negotiate a bilateral trade agreement between the two countries marked a pivotal juncture in the relationship and signalled a deepening of Kenya – U.S commercial cooperation.
The two countries currently trade under the African Growth and Opportunity Act (AGOA) agreement which is set to expire in 2025.
Despite having this agreement in place, trade between Kenya and the US remains limited with two-way goods trade registered at $1.1 billion (Sh117.8 billion) in 2019.
Through the new agreement, Kenya stands to benefit from increased trade in goods and services, increased Foreign Direct Investment (FDI), the transfer of technology, knowledge, and know-how, the consortium notes.
This, they say will enhance the local skill base and boost the competitiveness of locally produced goods and services.
This, in turn, will enable greater access and expansion of Kenyan products and services into markets in the US and across Africa in anticipation of the full implementation of the African Continental Free Trade Area (AfCFTA).
Kenya being East Africa’s largest business, financial, and transportation hub, with 80 per cent of East Africa’s trade flowing through Mombasa Port, the US stands to benefit from access to diversified supply chains, local partnerships, markets, and expansion opportunities which will give stability and growth to American businesses and the U.S. economy.
Phillipine Mtikitiki, AmCham Kenya Board President said:“A comprehensive, rules-based system allows for increased ease of trade and doing business between the two countries which can spur mutual prosperity, a win-win situation where both countries benefit from growth in trade and private sector investment leading to job and wealth creation”.
On his side, KNCCI President Richard Ngatia said: “This agreement will increase access to both the Kenyan and the US market driving growth in exports for local manufacturers and accelerated growth of SMEs, the service economy and digital trade.”
He said consumers also stand to benefit from expanded choice of high-quality goods and services as a result of the competition it will create in the market.
The trickle-down effect of the FTA is set to complement and enhance existing regional trade agreements such as the East African Community (EAC) and the AfCFTA.
KAM CEO Phyllis Wakiaga said the FTA has the potential to revitalise both local and regional manufacturing sectors.
“Increased opportunities for export of goods to the US and across Africa with the implementation of the AfCFTA will provide opportunities for complementary linkages in various industry sectors and the development of regional value chains” Wakiaga said.
With diverse global partnerships increasingly key to economic growth in an ever increasingly interconnected world, the current health crisis and economic challenges posed by Covid-19 have underscored the need for stronger economic relationships between countries, Nesbitt notes.
The FTA stands to boost the long-term economic outlook for Kenya, positioning the country as a continental model for economic revitalization through international trade.