Kenya and the US are likely to have a conclusive trade deal by October, latest developments indicate, as negotiations enter the fifth round in Washington, this week.
Trade PS Alfred K’Ombudo is leading the Kenyan negotiating team in the talks which are now said to be at the “tail end”,
President William Ruto and US President Joe Biden who are expected to meet in Washington next week Thursday, are expected to push their teams to conclude the talks and have a deal in place before America’s November elections.
Speaking in Nairobi yesterday ahead of Ruto’s US state visit, Investments, Trade and Industry Cabinet Secretary Rebecca Miano confirmed four chapters have so far been closed, but did not give any further details of the agreed terms so far.
“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," an official told the Star.
During last month’s American Chamber of Commerce in Kenya (AmCham) 2024 Business Summit in Nairobi, President Ruto indicated that a Strategic Trade and Investment Partnership (STIP) between the two countries should be ready for implementation in the second half of this year.
While Kenya enjoys duty free access to the US market under Agoa, which gives up to 6,400 product lines access to the US market, it is keen on the Strategic Trade and Investment Partnership whose talks kicked off in July 14, 2022, to increase investment, promote sustainable and inclusive economic growth, benefit workers, consumers, and businesses and support African regional economic integration.
It had targeted to have a deal by December last year.
The change in administrations in both countries has had a significant impact on the process which was mooted in 2020, with was also stalled by the Covid-19 pandemic.
Negotiations began back in July 2020 during former Presidents Donald Trump and Uhuru Kenyatta's tenures.
After the US elections in November 2020, 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 as the two administrations agreed on seek a Strategic Trade and Investment Partnership.
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.
More than half of Kenyan exports to the US are comprised of textile and apparel, macadamia, coffee, titanium ores and concentrates, and black tea.
The agricultural sector, manufacturing, textile, and mining will be among the biggest winners if a deal is struck, with Kenya also keen to rope in SMEs and build up Special Economic Zones and Export Processing Zones for increased exports, as it cuts its import bill.
Accompanied by captains of industries and other strategic state agencies, Ruto’s visit is also expected to culminate with a number of other investment deals, as Kenya pushes to attract US companies to Kenya in a Foreign Direct Investment’s drive.
Among sectors Kenya is keen to attract US investments include agriculture, health, ICT, textile, green energy, manufacturing and tourism.
Meanwhile, Kenya is also keen to expand product offering and tap a bigger market under the Agoa deal, which is expected to be extended to 2041.
While Kenya is the second biggest exporter to the US under Agoa, it is yet to maximise on the pact with only the textile and apparel sector enjoying the biggest gains.