Business leaders bet on FTA to boost Kenya-US relations

TRADE: The Free Trade Agreement (FTA) between Kenya and the US will introduce more predictable commercial relations, mitigating the uncertainty associated with the annual eligibility review process under the Africa Growth Opportunity Act (Agoa).

Business leaders reckon the Kenya-US FTA obligations should deepen transparency, anti-corruption, good regulatory practices, and government procurement, which are prerequisites to improve ease of doing business.

According to a report released yesterday, the Kenya-US FTA, as well as the Africa Continental Free Trade Area (AfCFTA) agreement will address challenges in Kenya’s international trade.

This will target the regulatory environment, trade facilitation, intellectual property and law enforcement, as well as supply chain policies.

“Progress in these areas will improve the overall business environment in Kenya, and will also align with Kenyan policies that seek to address illicit trade, a key challenge for companies doing business in the Kenyan market,” the report notes.

Over 70 per cent of Kenyan exports to the US are covered by Agoa which lapses in 2025.

Kenya had the second highest Agoa utilisation rate of the 40 programmea beneficiaries in 2018, and the highest utilisation rate for non-oil exports.

“Kenyan decision makers will want to maintain this access in trade negotiations with the United States.

At the same time, US negotiators will seek to ensure that any agreement contains adequate reciprocal market access,” says the report.