TRALAC - Trade Law Centre

Kenya ‘raring to go’ on free trade deal with US, Uhuru says

Tuesday, 30 June 2020

Source: Daily Nation (Kenya)

Kenya’s negotiations with the US on an unprecedented two-way trade deal are on schedule to begin on July 7 despite difficulties posed by the coronavirus pandemic, President Uhuru Kenyatta said on Friday.

“Our team is raring to go,” he assured an online forum sponsored by the Washington-based Corporate Council on Africa.

Kenya is aiming to create “sustainable jobs for our people” through what would be the first bilateral free-trade agreement between a sub-Saharan country and the nation with the world’s biggest economy, the President added.

The US also has much to gain from concluding such an arrangement, Mr Kenyatta suggested. Kenya is part of a continent that “requires everything from toothbrushes to machine tooling,” he said.

Mr Kenyatta also sought to allay concerns that a bilateral deal with the US could undermine the African Continental Free Trade Area that is due to be implemented at the start of 2021. The Africa-wide initiative is “very important to us,” the President said, noting that Kenya has worked hard to ensure its success.

He suggested that a Kenya-US bilateral pact can complement the continental trade agreement and could serve as a model to be replicated by other individual countries. “If we are successful in these negotiations, Kenya can act as a lead or guide,” the President said. “We will be the guinea pig so that many other African countries can follow suit.”

But Ghana President Nana Akufo-Addo, who also spoke at Friday's forum, said the US has paid more attention to the possibility of a bilateral deal with Kenya than to the multilateral Africa trade agreement that will soon come into force. While hailing the significance of a US-Kenya trade deal, Mr Akufo-Addo lamented that “the emphasis of America on exploring opportunities on the continent has not been quite as intense as some of us would have wished.”

Florizelle Liser, chief executive of the Corporate Council on Africa, said in an interview following the forum that the US has in fact worked to facilitate the Africa-wide trade agreement. A bilateral deal with Kenya is not an impediment to Africa’s efforts to forge a multilateral free-trade grouping, she added. The US side “understands that Kenya is part of the EAC,” Ms Liser said.

“They’re already looking at ways they can pull in other East African countries.” It could take as long as two years to conclude a Kenya-US trade deal, she added.

President Kenyatta noted in his remarks to the forum that Kenya was especially keen to start bilateral negotiations with the US because the existing multilateral preferential trade package known as Agoa is due to expire in 2025. But President Akufo-Addo is not prepared to acquiesce to that projected termination date for Agoa. African countries that have benefited from Agoa should “look at the possibility of extending it,” he said.

Ms Liser, whose 27-year-old association includes most US companies operating in Africa, pointed out that it is up to the US Congress to decide whether Agoa’s scheduled expiration in five years will actually come to pass. The still-spreading pandemic is intensifying Africa’s need for increased trade and investment, the Kenyan and Ghanaian heads of state agreed.

Kenya managed to save many lives through swift implementation of virus containment measures, Mr Kenyatta noted. But, he acknowledged, those moves led to a sharp economic contraction and widespread loss of livelihoods.

President Akufo-Addo pointed out that Ghana has recorded one of the lowest virus-related death rates in the world. His country has counted 15,473 cases of coronavirus, resulting in 95 deaths.

Kenya has reported only about one-third as many cases but has seen 135 lives lost to the pandemic. At the same time, Kenya Airways (KQ), grounded for the past three months by the coronavirus pandemic, will resume domestic flights in “the next couple of days,” President Kenyatta said.

The return to in-country service will coincide with the lifting of Kenya’s lockdown on travel between counties, Mr Kenyatta noted. The government will soon set a date for KQ to resume flying internationally, the President added.

“We’re doing everything we can to make sure we are back in the skies,” Mr Kenyatta said.

“We’re eager to open up, but we have to make sure we all stay safe.” The President’s announcement came on the same day that KQ chief executive Allan Kilavuka revealed that the airline has lost an estimated $100 million so far this year due to the pandemic and related lockdowns.

Losses could approach $500 million by the end of 2020, Mr Kilavuka added. KQ had been struggling financially long before the coronavirus emerged. It lost about $122 million in 2019, compared to $71 million the previous year.


 

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