[CTC] Kenyan president: Trade negotiations with U.S. to begin July 7

[Arthur Stamoulis]

Kenyan president: Trade negotiations with U.S. to begin July 7
By Isabelle Icso, Inside US Trade 
06/30/2020
Trade negotiations between Washington and Nairobi are scheduled to begin next Tuesday, according to Kenyan President Uhuru Kenyatta.
During a June 26 webinar, Kenyatta reiterated that the talks were delayed by a few weeks <https://insidetrade.com/node/169040> to align with the implementation of the African Continental Free Trade Area. The U.S. and Kenya were cleared to begin talks earlier this month after the U.S. on May 22 released its negotiating objectives <https://insidetrade.com/node/168887> for a potential bilateral deal.
Earlier this month, Kenyatta said the reason the talks with Washington were pushed to next month was “because we wanted the [AfCFTA] to kick in and come into force.”
Last week, he said the negotiations with the U.S. were scheduled to start the “very same” week as the AfCFTA came into effect operationally.
“I believe we are still on schedule to start negotiations” on July 7, he said during the webinar <https://www.youtube.com/watch?v=W6BxJP0xw2A>, hosted by the Corporate Council on Africa.
While AfCFTA has been ratified by 29 of the African Union’s nations and entered into force in May 2019, many details were left to be worked out. The deal has been signed by 54 of the region’s 55 nations. The pact’s negotiations have been divided into two phases. The first phase, which included tariff schedules for goods, would have allowed for the parties to implement its provisions by July 1.
But AfCFTA Secretary General Wamkele Mene, who assumed the post in March, said that timeline was no longer tenable due to complications stemming from the pandemic.
“The first of July is not practical, it is not possible,” he said during the same webinar. “Out of 55 [African] countries, 42 are under a full or partial lockdown … these conditions it is not possible.”
Mene said the AfCFTA secretariat recommended that the member nations “postpone the implementation” from next week to Jan. 1, 2021.
“We hope the heads of state will accept that recommendation,” Mene continued, adding, it “gives us time to defeat the pandemic.”
U.S. Trade Representative Robert Lighthizer has long hoped a deal with Kenya would serve as a model for potential pacts with the rest of the region. The U.S. objective is to conclude a deal that “builds on the objectives” of the African Growth and Opportunity Act, according to a March 17 notification <https://insidetrade.com/node/168414> to Congress.
Kenyatta last week addressed AGOA, which is set to expire in September 2025, saying Kenya was “particularly keen to negotiate” a trade deal with the U.S.
Last week marked a deadline for the annual submission of comments on the eligibility of sub-Saharan African countries to receive benefits under AGOA.
The U.S. Chamber of Commerce, in a June 24 submission, suggested changes to the program and urged the administration to clarify what a U.S.-Kenya trade deal would mean for AGOA.
“To maximize the potential benefits of U.S.-Africa trade relations, consider moving beyond the current AGOA legislation, especially for the larger economies where U.S. companies are at a disadvantage to counterparts from Europe and Asia, to include bilateral and regional reciprocal trade agreements,” the Chamber said.
While it is supportive of a bilateral deal with Kenya, the Chamber said the “U.S. government posture on what a U.S.-Kenya trade agreement means for AGOA should be clarified. Moves towards reciprocal trade stand to benefit the United States and all eligible African countries, providing greater predictability and certainty for U.S. and African firms.”
The Chamber also said the U.S. should “exploit” the complementarity between a future AGOA framework and the AfCFTA -- one that includes U.S. trade advisers stationed in Africa.
“The U.S. should develop a comprehensive strategy aimed at increasing regional integration and trade facilitation reforms within Africa. In light of the newly adopted AfCFTA, a comprehensive trade strategy should include U.S. government technical advisors embedded within the African Union to ensure that all trade facilitation efforts among African countries are compliant under the [World Trade Organization]. Such a strategy would help develop economic growth among countries, ensure that U.S. standards are being adopted, and improve U.S.-Africa trade and investment relations,” the submission states.
In the event that lawmakers “move to extend and update AGOA,” African governments should be incentivized to reconsider policies that “impede trade and investment” with the U.S., the Chamber added.
“To enhance economic growth and development, AGOA should encourage efforts to promote trade facilitation, expand market access, protect intellectual property, counter illicit trade, extend fair treatment to foreign investors, and improve the business climate in African countries, the Chamber said.
Specifically, the U.S. should broaden AGOA’s eligibility criteria to address digital trade issues, its submission states, recommending “expanding AGOA’s eligibility criteria to address new issues such as digital trade, including policies that support cross-border data flows, data privacy and security, as well as sound Digital Services Taxes (DST). The U.S. Chamber notes with concern that countries such as Kenya are considering unilateral, discriminatory DSTs that may violate multilateral trade obligations and sow unnecessary doubt about attracting foreign direct investment in the digital economy,” the submission continues.
The Chamber also acknowledged the delay of AfCFTA implementation regarding trade in goods.
“Trading under the new agreement was anticipated to occur on July 1, 2020, but was postponed due to COVID-19. Phase II covers intellectual property, competition, and investment policy, while a third phase covers e-commerce. Implementation of the AfCFTA -- including phase I tariff cuts -- is expected to be substantially delayed due to the onset of COVID-19. However, as these measures take effect, it is critical for the U.S. to engage with the African Union’s stakeholders to ensure that the interests of the American business community are not undermined,” the Chamber said.

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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