<html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8"></head><body style="word-wrap: break-word; -webkit-nbsp-mode: space; line-break: after-white-space;" class=""><div style="margin: 0in; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><b class=""><span style="font-size: 12pt; font-family: Georgia, serif;" class="">Sources: U.S., Kenya to hold text-based negotiating round next month<o:p class=""></o:p></span></b></div><div style="margin: 0in; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: Georgia, serif;" class="">By Isabelle Icso, Inside US Trade</span><span style="font-family: Georgia, serif; font-size: 12pt;" class=""> </span></div><div style="margin: 0in; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 12pt; font-family: Georgia, serif;" class="">09/21/2020<o:p class=""></o:p></span></div><p style="margin-right: 0in; margin-bottom: 0in; margin-left: 0in;" class=""><span style="font-size: 12pt; font-family: Georgia, serif;" class="">Trade negotiators from Washington and Nairobi will exchange text during their next round of discussions in October, sources tell<span class="apple-converted-space"> </span><em class=""><span style="border: 1pt none windowtext; padding: 0in;" class="">Inside U.S. Trade</span></em>.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 0in; margin-left: 0in;" class=""><span style="font-size: 12pt; font-family: Georgia, serif;" class="">The countries initiated the negotiations in July. That round, which lasted roughly two weeks, was focused primarily on determining the scope of a potential deal. The upcoming round will include substantial exchanges of text from both sides, those sources said.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 0in; margin-left: 0in;" class=""><span style="font-size: 12pt; font-family: Georgia, serif;" class="">The Office of the U.S. Trade Representative confirmed the second negotiating round would take place in October but said an exact date had not yet been set.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 0in; margin-left: 0in;" class=""><span style="font-size: 12pt; font-family: Georgia, serif;" class="">The Kenyan Embassy in Washington, DC, said it held a “Diaspora stakeholder consultation” last week “with a view to raising awareness of the negotiations in the Kenya Diaspora Community and availing them the opportunity to provide input to the forthcoming text-based second round of negotiations,” according to<span class="apple-converted-space"> </span><a href="https://kenyaembassydc.org/kenya-usa-fta-diaspora-stakeholder-consultations/" style="color: rgb(5, 99, 193);" class=""><span style="color: rgb(0, 102, 204); border: 1pt none windowtext; padding: 0in;" class="">a Sept. 15 statement</span></a>.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 0in; margin-left: 0in;" class=""><span style="font-size: 12pt; font-family: Georgia, serif;" class="">A spokesperson for the Senate Finance Committee’s majority office said USTR officials recently briefed the committee on the status of the talks with Kenya. A Senate aide said USTR briefed the panel’s staff on the first round of talks last week, adding that the agency was aiming for the next round to be held in mid- to late-October.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 0in; margin-left: 0in;" class=""><span style="font-size: 12pt; font-family: Georgia, serif;" class="">Kenya, in its June 22<span class="apple-converted-space"> </span><a href="https://insidetrade.com/node/169209" style="color: rgb(5, 99, 193);" class=""><span style="color: rgb(0, 102, 204); border: 1pt none windowtext; padding: 0in;" class="">negotiating objectives</span></a>, outlined several of the same goals advanced by the USTR in its objectives, which were released in May. Kenya’s objectives do not, however, address good regulatory practices, subsidies, competition, procedures for medical devices and small and medium-sized enterprises, all of which were dealt with in the U.S. document.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 0in; margin-left: 0in;" class=""><span style="font-size: 12pt; font-family: Georgia, serif;" class="">One source expressed skepticism about progress made to date, noting that a second round of talks was delayed and suggesting the landscape in the U.S. ahead of the Nov. 3 elections might be a complicating factor. After the first round, the negotiations were paused due to concerns that the Kenyan negotiating team had been exposed to the coronavirus. A second round was originally scheduled for Aug. 4-14.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 0in; margin-left: 0in;" class=""><span style="font-size: 12pt; font-family: Georgia, serif;" class="">“This process did get delayed a little bit,” the source said. “I have to imagine that the tabling of text really does formalize what kind of cards they are putting on the table given that the elections are a short month and change away.”<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 0in; margin-left: 0in;" class=""><span style="font-size: 12pt; font-family: Georgia, serif;" class="">If President Trump wins, another negotiating round could be held in December, the source said.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 0in; margin-left: 0in;" class=""><span style="font-size: 12pt; font-family: Georgia, serif;" class="">However, whether Democratic presidential nominee Joe Biden would “carry on with a Kenya FTA” should he win remains unclear, the source said, saying the Biden campaign team has not given any indication of its intent. That, the source said, might slow the negotiations with Kenya.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 0in; margin-left: 0in;" class=""><span style="font-size: 12pt; font-family: Georgia, serif;" class="">“I have to imagine that the Kenyans are not hyper-motivated to launch into a lengthy negotiation process in October given that the” election is around the corner, the source continued.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 0in; margin-left: 0in;" class=""><span style="font-size: 12pt; font-family: Georgia, serif;" class="">The former vice president has said he will not “enter into any new trade agreements until we’ve made major investments here at home, in our workers and our communities -- equipping them to compete and win in the global economy,” according to<span class="apple-converted-space"> </span><a href="https://insidetrade.com/sites/insidetrade.com/files/documents/2020/jul/wto2020_0340.pdf" style="color: rgb(5, 99, 193);" class=""><span style="color: rgb(0, 102, 204); border: 1pt none windowtext; padding: 0in;" class="">responses he gave to a candidate questionnaire</span></a><span class="apple-converted-space"> </span>from United Steelworkers. “That includes investing in education, infrastructure, and manufacturing here at home.”<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 0in; margin-left: 0in;" class=""><span style="font-size: 12pt; font-family: Georgia, serif;" class="">Biden also has said he plans to include climate change protections in his trade deals.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 0in; margin-left: 0in;" class=""><span style="font-size: 12pt; font-family: Georgia, serif;" class="">USTR’s negotiating objectives for a deal with Kenya includes a section dedicated to the environment but the document does not include language on climate change. It largely mirrors objectives USTR used for the U.S.-Mexico-Canada Agreement. However, the USMCA objectives pledged to “Bring the environment provisions into the core of the Agreement rather than in a side agreement.” The U.S.’ objectives for a Kenya deal do not include such language.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 0in; margin-left: 0in;" class=""><span style="font-size: 12pt; font-family: Georgia, serif;" class="">Biden’s running mate, Sen. Kamala Harris (D-CA), voted against USMCA in large part due to what she called “insufficient” environmental provisions.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 0in; margin-left: 0in;" class=""><span style="font-size: 12pt; font-family: Georgia, serif;" class="">The source also cited the expiration of Trade Promotion Authority -- set to end next summer -- as another complicating “layer.” Under TPA, if it is not renewed, the countries must complete a trade deal with Kenya by April 1, 2021, because the president must notify Congress 90 days before signing an agreement. TPA expires at the end of June. Without TPA, amendments could be made to an implementing bill, potentially leading to the unraveling of an agreement.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 0in; margin-left: 0in;" class=""><span style="font-size: 12pt; font-family: Georgia, serif;" class="">Another issue is Kenya’s membership in the East African Community and the African Continental Free Trade Area, which sources have said will likely impact talks with the U.S. Kenya, in its negotiating objectives, said it planned to pursue a deal with the U.S. that would allow other members of the EAC to join the talks. The EAC Customs Union includes Burundi, Rwanda, South Sudan, Tanzania and Uganda.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-bottom: 0in; margin-left: 0in;" class=""><span style="font-size: 12pt; font-family: Georgia, serif;" class="">Additionally, while the AfCFTA does not prohibit member countries from negotiating with third parties, it requires that any concessions agreed to in such talks be extended to other AfCFTA member countries on a reciprocal basis. The African Union<span class="apple-converted-space"> </span><a href="https://au.int/en/pressreleases/20200827/outcome-statement-4th-high-level-policy-dialogue" style="color: rgb(5, 99, 193);" class=""><span style="color: rgb(0, 102, 204); border: 1pt none windowtext; padding: 0in;" class="">announced late last month</span></a><span class="apple-converted-space"> </span>that that the implementation of the AfCFTA had been delayed until the first half of 2021 due to the coronavirus pandemic. Kenyan president Uhuru Kenyatta in June said trade talks with the U.S. had been<span class="apple-converted-space"> </span><a href="https://insidetrade.com/node/169040" style="color: rgb(5, 99, 193);" class=""><span style="color: rgb(0, 102, 204); border: 1pt none windowtext; padding: 0in;" class="">delayed by a few weeks</span></a><span class="apple-converted-space"> </span>to align with AfCFTA’s implementation.</span></p><div class=""><br class="webkit-block-placeholder"></div><div class="">
Arthur Stamoulis<br class="">Citizens Trade Campaign<br class="">(202) 494-8826<br class=""><br class=""><br class=""><br class="">
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