President Uhuru Kenyatta will meet his US counterpart Donald Trump in Washington on Thursday for a free-trade bilateral agreement, as Kenya positions itself post-AGOA deal.
The Cabinet on Thursday, January 30, gave a green light for Kenya to proceed with the talks, which are also likely to jostle the EAC region.
It will be the first of such a deal by the US with a sub-Saharan country.
If Kenya and the US reach a deal, which is certain, it will see Kenyan goods have smooth access to the expansive American market as the African Growth Opportunity Act comes to an end, a statement from State House said.
AGOA, which provides 39 sub-Saharan African countries duty-free access to the US for about 6,500 products, ranging from textiles to manufactured items, will expire in 2025.
The move is, however, set to draw a sharp reaction from other EAC states because Kenya surrendered its customs space to the bloc in 2005 when it signed its customs union protocol. The rulebook compels member states to negotiate all trade pacts jointly.
However, this appears to be a reaction to the unwillingness of other EAC states to sign the Economic Partnership Agreement with the EU.
Kenya signed and ratified the EPA, which guarantees duty-free and quota-free access of EAC products to the EU market in October 2016, after nine years of negotiation.
Other than Rwanda, the other member states are yet to sign it.
Foreign Affairs PS Macharia Kamau said the government expects real progress on the US agreement by the third quarter of this year.
“We are trying to figure out which is going to be the path forward for our arrangement with the US post-AGOA,” he said.
Trump has said he wants to conclude bilateral deals with African countries to replace the 20-year-old AGOA deal, overriding the wish of most African states for a new multilateral deal.
Many African governments have expressed a preference for a multilateral deal, particularly as they move towards a 54-nation African Continental Free Trade Agreement, which comes into force in July.
Ambassador Kamau, however, said Kenya will move cautiously in terms of reciprocity, since it needed to protect infant industries and services, including its airline.
“They could easily swamp our markets into oblivion,” he said. Any deal “cannot be at the expense of our local capabilities, which are nascent at best”.