The free trade deal between Kenya and the U.S brokered by President Uhuru Kenyatta and President Donald Trump is taking shape following the meeting of private sector organisations from the two countries to chart their roles in the upcoming negotiations.
The Kenya Private Sector Alliance (KEPSA) met with its U.S counterpart Corporate Council on Africa in Nairobi with the support of the two governments, where the following issues were agreed.
Carole Karuga, the CEO of KEPSA CEO said Kenya should draw lessons from Morocco on the challenges and opportunities that are emerging with the free trade agreement between Morocco and the U.S. in order to learn and eventually do better.
In this regard, it was agreed that KEPSA, Corporate Council on Africa and General Confederation of Enterprises in Morocco (CGEM) will work together to learn lessons from the Morocco experience to ensure the Kenya, U.S. deal succeeds.
All parties agreed the need to move fast the Kenya, U.S deal in order to secure the opportunity presented by this trade agreement. “Kenya has a great appetite for this opportunity,” said Amb. Amb Johnson Weru, the Permanent Secretary in the State Department of Trade.
Dr. Ruth Kagia, Deputy Chief of Staff, Policy and Strategy, Executive Office of the President of Kenya said the next 18 months must be well utilised to secure the Kenya, U.S deal.
She, however, said there is need to capacity building on negotiations skills on the Kenyan side to ensure the deal is mutually beneficial.
“Upon conclusion of negotiations and signing of the FTA, trade has to be two way and in large volumes for sustainability.
“Small industries need to be protected and challenges in logistics need to be resolved for the ease of doing business between the two countries to be realized,” she said.
Kenya, US deal and the Morocco example
If successful, the Kenya, U.S deal will be the first U.S free trade deal in Sub-Sahara Africa because U.S already signed a deal with Morocco which is north of the Sahara.
It will also mark key achievements for both Uhuru and Trump in deepening trade relations, for Uhuru because of diversification and a superpower catch and for Trump because Kenya is a country that is intensively courted by China.
Data shows that as a result of this deal, the volume of trade between Morocco and the U.S more than quadrupled during the period 2006-2018, reaching approximately US$5.44 billion in 2018, compared to $1.34 billion in 2006.
During the same period, exports from Morocco increased more than fivefold to $1.38 billion in 2018 from just $0.26 billion in 2006. Imports from the U.S more than quadrupled, reaching $4.06 billion in 2018 compared to only $1.08 billion in 2006.
However last year, Moroccan Exporters Association (ASMEX)called for a review of the trade deal saying their members have not benefited much.
“The free trade agreement between Morocco and the US has not been beneficial to Moroccan exporters, given the size of the U.S market and the complex procedures yet unfamiliar to Moroccan companies,” said ASMEX President Hassan Sentissi El Idrissi, in the statement released by the association.
He said the agreement should be reviewed to consider the reality of Moroccan small and medium-sized enterprises.
Negotiations for the Kenya, U.S deal are likely to be concluded by the end of 2021.
editor@financialday.co.ke