This report is an in-depth study regarding a potential free trade agreement (FTA) between the U.S. and Kenya, whose negotiations were launched on July 8, 2020. The report draws on insights from dozens of interviews with business executives and experts, to explore perspectives regarding FTA obligations on products and services traded between the two countries.
In February 2020, President Uhuru Kenyatta announced Kenya’s intention to enter into a trade deal with the United States. By March, communities around the world were beginning to grapple with the social, economic, and political disruption caused by the novel coronavirus pandemic, including staggering loss of human life, a precipitous global economic downturn, nearly half of the world’s global workforce at risk of losing their livelihoods, and many millions pushed into extreme poverty. On January 20, 2021, Joseph R. Biden was sworn in as the 46th President of the United States, and at the time of this publication, his administration was assessing its approach to an inclusive trade policy agenda.
It is against this backdrop that we have prepared this in-depth study regarding a potential free trade agreement (FTA) between the U.S. and Kenya. Our goal is to examine the priority trade issues likely to be a focus for each side as well as the issues that will present a challenge for the negotiators. The report draws from insights gathered from dozens of interviews with business executives and experts to explore stakeholder interest and perspectives regarding FTA obligations on apparel and agricultural products as well as financial and digital services traded between the United States and Kenya. The report also analyzes potential obligations relating to regulatory transparency, investment, intellectual property, and other cross-cutting provisions. Finally, this study considers the U.S.-Kenya FTA as a model for the future of U.S.-Africa trade in the context of the implementation of the African Continental Free Trade Area agreement and the expiration of the African Growth and Opportunity Act (AGOA) in 2025.
A resounding message we heard from the Kenyan and American business executives whom we interviewed is that they would like to see accelerated progress to advance a high standard, comprehensive U.S.-Kenya FTA. This type of an FTA is an optimal starting point for maturing the U.S.-Kenya trade relationship. An FTA will also lead to the reduction in tariff and non-tariff barriers, while also serving to enhance predictability and alleviate market uncertainty.
Kenya is a long-standing, strategic U.S. partner in Africa. American investment in Kenya and bilateral trade are important elements of the U.S.-Kenya relationship. As one of Africa’s most diversified and fastest-growing economies, Kenya boasts a young, entrepreneurial population, is a pioneer of mobile financial services and inclusion, is home to a vibrant tech hub, and is the region’s transportation and logistics hub. As evidenced by Kenya’s ranking as third-most improved country globally in the World Bank’s Ease of Doing Business Survey, Kenya is well poised for further growth. Our findings suggest that there is substantial potential to expand the benefits of trade between the two countries.
We have sought to shed light on the objectives of the parties to the negotiations, to provide insights on various key trade issues and chapters in the negotiations, and to consider the role and importance of an FTA in the broader scope of U.S.-Africa trade relations. We hope this report contributes to advancing the vital dialogue among all stakeholders about the future of trade between the United States and Africa.
