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HomeBusinessEconomyWhat Kenya stands to gain in the Kenya-US Free Trade Area {Video}

What Kenya stands to gain in the Kenya-US Free Trade Area {Video}

What Kenya stands to gain in the Kenya-US Free Trade Area

Kenya and the United States of America (USA) launched negotiations for a landmark Free Trade Area (FTA) agreement on July 8, 2020.

The proposed trade treaty, the first of its kind in Sub-Saharan Africa, expects to provide continued market access for Kenyan goods to the US market, once the current African Growth Opportunities Act (AGOA) expires on September 30, 2025. Metropol TV had a one-on-one conversation with Felix Okatch, a Multilateral Trade Expert to demystify on what exactly these talks entail, and how Kenya stands to benefit from the talks.

What is a Free Trade Area agreement?

Free trade area means two countries agree between themselves that goods and services can flow in freely. That means goods from Kenya will now get to the US market without paying much duty.

For Kenya, we should take advantage of this opportunity and make sure that we produce more and we continue making sure that the aspects of technology will benefit much out of this arrangement.

Why is it necessary for Kenya to negotiate a free trade agreement with the US?

The US has not had good relations with World Trade Organisation (WTO) so they now started negotiating with countries and develop free trade areas, that’s why they made sure they came here so that China will not come ahead of them.

Has Kenya really made use of AGOA? And if so, what has it gained?

From the African Growth and Opportunity Act (AGOA) we have not made so much use because there is not much that we are selling food under the aspect of AGOA. But it shows that we have not done much and we should now do more than just the goods.

How is the FTA better than AGOA? and what are the advantages of FTA, what will Kenya gain?

AGOA was an African growth opportunity  Act and was a pleasure of the president of that particular country, so it was allowing other countries to bring in their goods and much of Africa AGOA was only trading crude oil. But this FTA is a trade agreement which is signed and many aspects are on it, goods, services, intellectual property and trade that is compatible with WTO requirements. We should open our eyes and take advantage of it so Kenyans should become more aggressive.

What sectors, in particular, do you see gaining more from the FTA with the US.?

I think the Small size-Medium Enterprise (SME) starts, we can make sure that we deliver much to the US  and then develop technical cooperation where we shall get financial support  and we move that up the ladder.

Are there any risks of entering to the FTA with the US?

It’s a risk arrangement because we have the East African community trade, and we have Common Market for Eastern and Southern Africa (COMESA). All these are there but now that we get to trade with a bigger partner with a careful note benefit. So it’s up to us to take advantage because the US already have seen what the benefit they will get from us and they will have this bilateral trade with other countries.

Disadvantages/advantages of getting into FTA?

The advantage is that we will get access to the market in terms of goods and services and also in terms of financial investments, through trading services. The disadvantage is that the US will take more advantage over us because its free trade area then the capacity is more than and will flood our market with other things.

Won’t having negotiations between Kenya and the USA as opposed to having negotiations with the EAC and the US create a conflict of interest with Kenya’s neighbours?

Most trade agreements are in line with WTO requirements, so we got those agreements with the East African Communities (EAC), COMESA but now when we bring in the US, of course, its disadvantageous because it means that what we are giving to the US, they also expect to get them from other trading partners.

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