President William Ruto and his United States counterpart Joe Biden are expected to discuss trade and investment extensively during his week-long State visit to the country.
In a detailed itinerary of Ruto’s visit shared by State House Spokesperson Hussein Mohamed on Sunday, it was revealed that President Ruto and Biden will hold bilateral talks on Thursday which will largely revolve around trade and potential avenues of opportunities for the two countries.
However, a report published by the US Congressional Research Service has expressed concerns over several factors that could affect the extent of how fruitful the talks could end up becoming.
Current Trade Agreements
Currently, Kenya and the US trade relations are promoted through the African Growth and Opportunity Act (AGOA).
AGOA is a piece of legislation approved by the US. Congress in May 2000 that seeks to strengthen economic cooperation between Sub Saharan countries and the United States.
Data shared by the Office of the US Trade Representative shows that Kenya is the fourth largest beneficiary of the AGOA act having supplied goods worth USD614 million (Ksh80.5 billion) between 2001 when the Act was operationalised and 2022.
During former American President Donald Trump's time in office, Kenya and the US attempted to strike a Free-Trade Agreement but the talks failed to materialise.
The Biden administration has worked hard to succeed where Trump's government failed by spearheading the Kenya Strategic Trade and Investment Partnership (STIP) in July 2022.
Following the initiation of the STIP talks, the countries have held at least 3 rounds of talks which are expected to continue during President Ruto's visit to the White House.
Potential Concerns
As expressed in the report by the US Congressional Research Service, the US government may seek to negotiate commitments close to those in comprehensive FTAs with relatively more developed countries, which could disadvantage Kenya given its lower middle-income status.
This could also present challenges for the Kenyan government, which faces domestic pressure to maintain protections for import-sensitive and native companies.
Further, there are key economic sectors including agriculture which Kenya protects ferociously through different policies. The US has on numerous occasions listed this as a potential trade barrier
Relatively high tariffs on dairy (53.1%), animal products (30%), and cereals (28.1%) have in the past been cited as an example.
The US has also listed Kenya’s custom procedures as inefficient possibly hampering trade.
Another concern that the Biden administration is likely to raise is the fact that the US government has in the past referred to as opaque, rules under Kenya's 2019 Data Protection Act which create uncertainties for cross-border data flows.
