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Freeze: US-Kenya Trade Deal in Peril as Biden Administration Shifts Focus Inwards

GBR Team 22/01/2021

Kenya’s proposed free trade talks with the US face a feeeze and a deal seems unlikely to be done within the first term of US President Joe Biden, statements by US officials indicate.

Incoming US Treasury Secretary Janet Yellen told lawmakers last night that the new Biden administration will focus on domestic policies before inking any new trade deals.

Global trade experts also predict that a similar fate awaits the UK which has also been negotiating a free trade deal with the US.

“President Biden has been clear that he will not sign any new free trade agreements before the U.S. makes major investments in American workers and our infrastructure. Our economic recovery at home must be our top priority,” Yellen said when asked about a possible trade deal with Taiwan.

Kenya has been pursuing negotiations for a free trade pact with the US as the expiry of its preferential access to the American market under AGOA (Africa Growth and Opportunity Act) approaches in 2025.

Almost 90 percent of the country’s Sh114billion exports to the US are done under the auspices of AGOA.

The Ministry of Industrialization and Trade has been leading the negotiations with the US trade representative’s team.

Principal Secretary Ambassador Johnson Weru who has been leading the negotiating team did not respond to GBR’s queries on Kenya’s likely next steps.

Earlier this week however, Trade Cabinet Secretary Betty Maina had indicated that Kenya was preparing for a third round of talks with the US team once the new administration settled in.

But comments coming from the UK about its own trade deal status with the US would indicate that Kenya will likely shelve negotiations for now.

“Biden has said in the last few weeks that doing trade deals is not a priority for him for at least the first part of his presidency and my guess is that certainly covers the next 12 months, it may cover the next 24 months,” Lord Kim Darroch, a former UK ambassador to the US told BBC 4 in London.

Lord Darroch said the UK would be lucky to strike a deal with the US during Biden’s first term. Indeed, he added, once President Biden comes around to trade deals, he will likely start with the much bigger EU-US trade deal, and the Trans-Pacific Partnership.  The TPP is a proposed pact between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the US.

Peter Holmes, of the U.K. Trade Policy Observatory at the University of Sussex, also predicted that a US-UK trade deal will be pushed to the back burner of Biden’s political priorities.

“Trade agreements will be at the bottom of the new president’s priorities, he added, and a separate trade deal with the U.K. will be relatively unimportant,” Holmes was quoted as saying.

Kenya Private Sector Alliance chief executive Carole Karuga said she was unaware of any new developments. KEPSA members have played a part in giving input to Kenya’s negotiating team on various proposals.

“Maybe we wait for a few weeks to and get an official statement,” Ms Karuga told GBR.

Dr. Oscar Otele of the University of Nairobi Political Science department expressed a more optimistic view however.

“It may be short to medium-term,” Dr. Otele said of any likely freeze in talks between Kenya and the US. “The question we need to ask is how long will that go on. In my opinion, may be one year.”

Dr. Otele said global competition from trade partners such as China might not allow the US to shelve trade talks for too long.

 

This is a developing story. Check back for updates.