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Kenya exports to US climb to Sh67 billion

BUSINESS NEWS
By Frankline Sunday | December 30th 2020

Kenya’s apparel are among major exports to the US under the Agoa trade deal. [File, Standard]

Kenyan exports to America under the Africa Growth Opportunities Act (Agoa) hit Sh67 billion last year, a marginal increase of 3.7 per cent from Sh64 billion recorded in the previous year.

According to the latest report from the Office of the US Trade Representative, Kenya emerged the fourth exporter under Agoa, after Nigeria (Sh310 billion), South Africa (Sh200 billion) and Angola (Sh60 billion) in Africa.

“Kenya is currently our 96th largest goods trading partner with Sh110 billion in total (two way) goods trade during 2019,” said the report in part.

“Goods exported totalled Sh40 billion, while those imported totalled Sh67 billion, representing a goods trade deficit of Sh27 billion in 2019.”

The primary goods Kenya exported to the US included apparel, macadamia nuts, titanium, coffee, tea and spices.

Imports from the US to Kenya were led by aircraft, plastics, machinery and wheat.

The new figures come on the back of ongoing efforts between the two countries to seal a bilateral free trade agreement that is expected to be a model for similar pacts with the region.

Earlier this year, trade representatives from Kenya and the US held a six-day virtual workshop to lay the groundwork for what is expected to be lengthy and complicated talks.

“Among topics discussed were pursuing exploratory talks on a future bilateral trade and investment framework, maximising the remaining years of Agoa, strengthening commercial cooperation, and developing short-term solutions to reduce barriers to trade and investment,” explains the US Trade Representative office in its report.

The US is also keen to have Kenya address non-tariff barriers across several classes of agricultural goods as well as concerns around the intellectual property rights of US digital firms.

“Kenya maintains complex, non-transparent, and costly requirements for the importation of all meat, dairy, and poultry products,” explains the US trade office in its report.

“Despite efforts to improve intellectual property enforcement, the presence of pirated and counterfeit products in Kenya continues to impede US business interests.”

According to Edward Sigei, executive director of the Kenya Copyright Board which is part of the agencies involved in crafting the trade pact, some of the proposals are achievable in the medium-term.

“We have been discussing the issue of intellectual property, which is a big concern for our partners in the US because of the piracy challenges we face locally,” Sigei explained.

“We are in constant discussion with these companies and finding out how enforcement can be done through legislation or technological intervention.”

However, some of the proposals have generated disquiet both locally and in the East African region.

Early this year, manufacturers and producers under regional lobby groups wrote an open letter urging Kenya to reconsider the trade pact.

“The agreement portends the danger of crippling sectors such as agriculture and manufacturing and disintegrating of the Kenyan economy,” reads part of the letter.

“The outcome is that the agreement will likely negatively impact food security, as the ability of local farmers to produce will be limited by stiff competition from subsidised products from the US market.”

A group of lawyers have also sued Kenya at the East African Court of Justice in Arusha, stating a trade pact between Kenya and the US undermines the economic interest of the wider East African Community.

 

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