US now opens door for Kenya to reclaim vital Agoa trade benefits

Workers at the Hela Intimates Export Processing Zone Ltd factory in Athi River, Machakos County. [FILE] Kenyan exporters to the United States are a step closer to reclaiming crucial duty-free access after the US House of Representatives passed a law paving the way for a three-year extension of the African Growth and Opportunity Act (Agoa), which expired last September. The House voted 340-54 on Monday to renew the pact through 2028, retroactively covering its lapse since September 2025. The renewal path now requires the US Senate to pass the bill and US President Donald Trump to sign it into law. For Kenyan exporters who faced new tariffs of up to 10 per cent since the US duty-free window expired, the bill promises a refund on duties paid, provided it clears the Senate and is signed by President Trump. The bill passed under an expedited process requiring a two-thirds majority, indicating strong bipartisan support. Attention now shifts to the US Senate, where Kenyan exporters will be hoping for similar backing. For Kenya, Agoa has been an engine of growth, transforming its textile and apparel sector into an export powerhouse. The 25-year-old pact, signed into law by former US President Bill Clinton in 2000, allows Sub-Saharan African nations, including Kenya, to export thousands of products to the United States duty-free. The value of this trade is substantial. Kenya's apparel exports to the US under Agoa were worth $737.3 million (Sh95.3 billion) in 2024, according to US trade data. The volume surged from 97.3 million pieces in 2023 to 116.0 million pieces in 2024, official local statistics show. The sector is a major employer. Trade Cabinet Secretary Lee Kinyanjui has stated previously that it supports over 66,800 direct jobs, predominantly for women and youth. Its expiry and the concurrent new US tariffs had sparked fears of widespread factory closures and job losses. "We have been bleeding cash for months. This vote is the first real signal that relief might come," said a director at a major apparel maker, who requested anonymity. The company's products faced the full 10 per cent tariff without AGOA, jeopardising contracts with US retailers. The US Chamber of Commerce, a key lobbyist, called the extension essential for maintaining US-Africa commerce and preventing uncertainty. "For a quarter century, AGOA has been the cornerstone of US-Africa commerce," stated John Murphy, the Chamber's senior vice president for international trade and investment policy, in a letter to US lawmakers seen by The Standard. A critical clause for Kenyan exporters is Section 2(b) of the passed bill, which allows for "reliquidation." This means local exporters and companies can apply for refunds on tariffs paid since September within 180 days of the law's enactment. "This retroactive clause is the lifeline," said an executive at an apparel export firm. "It doesn't erase the disruption, but it would repair the balance sheet damage. We have been advising our US clients to keep meticulous customs records." If enacted, the three-year extension would provide medium-term stability, though analysts note it is a shorter window than the previous decade-long authorisation. "The three-year timeline aligns with the Trump political calendar but creates another cliff-edge in 2028," noted a trade policy analyst. For now, Kenyan exporters are cautiously optimistic but aware that the process is incomplete. "We are telling our US buyers that we hope to be back to normal duty-free terms soon," said the apparel director. "But until the President signs it, we're still holding our breath." Plans by Kenya and China to ink a landmark trade agreement designed to provide a critical lifeline to local exporters may have expedited America's push to renew AGOA. The "Early Harvest" deal, which was awaiting a "triple-nod" from the Cabinet, the Presidency, and Parliament-has, however, ground to a halt in what analysts see as direct consequence of intensifying pressure from the US, which has framed the renewal of AGOA as a tool for economic warfare. Unlike previous iterations of the AGOA trade programme, which were primarily viewed as development tools, the current push for renewal in Washington is now seen to also be about defence.

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