25 August 2018

Kenya: Trade and Investment On Agenda of Uhuru's Us Visit

Photo: Nation Media Group
President Uhuru Kenyatta, right, arrives at his hotel in Washington, DC, on August 26, 2018 ahead of a meeting with US President Donald Trump.

Kenya's President Uhuru Kenyatta is set to visit Washington DC for a meeting with US President Donald Trump at a time when America is exploring the possibility of signing bilateral free trade agreements with African countries.

"We are looking for African countries interested in having a bilateral free trade agreement with us and then we'll determine which ones make sense, in terms of capacity and readiness," Peter Haas, the US Deputy Assistant Secretary for trade policy and negotiations in the Bureau of Economic said during a conference call ahead of his trip to South Africa.

The US is exploring bilateral trade agreements as it thinks past the African Growth and Opportunity Act (Agoa) that allows qualifying African countries to export goods to America duty-free.

For Kenya, such an arrangement would be a big boost given that the country is the biggest beneficiary in the region under the Agoa arrangement.

Data from the US Department of Commerce showed $1.5 billion in total trade between the two countries in 2016, with US exports to the country reaching $937 million, while imports from Kenya rose to $565 million. Currently, Kenya enjoys preferential trade benefits under Agoa, with exports to the US of apparel, coffee and tea.

The visit to the US comes at a time of heightened diplomatic engagement for Kenya, with President Kenyatta set to host UK Prime Minister Theresa May in Nairobi on Thursday, before heading out to Beijing to meet President Xi Jinping in early September.

"In the space of just two weeks, we will have hosted the Big Three -- the US, Britain and China -- and this goes to show our standing in the community of nations," Foreign Affairs Cabinet Secretary Monica Juma said on Tuesday.

The president's outing to Washington also comes a time of renewed trade and defence co-operation between the two countries, as the Trump administration looks to the Kenyan leader as an ally against Islamist insurgents in the region.

"The two leaders will discuss bilateral ties and plans to boost security, trade and investment, among other sectors," said Kenya's State House spokesperson Kanze Dena.

The White House on the other hand said the two leaders will "explore" ways to bolster trade and investment between the two countries, while strengthening security co-operation.

Kenya will be keen on Washington's intention to open negotiations over a free trade area, something that would benefit Nairobi.

Kenya has also in recent times enjoyed defence and security co-operation with the US, having seen an increase in its military aid allocation. This year alone, there have been approvals for two military contracts by the US department of defence.

In June, a contract worth $30 million awarded to L-3 Communication for logistics support of the Air Force C-12 fleet was approved that will see Kenya and a host of other countries benefit.

Another contract worth $149 million to General Dynamics for foreign military sales was approved by the Trump administration that will see Nairobi, Saudi Arabia, Afghanistan, Jordan, Nigeria and Qatar benefit from the supply of rockets, warheads, motors and associated components.

Nairobi is also waiting on the delivery of its $418 million purchase of combat aircraft order, one of the country's single-biggest weapons deals, which was approved in November last year.

Ms Juma on Thursday last week held talks with Under Secretary for Defence David Tranchtenberg and defence and security matters are said to have been part of the agenda.

UK, China ties

British Prime Minister May's visit to Kenya this coming week will largely dwell on trade and security, with the post-Brexit relationship between the two countries' expected to be the focus of the trade talks.

Last month, Emma Wade-Smith, the UK Trade commissioner for Africa, told The EastAfrican that they will be seeking to ensure the continuity of the existing trade arrangements with regional countries so as to give clarity to businesses.

In China on September 3, President Kenyatta is expected to join 50 other heads of state, at the Beijing Summit of the Forum on China-Africa Co-operation.

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