U.S., Kenya launch non-tariff trade and investment partnership talks

By David Lawder and Chris Gallagher

WASHINGTON (Reuters) -The United States and Kenya on Thursday launched a strategic trade and investment partnership to pursue commitments to boost economic growth, support African regional economic integration and deepen trade cooperation.

The U.S. and Kenyan governments will start work within three months to develop a road map for engagement in areas including agriculture safety and digital trade standards, climate change, regulatory practices, and customs procedures the U.S. Trade Representative’s office said in a statement.

Kenya has long sought a full free trade agreement with the United States, and negotiations for such a deal to lower bilateral tariffs were launched by the Trump administration with the east African country in 2020. But the Biden administration, which has shunned traditional trade deals, did not resume those talks.

Kenya enjoys substantial duty-free access to the U.S. market through the Africa Growth and Opportunity Act (AGOA), a trade preference program for sub-Saharan African countries, but it expires in September 2025.

Kenya exported $685.1 million worth of goods to the United States in 2021, of which more than 75% entered duty free under AGOA, according to the Congressional Research Service — chiefly apparel, macadamia nuts, coffee, tea and titanium ores. The U.S. exported $561.6 million in goods to Kenya in 2021, with aircraft, plastics, machinery and wheat among the biggest categories.

The partnership announced by the two countries on Thursday made no mention of reducing tariffs or enhancing market access, in line with other recently launched U.S. trade dialogues with Britain, the European Union and Indo-Pacific nations.

The Kenya dialogue will include efforts to develop micro-, small- and medium-sized enterprises and discussions on enforcement of labor laws and promoting workers’ rights – central components of the Biden administration’s other trade initiatives.

U.S. Trade Representative Katherine Tai, who launched the partnership with Kenyan Cabinet Secretary Betty Maina during a virtual meeting on Thursday, said in a statement that she wants the partnership to “grow our trade and investment relationship in a way that promotes resilience and facilitates sustainable and inclusive economic growth.”

“We also hope that this initiative can serve as a model for trade policy engagement in Africa, one of the most dynamic and fastest-growing regions in the world,” Tai added.

U.S. Representative Richard Neal, who chairs the trade and tax-focused House of Representatives Ways and Means Committee, held out hope that the U.S.-Kenya talks could develop into a full trade deal. “This initiative will lay the groundwork for a comprehensive free trade agreement that includes market access, builds off AGOA, and complements both regional and continental integration,” he said in a statement.

Neal said the United States should “embrace” Kenya’s willingness to deepen its economic ties with the United States.

(Reporting by David Lawder and Chris Gallagher; editing by Kanishka Singh, Marguerita Choy and Leslie Adler)