Tread carefully on trade negotiations
Tuesday, February 11th, 2020
Kenya’s recent bullish search for trade partnerships has seen President Uhuru Kenyatta set camp in top world cities.
The President is seeking to strike deals with more established economies such as China, United States and Britain at a time the centre is shifting for most of these nations.
For Britain, Brexit has taken off and the country is set to have new trade agreements with Europe and other countries in earnest in ten months, as new protocols take effect.
The United States is also reeling under the effect of trade wars with China even as the two States flex muscles about just who the economic super power is. As for China, the Corona virus pandemic is taking a serious toll on the economy.
In essence, all countries are looking for ways to boost trade and presence with the new and old partners, amid troubled markets.
The meeting in Britain saw a lot of goodies dangled Kenya’s way, and it is only fair to wait and see how this pans out.
And as questions abound about trade relationships with the US even as Agoa expires in 2025, Uhuru’s visit should give the business community a semblance of hope and continuity going forward.
Anything short of that will see the economy take a major hit given that trade between Kenya and the US stands at about $1billion (Sh100 billion) a year, with over 70 per cent of Kenya’s export into the expansive American market in 2018, worth $466 million (Sh47 billion), entering under Agoa.
Kenya must, however, tread carefully to ensure any new bilateral trade deal between her and the US will not undermine the African Continental Free Trade Agreement (AfCFTA).
Any proposed trade arrangements with these nations, including the United States, should not undermine Kenya’s commitment to other trade agreements, which has been the worry of some African nations.
However, that is not even the greatest concern. Kenya must ensure it does not end up with the short end of the stick in the trade bargains but move in as equal partners.
Most agreements with African countries left nations with deals that do little to deliver them from poverty but end up making Europe, Asia and America richer.