3. Taking into account questions 1 and 2 above, in your view what could be the possible implications of the Kenya – US Free Trade Agreement on Africa’s regional economic integration, particularly in respect of agricultural markets and existing free t...

Based on the above, I think the FTA will definitely serve as a model for the African content. It is important to note that the US-Morocco agreement entered into force in 2006 and is considered a comprehensive agreement that has seen bilateral trade between the countries grow significantly thus Kenya would be the first country in Sub-Saharan Africa (SSA) and only the second on the African continent after Morocco.

The most useful potential outcome will be the extent to which Kenya draws manufacturing foreign direct investment from the US and other states, into its economic processing zones. To achieve this, Kenya should negotiate for liberal rules of origin requirements. Such rules should not unduly constrain investors to use only US or Kenyan inputs for Kenyan exports to qualify for the duty-free entry into the US. The FTA could also be made conducive to regional integration in Africa by allowing cumulation provisions in the agreement that would allow the use of materials sourced from other African partners to achieve the rules of origin requirements. This would promote the development of intra-Africa and U.S.-Africa value/supply chains.

FTAs concluded by African Countries with third Countries will have to be notified to the AU and will be closely scrutinized. In this respect, the Kenya-US FTA must demonstrate that it will positively contribute both to the Intra Africa trade and trade between the US and Africa. This must be reflected in key negotiating areas such as trade in goods through rules of origin which should allow cumulation with regional partners within Africa such as COMESA, EAC, SADC, ECOWAS, and the continent at large.

It is a good thing that Kenya managed to get an FTA agreement with the USA. I checked the internet to see how Kenya was faring in trade with the USA and these were the findings. Kenya is one of AGOA's top five exporters to the United States, primarily sending apparel, cocoa, tree nuts, coffee, and tea. It imports American aircraft, machinery, agricultural products, and plastics info by February 2020. According to the US International Foreign Trade Data, during 2019 Kenya exported goods worth USD 401.5 million and imported goods worth USD 667.1 million from USA. Between January and July 2020. it exported goods worth USD 222.2 million and imported goods worth USD 333.7 million from USA.

In the FTA agreement if the USA allows trading with Kenya and accepts products from the RECs where it falls, then all the EAC and COMESA countries might benefit. Considering the infrastructure that Kenya has put in place to facilitate trade that is; the improved port, better port services and the railway, they make it a good investment partner worth considering because it is reaching other African countries to source  raw materials. At the end of the day, the different countries will be interested to trade so as to participate in the trade with Kenya while learning the SPS requirements of the American market in case the market is opened to take in other African countries. It could be a good idea that the US starts by trading with Kenya and later with the RECs so as to build volumes of export, hence strengthening regional integration. 

As I scrutinized the negotiation objectives again, I realized that objective "j" and "m" quoted below were in tandem with my discussion written above. 

j. To make sure that the outcome of the negotiations will become the basis of future FTAs with other African       Countries, Kenya and the USA will endeavour to brief interested African Countries periodically.

m. To create a framework through which any EAC Partner State that did not participate in these negotiations       at the outset is allowed to join the negotiations, subject to terms and conditions that would be agreed             between the USA and Kenya.

It is necessary that Kenya identifies good negotiators who will look at the future of Kenya and the different RECs in Africa. Sometimes, the negotiators do not speak or understand the enormity of the work involved, hence fail to get a good position or deal for their countries. If done well, it will facilitate regional integration.

The  US bilateral agreement with Kenya, signifies a shift from multilateral trade deals.  On one hand, it is expected to add the benefits to Kenya and receives from the African Growth and Opportunity Act. Kenya is one of AGOA’s top five exporters to the United States, primarily sending apparel, cocoa, tree nuts, coffee, and tea. It imports American aircraft, machinery, agricultural products, and plastics. While the African Growth and Opportunity Act gives about 40 African states tariff-free access to the US for 6,500 products, the new free trade agreement could potentially let Kenya send more goods to the US market and also bring exclusivity for some products which the AGOA doesn’t provide. While the existing AGOA provides the African countries preferential treatment selling into the US, it does not offer any reciprocity. With the new free trade agreement, Kenya will definitely aim to change that.

Agriculture is also part of Kenya major agenda for the country’s economic development growth. Through the new trade agreement, Kenya will look to attract huge US investment in Kenya’s agricultural sector including Kenya-based agritech startups. Furthermore, US agricultural companies are poised to increase various investments in Kenyan agriculture. The free trade agreement would see the US bringing its agriculture technology to the country. He told the media. There’s a huge potential here for American companies to have a big impact and big inputs into the agricultural sector throughout the Kenyan market. 

On the other hand, the African Continental Free Trade Area (AfCFTA) agreement entered into force for 29 of those countries, which includes Kenya, in May 2019. On July 1, 2020, the AfCFTA it took full effect. The free trade agreement with the US is a violation of the agreement since it was agreed that no country should negotiate a bilateral free-trade agreement with a third party once the continental bloc comes into force. Also, with the announcement of the US-Kenya free trade agreement, AfCFTA members are concerned that the US attempt to use Kenya as a “model” will not reflect the needs of other members and could upset regional integration, intra-Africa trade and also peace and unity in the region hence jeopardize the AfCFTA.

@knkaiut  that is right,  But Morocco faced various challenges. e.g When it comes to textiles, the Morocco-US rules of origin were similar to the North American Free Trade Agreement (NAFTA)’s which required Mexican textile firms to use inputs from the US next door. It will be interesting to see if Kenya learns from the US-Morocco deal and how Kenya  will handle and balance its relationship AfCFTA and the economical benefits it is getting from the free trade agreement with the US.

 In this regarded, the implications are because of the fact the Kenya belong to several blocs to which it has obligations, signing a free trade agreement with US has an effect on its commitment to the other members ,and the level of trade which may either increase to decrease, but considering the fact that there are so many contentious issue around this , this agreement do not respect  the principle of reciprocity, countries within the EAC that export their goods to kenya are not guaranteed of the recognition of their local content been exported to the US, it is also true that biotech does not  respect SPS obligation .Kenya as well as all its member states are not well  prepared or matured structurally or logically to benefit from this agreement. This gives room to -unfair competition, discrimination by distorting National Treatment, expose plant and animals health to danger.

As said in the first question, when you look at what Kenya proposes to the US, you will have no doubt that the blocs in which she is a party will not be disturbed, but when you look at the US proposal, you will agree with me that, trae between Kenya and her trading partners will be affected. for example, the US requirements on Kenya to change her laws to suit her needs, will definately cut across all Kenyan blocs where her laws (domestic regulations) have been notified. That will affect Kenya's Schedule of Commitments which will need to be adjusted.

Since some Kenya's partners are not parties to the potential agreement unless they meet potential conditions (which are unknown), that means, the FTA will benefit Kenya more than the rest of the partners like the EAC. That will be contrary to MFN and NT principles under the WTO and the EAC and other trading blocs.

I am aware that, most African countries depend on Agriculture as their backbone of their economy(Tanzania is one of them), if they were exporting to Kenya Agricultural products, it is obvious that Kenya will change her usual trend of trade with her natural trading partners the moment she signs the FTA with the US. That means, for them to benefit, they will be required to meet the conditions under the FTA if not acceeding to it.

My opinion: Kenya had to influence members from the other blocs to negotiate the Agreement with the US (as a bloc), so that whatever comes out of the Agreeement, benefits all parties but also negotiating as a bloc is more meaningful than unilaterally.