Trade liberalization with Africa – notice of intent from US to start negotiations with Kenya

The United States Trade Representative on March 17, 2020 provided notice to the U.S. Congress of the Administration’s intention to enter negotiations for a trade agreement with Kenya which would hopefully provide a model trade agreement for use with other countries in Africa. See, e.g., Yesterday’s press release indicates that –

“’Under President Trump’s leadership, we look forward to negotiating and concluding a comprehensive, high standard agreement with Kenya that can serve as a model for additional trade agreements across Africa. Kenya is an important regional leader, a strategic partner of the United States, and a commercial hub that can provide substantial opportunities for U.S. trade and investment,’ said Ambassador Lighthizer.”

Kenya is one of 38 countries in Sub-Saharan Africa covered by the U.S. trade preference program for Africa, the African Growth and Opportunity Act enacted in 2000 (though individual countries have been removed or added back based on market developments in country). See The 38 countries included within U.S. trade data for AGOA 2020 are the following (listed in order of U.S. trade balance in 2019, from largest trade deficit to largest trade surplus):

South Africa
Cote d`Ivoire
Sao Tome & Prin
Cabo Verde
Cen African Rep
Sierra Leone
Burkina Faso

In 2019 the 38 AGOA countries exported $20.423 billion to the United States (U.S. imports for consumption) with Kenya being the 7th largest exporter of the group with 2019 exports of $667 million (or 3.27% of the total imports for consumption to the U.S. from the 38 countries). Most of Kenya’s exports to the U.S. consist of apparel products (16 of the top 22 6-digit HS categories of US imports for consumption from Kenya are clothing). South Africa was the largest source of U.S. imports from the 38 countries with $7.634 billion in 2019 (37.35%), and Nigeria was second with $4.966 billion (23.32%).

Kenya was the seventh largest importer of U.S. exports (U.S. domestic exports) in 2019, with the U.S. exporting $375 million to Kenya or 2.33% of the $13.717 billion total U.S. domestic exports to the 38 countries. The largest 6-digit HS category of U.S. domestic exports to Kenya for the 2015-January 2020 period was HS 8800.00, civilian aircraft, engines and parts, but U.S. exports declined from $620.2 million in 2015 to $50.3 million in 2019. South Africa and Nigeria are the two largest of the 38 countries receiving U.S. exports, with South Africa in 2019 receiving $4.645 billion (33.86%) and Nigeria $3.085 billion (22.49%).

The U.S. has run a trade deficit with the 38 countries collectively and with Kenya individually in the 2015-2019 time period. In 2019, the U.S. trade deficit (domestic exports – imports for consumption) was $6.706 billion with all 38 countries and $292 million with Kenya (8th largest deficit, 4.25% of total). Again South Africa (deficit of $2.989 billion, 44.57%) and Nigeria (deficit of $1.881 billion, 28.05%) were the largest two countries within the 38 in terms of U.S. trade deficit.

While U.S. trade with Kenya and other countries in Sub-Saharan Africa is relatively small compared to U.S. trade with other major areas of the world, there is significant interest in expanding trade relationships with Kenya and other countries in Sub-Saharan Africa within the business community and politically in the United States. Business interest flows from the rapid growth that is ongoing in Sub-Saharan Africa. For example, the World Bank data on Gross Domestic Product and GNI per capita (in current dollars) shows the total Sub-Saharan Africa area as having very rapid growth since 2000. Total GDP went from $372.5 billion in 2000 to $1.831 trillion in 2014 (+391.5%) before declining to $1.71 trillion in 2018 (+359.1% from 2000). Similarly GNI/capita went from $552.868 in 2000 to $1,809.31 in 2014 (+272.6%) and $1,517.054 in 2018 (+ 174.4%) . See

While the per capita GNI and total GDP in Sub-Saharan Africa are far lower than comparable figures in other regions of the world, the rate of growth over the last two decades in Sub-Saharan Africa is significantly higher, making the area an important area for trade negotiations for the U.S. For example, World Bank data show growth in the Europe and Central Asia area as being 130.0% for GDP between 2000 and 2018 and 94.3% for GNI/capita. See Thus, the growth rate in Sub-Saharan Africa is three times as fast for GDP and more than twice as fast for GNI/capita when compared to Europe and Central Asia.

A Challenging 2020 for New FTA Negotiations

The U.S. has a very challenging agenda for 2020 before adding new negotiations with Kenya – a phase two agreement with China and one with Japan; ongoing negotiations with the EU; negotiations with the United Kingdom; and negotiations with India. There is thus what looks like a full agenda already in place for the United States which, of course, has elections this fall which may cut the level of engagement at least in the later months of the year.

Add the global complications from the worldwide coronavirus (covid-19) pandemic, and it could be a challenge for government personnel in both Kenya and the United States to be able focus attention and resources on negotiating an ambitious free trade agreement in 2020. The short-term challenge may be greater for the U.S. with its large and rapidly growing number of covid-19 cases than for Kenya where to date there are only seven covid-19 cases confirmed (all flowing from travellers coming from countries with significant numbers of cases). See, e.g.,;

That said, talks with Kenya are an important opportunity to improve trade relations with a significant country in Sub-Saharan Africa and potentially create a blueprint for regional efforts for the current or future Administrations. Moreover, with the recently completed USMCA, the Trump Administration has an agreement it views as the model for the future with other trading partners. One would expect the U.S. to present many of the chapters from USMCA as applicable to any FTA with Kenya. Depending on Kenya’s willingness to enter into an ambitious FTA, there could be a path to a deal with the U.S. or at least the possibility for significant progress in 2020. Let’s hope meaningful progress can be made in the coming months despite the health and other challenges that are present.

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