THE TTALK QUOTES


On Global Trade & Investment
Published Three Times a Week (with occasional bonus quotes) by
The Global Business Dialogue, Inc.
Washington, DC  20006
No.56 of 2020
FRIDAY, JULY 24, 2020

Click HERE for Monday's WTO quote from Terence Stewart.


ANTICIPATING AN FTA

"I want to assure all of you of Kenya’s unwavering commitment on developing the strongest ever trade and investment framework with the United States."

Uhuru Kenyatta
February 6, 2020
CONTEXT
His Excellency Uhuru Kenyatta, the president of the Republic of Kenya, spoke at the U.S. Chamber of Commerce on the afternoon of February 6, 2020. He arrived at the Chamber fresh from a meeting with President Trump, a meeting at which the two leaders announced their intention to pursue a free trade agreement between the Kenya and the United States. Here is a bit more of what President Kenyatta said about the plan to negotiate an FTA with the U.S.:

After my meeting this afternoon with President Trump, we did agree that the office of the United States Trade Representative as well as our Cabinet Secretary responsible for trade, both these two offices were mandated to reflect and present the best framework for a future Kenya-US trade and investment relationship. And there was a very clear tone of urgency for these two offices to move with speed to bring this to a conclusion. 

We have had a trade and investment working group that has been working to deliver that pillar of economic prosperity. And today, I want to assure all of you of Kenya’s unwavering commitment on developing the strongest ever trade and investment framework with the United States. We are very keenly looking forward to concluding trade arrangements between our two countries. And I believe that these – this envisioned trade agreement and arrangement – will not only serve Kenya and the United States but will probably set the base for a new engagement between the United States and other African countries.

That was five months ago. The negotiations that Presidents Trump and Kenyatta “mandated” were formally launched on July 8 by the trade ministers for the two countries: U.S. Trade Representative Robert Lighthizer for the United States and the Cabinet Secretary for Industrialization, Trade, and Enterprise Development Betty Maina for Kenya. 

This is not the place for a full discussion of either the background the potential of these negotiations. Still, a few dates might be helpful.

December 12, 1963 – Under the leadership of then-Prime Minister (later) President J omo Kenyatta , Kenya formally gains its independence from the United Kingdom. (And, yes, Uhuru Kenyatta is Jomo Kenyatta's son.)

May 18, 2000 – President Bill Clinton signs the African Growth and Opportunity Act (AGOA) into law. Under its provisions, certain goods – including textiles and apparel-- from eligible sub-Saharan African countries enjoy duty-free and quota-free access to the United States. Kenya has been an AGOA beneficiary from the beginning. But AGOA is going away. Although it has been renewed several times, most recently in 2015, there is no plan to extend it again, and so, in 2025, it will expire.  

January 2010 – The East African Customs Union enters into force. Also in 2010, the East African Common Market comes into effect. Both are expressions of the East African Community, which originally included Burundi, Kenya, Rwanda, Tanzania, and Uganda. It now also includes South Sudan, which joined in 2016. 

October 16, 2014 – The European Union finalizes an Economic Partnership Agreement with the then five countries of the East African Community: (Our understanding is that this agreement has not yet entered into force as it has not yet been ratified by all of the members of the East African Community.)

January 21, 2020 – Meeting at 10 Downing Street, President Kenyatta and Prime Minister Boris Johnson agree to bilateral trade talks. The goal is to have an agreement by the end of this year, i.e., by December 31, 2020. 

July 8, 2020 - Trade talks between the United States and the Republic of Kenya formally begin.

I n 2025 – AGOA is set to expire.

COMMENT
The above, very brief chronology leaves out far more than it includes. It does, however, at least mention some of Kenya’s trading partners, with one critical exception: China. In terms of total trade, China is Kenya top trading partner, though the bulk of that trade is on the import side. Kenya buys more, much more from China than it does from any other single country. On the export side, it sells more to the U.S. But exports and imports are not the whole story. 

Consider, for example, the concern that Kenya’s inability to repay loans from China for a Belt and Road railway project could, ultimately, mean Kenya will end up ceding ownership of the port of Mombasa to China. The situation is complicated both by geopolitics and by a recent Kenyan court decision, but the worry is there. 

President Kenyatta did not mention China in his February speech at the Chamber, not by name.  We suspect, however, that we were not the only ones who thought of China as we listened to these parting words from Kenya’s president:

I will beg leave but once again assure you that this is not the last time you’re going to see this ugly mug. It’ll be here, knocking on your doors every single, every single time. We will be here. Because, like I say, I deeply, deep down in my heart want to see a return to the kind of partnership that Kenya and Africa had with the United States when we were struggling for our independence. We had a wonderful and fantastic partnership – a collaboration that saw not only us get our independence but also the training of those who took up the mantle of leadership in the early days.

 It is this shared common value, belief in freedom, democracy, and an enterprise that makes me believe that United States can and should be the partner of choice for the African continent.  Don’t let others take what should be yours.

***

We are fond of quoting a former Indian diplomat, Sukhdeep Brar.  Over a lunch, long ago, she made the observation that “Diplomacy is about making friends.”  Indeed, it is, and against that standard the U.S.-Chamber of Commerce deserves high marks. It is impossible to watch the video of their February 6 event with President Kenyatta without being impressed by the warmth of the relationships and the years of work that the Chamber has clearly put into developing its ties to Kenya and elsewhere in Africa, including the creation in 2015 of the U.S.-Africa Business Center.

SOURCES AND LINKS
An Afternoon with President Kenyatta takes you to the video of President Kenyatta’s presentation at the U.S.-Chamber of Commerce on February 6. This was the source of today’s featured quote.

Mombasa, a Railroad, and Chinese Loans is a link to one of many stories about this China funded Belt and Road project in Kenya, this one from Outlook India. 

U.S.-Kenya Trade Talks is a link to the joint statement issued by the United States and Kenya at the start of their negotiations towards a U.S.-Kenya FTA. 

About the EAC is the website of the East African Community and includes information on the East African Customs Union and the East African Common Market. Both are listed under Integration Pillars.

Kenya’s Trade and Trading Partners is a GlobalEdge Report on Kenya’s trading partners. 

At 10 Downing Street is a link to an article from the Kenyan Broadcasting Corporation on the January meeting between President Kenyatta and Prime Minister Johnson.

The EU and EAC is a link to an EU document on the EU Partnership Agreement with the Eastern African Community. 
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