US-Kenya free trade agreement (FTA) discussions start today, opening the path to the first FTA between the US and a sub-Saharan African country.
The US consistently ranks as one of Kenya’s top export markets, maintaining a $1.1 billion two-ways goods trade in 2018; this was a 4.9% increase from the previous year. The East African country is also a major recipient of US foreign assistance, a hub for US security initiatives in the region and the second-largest beneficiary of tariff benefits provided by the African Growth and Opportunity Act (AGOA).
While Kenya remains a lower-middle-income country with over 80% employment in the informal sector, it has sustained average GDP growth of over 5% since 2010. Due to Kenya’s geostrategic location, it is considered a vital regional market for US investors. A potential FTA would be particularly helpful for the US to counter growing Chinese influence in Africa—despite Kenya’s efforts to diversify economic ties, China remains its largest trading partner.
Kenya’s need to balance its relations with the US with its African commitments. The East African Community has expressed concerns that the FTA may discourage intraregional trade and that it will likely set the rhythm of a process that is meant to serve as a model for future US FTAs in Africa.
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Bryan serves as a research analyst and editor on the Current Developments Team, focusing on economic trends, development and geopolitics in Latin America and the Caribbean.