In 2016, I worked with a Kenyan exporter and her buyer seeking to address the technical barriers to importing French beans from Kenya into the United States. A major vegetable export crop in Kenya, French beans are grown mostly by small-scale farmers, providing them with significant income earning opportunities. Virtually all the beans are exported to Europe. None of it is imported into the United States. The US-Kenya trade negotiations present an opportunity to reframe US-Kenya trade relations.
There is pent-up demand in the United States for fresh whole French beans from Kenya, which have the reputation of being the best in the world. Furthermore, unlike its competitor, South Africa, Kenyan farmers can grow the beans year-round in multiple cycles, creating a competitive edge in the US market. The obstacle is a 2011 USDA requirement that French beans from Kenya can only be imported when cut into pieces of up to 2 centimeters in length or shredded or split the length of the bean pod. There is no US market for the product in this form.
In 2011, these USDA requirements provided the best mitigation measures to prevent the importation of pests. Almost a decade later, new technologies and farming methods remove the need for this approach. The US-Kenya trade negotiations launched in July of this year provide the opportunity to apply modern solutions to these and other trade barriers.
US-Kenyan Trade Framework
Agriculture is the driving force of the Kenyan economy, providing livelihoods for more than 80% of the Kenyan population. US-Kenyan trade takes place primarily through the framework of the two programs that grant sub-Saharan African countries preferential access to US markets – the African Growth & Opportunities Act (AGOA) and its Generalized System of Preferences (GSP) program. Despite its promise, AGOA has delivered very little to agro-businesswomen like my former client and the farmers who rely on her to buy their produce. In 2015, less than 3% of AGOA exports were in the agriculture sector. Both AGOA and GSP are limited to tariff reductions whose benefits become less and less attractive each time the US negotiates a trade agreement with another country. Furthermore, the Congressional grant of unilateral access expires periodically and has to be renewed, creating uncertainty for traders.
A US-Kenya trade agreement could be a significant development in U.S-Africa trade relations and an improvement over AGOA. The U.S. Trade Representative (USTR), Ambassador Robert Lighthizer, has indicated that the U.S.-Kenya agreement will become a model for future trade agreements with other African countries.
Such a model is badly needed. The first US attempt in 2003 to negotiate a trade agreement with sub-Saharan Africa, the US-South African Customs Union (SACU) negotiations, failed. One reason for the failure was the application by the US of its “one-size fits all” approach to trade negotiations modelled on its existing agreements. A second issue was the inevitable challenge of negotiating with a regional bloc committed to extending preferred treatment to its members. One would not, for example, imagine a US-Germany free trade agreement unless, like Britain, the country chooses to leave the European Union.
Both challenges exist in the context of the US-Kenya negotiations. USTR has identified 24 chapters on which it plans to negotiate, including technical barriers to trade, intellectual property, digital trade, anti-corruption, good regulatory practices, and subsidies, among others. Kenya is a member of two regional trading blocs. As a signatory to the African Continental Free Trade Agreement (AfCFTA) Kenya will have to grant to AfCFTA members any tariff concessions granted to the United States. Kenya is also the leading economy in the East African Community (EAC), which has a single customs territory comprising Kenya, Uganda, Tanzania, Rwanda, Burundi, South Sudan. Members of a customs union apply a common external tariff to goods entering the customs territory.
Nevertheless, going back to where we began this post, a US-Kenya trade agreement is about so much more than tariffs. It is also the opening for both countries to address non-tariff barriers such as the ones that prevent the importation of Kenya’s French beans. It provides the opportunity for Kenya to improve and expand on its own trading regime and business climate. And for farmers, agro-businesses and traders wishing to meet the US demand for French beans from Kenya, it is the door to the technical capacity building on SPS standards and trade facilitation measures that promise increased agricultural trade between the United States and Kenya. The US-Kenya trade negotiations present an opportunity to reframe US-Kenya trade relations.
DevelopTradeLaw, LLC provides business-oriented advice to the legal challenges that face companies doing business internationally. Contact us for more information or advice on the topic of this article.
I am a seasoned international trade and customs attorney, and policy adviser for various companies and governments with a demonstrated history of successfully developing and implementing sustainable and dynamic trade programs. I am experienced in creating partnerships with various business-support organizations to drive compliance and growth in the international market.