Biden dumps Uhuru’s trade deal with Trump

Economy

Biden dumps Uhuru’s trade deal with Trump


Joe Biden and Uhuru Kenyatta

US President Joe Biden meets with his Kenyan counterpart Uhuru Kenyatta in the Oval Office at the White House in Washington, DC, on October 14, 2021. PHOTO | AFP

The Biden administration on Thursday launched a fresh strategic trade and investment partnership with Kenya, replacing an agreement ex-President Donald Trump’s government had inked with Nairobi.

The US and Kenyan governments will start work within three months to develop a roadmap for engagement in 10 areas, including agriculture, digital trade, action on climate change, and trade facilitation and customs procedures, the US Trade Representative’s Office said.

The launch follows last year’s statement by the US government that it would review the Trump-era bilateral trade negotiations with Kenya in 2020 over a potential free trade agreement (FTA).

Mr Trump and President Uhuru Kenyatta had in February 2020 announced the intention to start formal trade talks, triggering activities that were expected to culminate in a deal within two years and ahead of the August 9 General Election.

ALSO READ: US looks beyond delayed free trade deal in commercial ties with Kenya

The bilateral talks paused in the wake of the American presidential elections in November 2020.

Mr Biden was sworn in as US President in January 2021, ending the tumultuous four-year presidency of Mr Trump.

A change of guard at the White House raised uncertainty over the FTA deal, with Mr Biden embarking on the reversal of many policies that had been rolled out by the Trump administration.

“Kenya and US governments will commence working within three months to develop a detailed roadmap for engagement in each of these issues,” Trade Cabinet Secretary Betty Maina said in a statement on Thursday.

The 10 talking points will include supporting businesses owned by women and youth through trade, promoting workers’ rights, anti-corruption efforts, integrating small and micro business into international trade and improved regulatory services.

The US will also seek to enforce a deal signed in 2014 that provides for “the legal framework for the exchange of information and evidence to assist countries in the enforcement of customs laws, including duty evasion, trafficking, proliferation, money laundering, and terrorism-related activities.”

Analysts quoted in the US press reckon Mr Biden’s plan is designed to be more holistic and longer-lasting than Mr Trump’s, which leaned towards cuts in tax rates, regulations as well as tariffs.

In May 2020, the US unveiled a list of objectives to guide the bilateral talks with Kenya after receiving more than 5,000 comments.

The US Chamber of Commerce said at the time that the trade talks should achieve a single, comprehensive agreement with Kenya that removes barriers to trade and investment, instead of pursuing a phased approach.

ALSO READ: US trade lobby group slams Biden’s delay to seal Kenya deal

The business lobby said the talks should eliminate all tariffs and address non-tariff barriers for industrial and farm goods, including US tariffs on imports of steel and aluminum from Kenya while expanding market access for remanufactured goods exports.

It also called for commitments to ensure US access to Kenya’s services market, and address intellectual property rights and enforcement as they relate to patents, copyrights, trademarks, and trade secrets.

In addition, the deal should eliminate forced technology transfers, including an investor-State dispute settlement mechanism, and formalise a joint commitment to follow good regulatory practices.

To facilitate digital trade, it should spell out a mutual right to transfer and store data across borders for all sectors, prohibit data localisation, and ban custom duties and taxes on electronic transmissions.

The negotiation of a free trade agreement with Kenya, which would be the first in sub-Saharan Africa, comes amid growing concern by the US about China’s investments across Africa.

The Biden administration is seeking to cut China’s share of the global trade.

Nairobi wants to do a deal with Washington before the expiry of the Africa Growth and Opportunity Act (Agoa), which allows sub-Saharan African states to export thousands of products to the US without tariffs or quotas until 2025.

ALSO READ: Inside the burning issues as Kenya-US trade talks resume

Mr Biden’s “Build Back Better” blueprint aims to revive the US economy from the ravages of Covid-19 through use of sweeping government power to reshape the world’s largest economy and counter China’s rise.

Millions of jobs

His policy mix includes increasing corporate taxes to fund innovation and buy American products to expand jobs; tax incentives and penalties to encourage US firms to keep and create jobs in the US as well as $2 trillion investment in clean energy. He bets on creating millions of jobs building infrastructure such as roads and tackling climate change — a topic that Mr Trump gave little prominence to.

The Biden plan signals that the US will be keen to protect American firms in the quest to shore up manufacturing and seek a larger share of the global trade currently in the hands of China while pushing for bilateral trade deals.

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