Biden team set to review Kenya, Trump trade talks

The East African | 5 April 2021

Biden team set to review Kenya, Trump trade talks

By Brian Ngugi

The Biden administration will review bilateral trade negotiations and targets that ex-President Donald Trump regime made with Kenya last year over a potential free trading deal.

The new US administration wants to make sure that the negotiations for a bilateral trade agreement and talks objectives are consistent with Biden’s $4 trillion revamp of the American economy that focuses on a muscular industrial policy with an eye on fighting climate change.

This means that the start of the trade talks could be delayed and the objectives of the bilateral pact recast to recognise Biden’s agenda with some of the aims of the negotiations set by the Trump administration likely to be dropped.

Newly appointed US trade Chief, Katherine Tai, said on Friday that the negotiations over a bilateral trade pact with Kenya must reflect the priorities of the new administration — which is pushing for procurement of America-made goods both in the US and outside.

“Ambassador Tai highlighted her ongoing review of the negotiations to ensure that any agreement aligns with the Biden-Harris administration’s Build Back Better agenda,” said a statement from the US government after a virtual meeting between Ms Tai and Kenya’s trade Cabinet Secretary Betty Maina.

"They also discussed the bilateral trade negotiations conducted under the previous administration.”

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

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

Kenya and the US formally launched negotiations in July last year for a bilateral trade pact that the two economies hope could serve as a model for additional agreements across Africa.

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

Two-way goods trade between the US and Kenya totalled Sh118 billion in 2019, up 4.9 percent from 2018.

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

Mr Joe Biden was sworn in as US President on January 20, ending the tumultuous four-year presidency of his predecessor Trump.

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

Ms Tai on Friday expressed US commitment to the Kenya deal. Biden’s “Build Back Better” blueprint aims to revive the US economy from the ravages of Covid-19 through a sweeping use of government power to reshape the world’s largest economy and counter China’s rise.

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 tackle climate change — a topic that Trump gave little prominence.

The Biden’s plans signal 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.

Trump’s policy had tax cuts, regulatory rollbacks and a continuation of his administration’s “America First” crackdown on trade deals and trading partners Washington regards as unfair.

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

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

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

The business lobby 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 customs duties and taxes on electronic transmissions.

source : The East African

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