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USTR releases negotiating objectives of the proposed US-Kenya FTA

The office of the US Trade Representative (USTR) recently released the specific negotiating objectives of the proposed US-Kenya Free Trade Agreement. The proposed free trade agreement (FTA) intends to build on the objectives of the African Growth and Opportunity Act (AGOA) and serve as an enduring foundation to expand US-Africa trade and investment across the continent.

USTR will secure duty-free access for US textile and apparel products and seek to improve competitive opportunities for exports of US textile and apparel products while taking into account U.S. import sensitivities. The proposed agreement will also establish origin procedures that streamline the certification and verification of rules of origin and that promote strong enforcement, including with respect to textiles. The same/very similar language is used in the proposed US-Japan Free Trade Agreement and US-EU trade negotiation.

Of the total $667million US merchandise imports from Kenya in 2019, nearly 70 per cent were apparel items, making the sector the single largest stakeholder of the proposed FTA. While still being a relatively minor supplier, Kenya’s apparel exports to the US reached a record high of $453million in 2019, which was an increase of 132 per cent from ten years ago. For many US fashion companies, Kenya is also its single largest apparel-sourcing base in Sub-Saharan Africa (SSA), accounting for one-third of the region’s total apparel exports to the US in 2019.

However, how to design the textile and apparel chapter in the proposed US-Kenya FTA is not easy. A preliminary content analysis of the 133 public comments submitted to the US International Trade Commission (USITC) as of May 2020 shows that various stakeholders have proposed competing views on several complicated issues, ranging from the rules of origin to the tariff elimination schedule.