Kenya seeks extension of US export trade deal

from The Star (Kenya)..


June 25, 2013

KENYA has started lobbying for a trade deal between Africa and the United States be extended by not less than 10 years once it expires on September 30, 2015.

The Kenyan government says the African Growth and Opportunity Act, popularly known as Agoa, should actually be transformed into a permanent trade agreement.

Agoa provides trade preferences for quota and duty-free entry into the United States for certain goods. Such benefits include expanded market access for textile and apparel goods into the United States for eligible countries.

Currently, Kenya exports only about 30 product lines against the total of 6,400 lines provided for in the initiative. Among the goods Kenya exports to the US under the Agoa deal include tea, horticulture, textile and apparels, coffee and tobacco products. It is estimated that Kenya exported goods worth some Sh4.67 billion to the US in 2010 and Sh5.83 billion in 2011.

“It is imperative that Agoa should be extended well in advance of its September 30, 2015 expiration in order to avoid the instability, economic disruptions and job losses that are inherent in last-minute renewals,” says a draft position report on the future of Agoa prepared by the African Cotton and Textiles Industries Federation.

Kenya’s cabinet secretary for East African Affairs, Commerce and Tourism Phyllis Kandie said Agoa should be recognised as a framework for partnership and should therefore be extended on a long term, sustained and predictable basis. Kandie said the extension will enable African countries to have enough time to build their competitive capacity in the global markets.

According to the federation’s executive director Rajeev Arora said the long period will be predictable to allow for good investments to flow into the beneficiary countries.

“This predictability principle has been the reason for the beneficiary countries to appeal to the US Administration to even consider Agoa a permanent feature in the Sub-Saharan Africa- US trade arrangements,” said Arora during a consultative meeting on the status of Agoa.

Kenya has also suggested that the so called third country fabric rule of origin under which 95 per cent of apparel imports under Agoa are done should be extended for the full term of Agoa renewal. The rule allows apparel manufacturers in Agoa from less developed countries the leeway to utilise yarns and fabrics from any region.

The federation further wants the same terms of access to be applied to all Agoa beneficiaries. The lobby group is also pushing for a free trade agreements between the US and Africa.

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