Question

Could you elaborate more on the developped country of your choice that trades with Kenya and what goods they trade and if there are any tariffs on these goods?

Answer 1

US is the third most important destination for Kenya exports after Uganda and Pakistan accounting for 8 percentage of its total exports. Kenya exported goods worth US dollar 527 million in 2018 primarily apparels ,coffee and nuts. Its imports were mainly commercial aeroplanes and other spacecraft polymers and medicaments. Kenya has a slim trade surplus that the US will probably be keen to balance. Kenya's tariff dilemma in trade talks with US is Kenya's tariff policy and market assessed terms are in focus in negotiating a new bilateral trade deal with the US and amid calls for caution not to over expose its nascent industrial and agricultural sectors. Though Kenya has over the years reduced its overall protectionism tariffs remain its main trade policy instruments while juggling between boosting international trade and cushioning local producers from external competition. For example in the existing kenya-Us trade arrangement several top US exports to Kenya, such as machinery and aircraft face low or zero tariff though the east African Nations agriculture sector presents the highest hurdles to US exports with an average tariff of 20.3 person and relatively high tariffs on diary, animal products and cereals a deliberate strategy to protect agriculture from external competition.

Comparatively, an analysis by the US congressional research service shows that nearly 80% of US imports from Kenya as at 2019 entered duty-free under either Africa growth opportunity act or the generalized system of preferences, while the remaining imports were largely duty free on most favoured Nation close basis. The US average effective applied tariff on Kenya imports was 0.1% 2019.

A review of submission by multiple influential US business groups to the office of United States trade representative -the government agency responsible for developing and recommending trade policy to the US President - power reveals that Kenya has protectionist policies are likely to be tested in the negotiations for a free trade agreement between the two Nations. For instance a lobby of US dairy producers, the international dairy foods association has raised concern with Kenya's tariff on dairy products claiming it would limit their entry into the country. Currently Kenya maintains its highest tariffs on a range of agricultural products including diary at an average of over 50% because it considers diary to be sensitive products and uses tarriffs to stabilize domestic prices IDFA President and CEO Michael Dykes said in a letter to US trade representative Robert Lighthizer dated August 5.

US negotiators should seek ambitious tariff productions including for protected dairy products in Kenya while seeking a simplified trade facilitative entry of US imports into Kenya he further said.

similarly the US council for international business purpose a seamless market access for US products into the Kenyan marketing including exceptions from border taxes such as the two person import declaration fee and 1.5 % railway development just as imports from Kenya's trading partners in the east African community and the common market for Eastern and South African are.

The core of any free trade agreements is tariff elimination and the agreement with the Kenya should contain commitment by Kenya to expeditiously eliminate its tariffs on US products. Any exceptions should be limited, and subject to automatic revision to match more generous terms Kenya might provide to subsequent negotiating partners. The USCIB argued in it's submission to the USTR.

The US chamber of commerce through its US Africa business center, shares the views that the sought-after FTA deal between the two Nations should eliminate all tariffs and address non tariff barriers for industrial and farm goods, including US tariffs on imports of steel and aluminium from Kenya, while expanding market access for remanufactured goods exports.