Unilateral approach in the Kenya-US free trade agreement is detrimental to African integration

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While the Kenya-US trade agreement is not yet concluded, it would be of paramount importance to explore the background of trade engagements. Picture: iStock
While the Kenya-US trade agreement is not yet concluded, it would be of paramount importance to explore the background of trade engagements. Picture: iStock

BUSINESS


In recent days, there is a great interest in Kenya and the US finalising their trade agreement. There are concerns that the agreement might violate the ratified African Continental Free Trade Area (AfCFTA) and the East African Community (EAC) Customs Union. Article 37, Clause 3 of the EAC Customs Union protocol on coordination of trade relations states that negotiation with any third parties should be mutually beneficial to all members and that participation and joint representation should be considered in international trade.

Article 4, clause 2 of the AfCFTA on most favoured nation treatment gives room for state parties to make autonomous agreements with third parties as long as the objectives of the protocol are not undermined or hindered. It also ensures that any advantage, concession or privilege offered to the third party is also extended to other state parties involved in the ratification.

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While the Kenya-US trade agreement is not yet concluded, it would be of paramount importance to explore the background of trade engagements with other African countries. In the past, Kenya had shown commitment for economic partnership agreements in which the East African countries would have duty free access to the EU markets. There was reluctance from the other member states to sign the agreement with only Rwanda as the other member expressing interest. Notably, Kenya is the only member not among the least developed countries and so having no privilege of duty free access without any agreement in place.

There was also a “coalition of the willing”, involving access to the seaport and oil exploration, that fell apart due to the alternative pragmatic paths taken by member states.

While it is understandable that Kenya would be prompted to take a unilateral direction based on historical engagements with its neighbours, it should also be obvious that economic self-interest is at play. Politics and economics are based on self-interest, either individually or nationally. The instinct of self-preservation in terms of power and resources is the basis of natural law that is inherently perceived by every individual.

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It is through this basis that limits on civil government are placed and the right to private property is maintained. Kenya is the only member state in the EAC without the privilege accorded to the least developed countries for duty free access to US markets save for the African Growth and Opportunity Act due to expire in 2025. The danger lies in creating an atmosphere of hostility from the other member states not part of the EAC but have ratified the AfCFTA agreement. It would be politically and economically prudent that Kenya seeks views from the other members of the AfCFTA. This will ensure easy elimination of non-tariff barriers and maximum consideration of the different market dynamics and supply chains for each country.

In the event of seeking a consultative engagement with the members of AfCFTA, it’s likely that some will not need to be part of the negotiations but having had considerable discussions in ensuring the free market of ideas, the issues raised will be utilised in the negotiations with the US.

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For the member countries that will show immediate interest, a multilateral agreement in a “coalition of the willing” will be most effective for a productive consensus. It will also serve the interests of the US that with the specialisation of each member country involved, maximum output will be realised for all parties involved.

Timothy Mwangi is a writing fellow at African Liberty and a governance enthusiast who advocates for libertarianism and Austrian economics. @Kimoshtim


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