US companies have frozen their investment plans in Kenya due to the uncertainty about a new free trade agreement between the two countries.
Many American companies had already started investing in Kenya, spurred on by the prospect of a new bilateral one Trade and investment pact between Washington and Nairobi.
However, talks about the free trade agreement were shaken by the exit of the administration of President Donald Trump at the end of last year.
Scott Eisner, President of the US -Africa Business Center of the US Chamber of Commerce confirmed the setback for American companies, even though President Joe Biden’s administration tried to review the proposed trade deal.
“Many companies had started investing in Kenya after the talks the Trump administration with Kenya on a bilateral free trade agreement, but that those plans were on hold until the Biden review of this policy was completed “He was quoted by Reuters as saying.
Talks over the free trade agreement between Kenya and the US have suffered a major blow one month after the expiry of a major law known as the Trade Promotion Authority (TPA) that got its approval would have accelerated Congress. The negotiators had relied on a TPA issued by Congress to expedite the talks before it expired on July 1st.
However, President Biden allowed the TPA to expire to give his administration more time Proposal to consider agreements launched by its predecessor’s government.
A TPA guides US governments in pursuing trade deals that promote domestic jobs, remove barriers in foreign markets, and establish rules to stop unfair trade.
Under this law, Congress retains the power to examine and decide whether a proposed US trade agreement is implemented.
The administration of President Biden announced on Tuesday launched a new push to expand business relationships between US companies and Africa, with a focus on clean energy, health, agribusiness and transportation infrastructure on the continent.
Kenya is intervening eager to sign a new trade agreement with Washington (Agoa) before the current agreement under the Africa Growth and Opportunity Act expires.
The reciprocal trade in goods between the USA and Kenya in 2019 amounted to Ksh 118 billion (118 billion) Million US dollars), up 4.9 percent from 2018. President Biden, who asked for nearly 80 million US dollars for the initiative in his 2018 budget proposal, May aims to focus on women and equal opportunities, with an expanded role for small and medium-sized enterprises.
In addition to the negotiations in the UK and Kenya, the von Biden government has little interest in agreements such as the environmental goods agreement and trade agreements in services that could help the president achieve his environmental goals and promote America’s pandemic-stricken service sector.
In its place, the Biden- Government focuses on enforcing existing trade deals, strengthening American manufacturing supply chains, and encouraging domestic investment and innovation.
First published by Business Daily