Economy

Nairobi, US trade deal faces fresh hurdle in Congress


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Industrialisation, Trade and Enterprise Development CS Betty Maina during SMEs Conference. PHOTO | SILA KIPLAGAT | NMG

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Summary

  • In the absence of a TPA, any deals reached would be subject to amendments by US legislators and would face difficulties getting ratified.
  • The US administration sought more time to scrutinise the pact that had been negotiated by his predecessor, Donald Trump.

Negotiations for a free trade deal between Kenya and the United States face fresh hurdles after the expiry of a key legislative tool for getting faster Congress approval, dimming the prospects for its conclusion.

President Joe Biden allowed the Trade Promotion Authority (TPA), which delegates powers to the US head of state to fast track trade negotiations with the Congress, to expire on July 1.

In the absence of a TPA, any deals reached would be subject to amendments by US legislators and would face difficulties getting ratified.

This will affect trade deals already in the works like the negotiations with the United Kingdom and Kenya, which had hoped for a speedy conclusion of the talks that were official opened in July last year.

When protected by that legislation, trade deals such as the one Kenya is negotiating are effectively “fast tracked” through the US Congress, with lawmakers unable to make substantial changes or amendments to the text of the deal.

President Biden did not ask for the renewal of the authority, with his administration saying that it was reviewing progress of talks with Kenya to make sure that potential accords are consistent with his pledge to prioritize workers.

Instead, the US administration sought more time to scrutinise the pact that had been negotiated by his predecessor, Donald Trump.

In addition to the UK and Kenya negotiations, the Biden administration has shown little interest in agreements like the Environmental Goods Agreement and the Trade in Services Agreement, which could help the president advance his environmental objectives and promote America’s pandemic-stricken services sector.

In its place, the Biden administration’s trade agenda places a premium on enforcing existing trade deals, strengthening America’s manufacturing supply chains, and encouraging domestic investment and innovation.

Kenya wanted to do a deal with Washington before the expiry of the Africa Growth and Opportunity Act (Agoa), which allows sub-Saharan African countries to export thousands of products to the United States without tariffs or quotas until 2025.

The trade deal is seen as a pointer to how America will engage with Africa, especially in the face of China’s growing influence on the continent.

There had been fears that the deal would be abandoned if the Democrats won the election.

Newly appointed US trade Chief, Katherine Tai, said in April this year that the negotiations over a bilateral trade pact with Kenya must reflect the priorities of the new Biden administration — which is pushing for procurement of America-made goods both in the US and outside.

Many US legislators typically oppose trade deals, along with their allies in unions and environmental and consumer groups.



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