The United States continues to try to break down plurilateral trade agreements into bilateral agreements, and Kenya appears to be the first sub-Saharan African country on its list. During his visit with Kenyan President Uhuru Kenyatta, U.S. President Donald Trump announced that the United States intends to open formal trade negotiations with the East African nation. Afterward, the Office of the United States Trade Representative published a press release saying that, at the direction of the president, U.S. Trade Representative Robert Lighthizer would officially notify Congress of the U.S. intent to start negotiations as stipulated under the administration's trade promotion authority (TPA) given by Congress.
Many Trade Deals vs. Relying on One Trade Act
The United States wants to end the Generalized System of Preferences (GSP), a program that gives nonreciprocal, duty-free tariff treatment to some products imported from various developing countries. Even more, the administration seeks to replace the African Growth and Opportunity Act, a measure that goes beyond the GSP to significantly enhance tariff-free access for several thousand more goods to the United States for qualifying sub-Saharan African countries. Both moves are part of a broader U.S. trade strategy of shifting toward bilateral trade deals.
The African Union and most African countries would prefer to have a new plurilateral agreement to replace the African Growth and Opportunity Act, which is set to expire in 2025. But Kenya appears to have broken ranks with other African countries as it looks for a more stable trade relationship with the United States. The Trump administration will meanwhile try to use the agreement signed with Kenya as a model for talks with other African countries, although this may not prove easy. Kenyatta, for example, has said that the bilateral negotiations with the United States do not mean it does not support the African Continental Free Trade Area, which comprises 55 African Union member states, forming a market of more than 1.2 billion people. Kenyatta also said that a bilateral agreement with the United States would create a sounder footing for its trade relationship with Washington than does the African Growth and Opportunity Act, which he compared to "training wheels."
Once the Trump administration formally notifies the U.S. Congress of its intent to enter negotiations, the TPA requires that the Trump administration wait at least 90 days before entering talks. At least 30 days before negotiations begin, the Trump administration must publish its negotiating objectives. These will be the Trump administration's first official trade negotiations with a developing country under the TPA, and the first formal trade talks by any administration with a sub-Saharan African country. It will be important to track U.S. negotiating objectives.
Trade negotiations and a trade deal with Kenya are highly unlikely before the U.S. presidential election in November and official talks cannot begin until early May. Moreover, the Trump administration must notify Congress 180 days before signing an agreement of any potential changes to U.S. trade remedy laws, which the United States uses to enforce trade rules; this could push a signing date to after the November election.
Background
The United States ran a small trade deficit with African Growth and Opportunity Act countries in 2019, importing $20.2 billion worth of products and exporting $14.9 billion, but in years past, the U.S. trade deficit with those countries has been much higher. The deficit peaked at $66 billion in 2008, just eight years after the African Growth and Opportunity Act entered into force. It has fallen since, bottoming out at just $865 million in 2015. U.S. purchases of oil and natural gas from oil-producing countries like Nigeria, Angola, the Republic of the Congo, Gabon and Chad have always comprised the bulk of trade between the United States and African Growth and Opportunity Act countries. Trade between Kenya and the United States, meanwhile, is not particularly extensive. The United States had a trade deficit of just $294 million in 2019 with Kenya, almost entirely due to the textile trade — which the African Growth and Opportunity Act covers. The United States has had a trade surplus with Kenya as recently as 2015.
