What you need to know:
- As Kenya strives to realise its Vision 2030 economic blueprint, the conduct of export oriented trade and investment remains the only viable option to attain the desired socio -economic development.
- Asian tigers have done it using trade, and Kenya too should not falter in its quests to pursue its vision.
The ability to conduct foreign relations is one of the tenets of statehood alongside existence of a population, defined boundary and a government. Since 1963, when Kenya gained its independence, the country has joined numerous intergovernmental organisation such as United Nations (UN), Organization of Africa Unity (OAU) which later changed to Africa Union(AU), East Africa Community (EAC), Intergovernmental Organization for Development (IGAD), Common Market for Eastern and Southern Africa (COMESA) and International Conference on the Great Lakes Region (ICGLR).
On the international trade front, Kenya signed Economic Partnership Agreement (EPA) with the European Union (EU) since it did not qualify for the Everything But Arms (EBA) initiative, which is a Generalized System of Preference (GSP) extended by EU to the least developed countries. The country is also a member of the World Trade Organization (WTO) and is actively fulfilling its obligations under both the EAC and COMESA.
EAC, of which Kenya is a founding member, has reached a significantly higher level of economic integration viz common market; whereby factors of production such as capital can freely move, and right of establishment permitted enabling entrepreneurs to freely move and establish themselves in any of the five members which have not put a reservation to that right.
Furthermore, as a customs union, EAC members have common external tariff, rules of origin and elimination of almost all internal tariffs on goods moving within the bloc, provided the rules of origin are met.
The high level of economic integration amongst certain regional economic blocs within Africa was recognized during the negotiation of the Africa Continental Free Trade (ACFTA), whereby the principle of preservation of acquis and variable geometry are expressly recognised in Article 5 of the Agreement establishing ACFTA. Therefore, regional economic blocs trade commitments are not inconsistent with the Africa continental free trade area obligations, a fact which is confirmed by the provision of Article 19(2) of the constitutive instrument of the Africa continental free trade area.
It surmises to reiterate that Kenya`s commitments to Africa continental free trade area are those commitments it has taken under the EAC under the principle of acquis.
EAC Customs Union
Within the EAC, Article 37 (4) of the Customs Union Protocol allows any member states to negotiate a trade agreement with a third party provided the EAC secretariat is duly notified, and other members states given copies of the draft trade agreement to provide their comments to be considered during the negotiation of the trade agreement. So it is not true that EAC treaty absolutely prohibit negotiation of trade agreement with a third party state.
Pursuant paragraph 7 of to the Africa Union Assembly decision AU/ Dec/ 714 (XXXII) on the Africa Continental Free Trade Area taken in February 2019, Kenya is only required to inform the Africa Union assembly of its intention to negotiate a free trade agreement with the United States, and reassure the continental body that the proposed negotiation of a free trade agreement will not undermine the Africa Union vision of creating one African market.
AGOA will not be renewed post 2025
The United States has unequivocally stated that Africa Growth and Opportunity Act (AGOA) shall not be renewed upon its expiry in 2025, so it is only prudent that a country which is dependent on foreign trade such as Kenya starts charting its own course. The memories of 2016 events are so dire to imagine, when the Kenyan exporters had to pay tariffs to access EU market, after the refusal by the other three EAC countries (Burundi, Tanzania and Uganda) to sign Economic Partnership Agreement, since they qualified to access EU markets under Everything But Arms initiative as they are classified as least developed countries.
Kenya had no alternative except to sign EPA since it did not qualify for everything but arms initiative due to its economic status as a developing country. Rwanda too signed the EPA with the EU, although it had qualified to access the latter market under the EBA initiative. Tanzania too, now having graduated to low middle-income country, will have to sign EPA with EU since it will no longer qualify to market access under EBA.
Even if the US Congress were to develop a new Generalized System of Preference for Sub -Saharan African countries, it would definitely lock out many African countries which are either classified as developing or middle income. This would still necessitate negotiation a free trade agreement. United States has stated that its free trade agreement with Kenya shall serve as model for future free trade agreement with other sub-Saharan Africa countries. So for the United States, it is not a matter if but when it will start requiring free trade agreement with certain sub-Saharan African countries, the way European Union has done.
As a member of the Africa Union, Kenya is fully committed to honouring and fulfilling its legal obligations include commitments to Africa Union Vision 2063 agenda and its attendants projects such as Africa continental free trade area, establishment of a Single African Air-Transport Market (SAATM), integrated high speed train network, silencing the guns, amongst others.
As a lower middle - income country, Kenya is fully aware that its access to markets of developed countries under the generalized system of preference will continue to diminish, thus leaving it susceptible to access those markets under the WTO agreed commitments, which often can be onerous.
As Kenya strives to realise its Vision 2030 economic blueprint, the conduct of export oriented trade and investment remains the only viable option to attain the desired socio -economic development. Asian tigers have done it using trade, and Kenya too should not falter in its quests to pursue its vision.
Mr Owuor is an Advocate of the High Court of Kenya.