Multilateral Trade System (MTS)
The World Trade Organization (WTO) is the primary international organization dealing with the global rules of trade between nations. Kenya has been a member of the WTO since its inception in January 1995. The WTO’s 10th Ministerial Conference was held in Nairobi, Kenya in December 2015. The Conference culminated in the adoption of the “Nairobi Package”, a series of six ministerial decisions on agriculture, cotton, and issues related to least-developed countries (LDCs). The latest EAC Trade Policy Review by WTO was scheduled for March 2019.
African Continental Free Trade Area (AfCFTA)
Kenya was among nearly 50 African nations signed a deal to create the AfCFTA in Kigali, Rwanda, on March 21, 2018, marking a historic milestone in the economic integration of the continent. The formation of a free trade area spanning Africa creates a single market of 1.2bn people with a combined gross domestic product of more than $2 trillion (UNCTAD).
U.S. – EAC Trade and Investment Framework Agreement (TIFA): The United States signed Trade and Investment Framework Agreements (TIFA) with the EAC in 2008, and with COMESA in 2001. Kenya is a member of both regional organizations. The Office of the U.S. Trade Representative’s (USTR) Africa Office is also leading U.S. efforts to forge a new trade and investment partnership with the East African Community.
Kenya is a member of the EAC with a population of approximately 177 million across the countries of Burundi, Kenya, Rwanda, South Sudan and Tanzania. It is also a member of COMESA at https://www.comesa.int/ with a population of approximately 540 million. Exports and imports within member countries enjoy preferential tariff rates. EAC Member States have signed a Protocol to establish a common Customs Union.
ACP/Cotonou Partnership Agreement
Exports from Kenya entering the European Union are entitled to duty reductions and freedom from all quota restrictions. Trade preferences include duty-free entry of all industrial products as well as a wide range of agricultural products including beef, fish, dairy products, cereals, fresh and processed fruits, and vegetables. Additional information is available at African, Caribbean, and Pacific Group of States (http://www.acp.int/).
African Growth and Opportunity Act (AGOA)
Kenya qualifies for duty free access until 2025 to the U.S. market under the African Growth and Opportunity Act. Some of Kenya’s major products that qualify for export under AGOA include textiles, apparels, and handicrafts.
Generalized System of Preferences (GSP)
Under the Generalized System of Preferences, a wide range of Kenya’s manufactured products are entitled to preferential duty treatment in the Australia, Austria, Canada, Finland, Japan, New Zealand, Norway, Sweden, Switzerland, other European countries, and the United States. In addition, no quantitative restrictions are applicable to Kenyan exports on any of the 3,000-plus items currently eligible for GSP treatment. Additional information is available at United Nations Conference on Trade and Development.
Bilateral Trade Agreements
Kenya has signed bilateral trade agreements with many countries: Argentina, Bangladesh, Bulgaria, China, Comoros, Congo (DRC), Djibouti, Egypt, Hungary, India, Iraq, Lesotho, Liberia, Netherlands, Nigeria, Pakistan, Poland, Romania, Russia, Rwanda, Somalia, South Korea, Swaziland, Tanzania, Thailand, Zambia, and Zimbabwe.
U.S - Kenya Trade Engagements
In July 2020, the United States and Kenya entered negotiations to seek a high standard agreement that will also complement regional integration efforts within the EAC and AfCFTA. Then in July 2022, the governments announced the STIP. Under STIP, the governments will pursue enhanced engagements to craft high standard commitments in a wide range of areas with a view to increasing investment; promoting sustainable and inclusive economic growth; benefiting workers, consumers, and businesses (including micro-, small-, and medium-sized enterprises); and supporting African regional economic integration. Additionally, the United States and Kenya agreed on a Strategic Cooperation Framework to provide technical assistance and trade capacity building in Kenya with the aim of maximizing Kenya’s utilization of the AGOA trade benefits for the remaining years of the preference program, which is scheduled to expire in 2025. The Framework will also support the development and competitiveness of key agricultural value chains in Kenya. (https://ustr.gov/)
U.S.- Kenya Commercial Memorandum of Understanding (MoU)
The United States and Kenya also intend to intensify efforts to bolster commercial cooperation under the bilateral commercial Memorandum of Understanding signed in June 2018, and to work together to identify and prioritize trade and investment opportunities in strategic sectors including energy, health, digital economy, infrastructure, manufacturing, and agriculture.