Govt to re look strategies to improve access to US market under AGOA

Govt to re look strategies to improve access to US market under AGOA

The government is looking for new ways to make locally manufactured goods attract preferential market access to the United States of America.

This comes as trade between the two countries records sluggish growth.

Speaking in Washington during the 15th annual African Growth and Opportunity Act (AGOA) Forum, Foreign Affairs Cabinet Secretary Amb Amina Mohamed said the local manufacturing sector lacked capacity to meet international product standards and financing for trade.

These have held back manufactures looking to grow their exports to the U.S.

According to Amb Mohamed, the government and the private sector need to look for new strategies that allow for better market access.

“Our focus should be on implementation of national strategies that will enable Sub-Saharan countries optimize utilization of trade opportunities offered under AGOA,” Amb Mohamed said.

AGOA was enacted by the US congress in 2000 and covers over 6,400 products which are eligible for duty free and quota free market access into the US market.

However there has been concern of the growing trade imbalance with Kenya, as well as other sub Saharan African countries, importing more goods than what it sell to the US.

“The growth we have seen so far is only a glimpse of what is possible. This becomes clearer when we consider that the total share of Sub-Saharan exports to the US market was only 0.8 percent in 2015,” she said.

Between 2005 and 2015, the total trade between Kenya and the US increased from $ 1 billion (Sh9.9 billion) in 2005 to $ 1.5 billion (Sh14.8 billion) in 2015.

Kenya is United States’ fourth largest trading partner in Sub-Saharan Africa and the majority of Kenya’s exports to the United States are duty-free under AGOA.

Among the Kenyan goods accessible to the United States of America under AGOA include coffee, footwear, bags, insecticides, live poultry, potatoes, vegetables, fruits and tomatoes. Others are barley, boneless meat, rice, milk, beans and sunflower seeds.

However exports to the US have been limited to textiles, with the government calling for product diversification to boost income.

“That we must take this partnership to a higher, more stable, more predictable level is not the question. The question will always be what formula we use and how to make the relationship equitable,” Amb Mohamed said.

The 15th AGOA Forum convened under the theme, ‘Maximizing AGOA now to prepare for the future beyond AGOA’ provides a platform for consultations on bolstering US-Africa trade and investments.

Report by Hilda Wathithi

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