More lobbies oppose Kenya, US trade talks
July. 07, 2020
Kenya's negotiations for a free trade deal with America has received opposition from organisations drawn from across Africa.
Business They argue the deal could stifle the growth of local industries and lead to dumping of cheap US imports in the region
Several trade lobby groups from Kenya, Nigeria, Uganda, Rwanda and Tanzania have written to the government, voicing their opposition to the proposed trade deal. They argue the deal will stifle the growth of local industries and lead to dumping of cheap US imports in the region. “The agreement portends the danger of crippling sectors such as agriculture and manufacturing and disintegrating of the Kenyan economy,” states the letter signed by the 27 lobby groups. They include the National Association of Nigerian Traders, Econews Africa, West African Institute for Trade and Agricultural Development, Kenya Human Rights Commission, Haki Madini Tanzania and the Centre for Trade Policy and Development. Other signatories include the South Sudan Human Rights Society for Advocacy, Third World Network Africa, Tax Justice Network Africa and ADIR Burundi. According to Edgar Odari, an official at Econews and one of the organisers of the petition, Kenya could face an influx of products produced cheaply through US government subsidies, pricing local producers out of the market. “Farmers in the US, for example, receive heavy stimulus from their government compared to small scale farmers in Kenya,” explained Odari. “The likely outcome is that the agreement will negatively impact food security, as the ability of local farmers to produce will be limited by stiff competition from subsidised products from the US market.” In February, Kenya and the US announced the two countries are seeking a free trade agreement (FTA) that will be used as a model for similar deals between America and other African countries. According to the Ministry of Industrialisation and Trade, the Kenya-US FTA will replace the Africa Growth and Opportunities Act (Agoa) which is set to expire in 2025. Agoa was signed by US President Bill Clinton as a 15-year trade pact allowing exporters from Africa and several other developing countries duty-free access to the US market. President Obama extended it to 2025 during his visit to Kenya in 2015. In the proposed objectives guiding the negotiations, Kenya says the new deal will be compatible with the World Trade Organisation framework. It respects commitments Kenya has made with trading blocs such as Comesa and the East Africa Community (EAC). “Any EAC partner States that did not participate in these negotiations at the outset and should be allowed to join, subject to terms and conditions already agreed or accede to the concluded free trade agreement (FTA),” states the document in part. The new petition follows criticism levelled against Kenya by her regional peers for going it alone despite active efforts to set up the African Continental Free Trade Area (AfCFTA). Amb Albert Muchanga, AU’s Commissioner for Trade, last year said AfCTA would be the preferred vehicle for a continent-wide trade deal with the US. “Fragmentation in Africa brings with it small economies, small markets, un-competitiveness and a host of other weaknesses which make African economies fail to grow at rates high enough to reduce poverty and overcome the underdevelopment trap they find themselves in,” Muchanga said at the Africa Business Summit in Chicago last year.
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