US Extends AGOA Trade Deal for One Year, President Ruto Announces
US Presidenst Trump (left) and President William Ruto of Kenya
The extension of the African Growth and Opportunity Act (AGOA) by the United States government to last another year is a reason to celebrate by thousands of Kenyans who work in the textile and garment industries. The extension guarantees that Kenya and other Sub Saharan Africa member countries will still enjoy duty free access to the huge American market.
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AGOA, which was initially signed into law in 2000, is a historic trade agreement under which thousands of products such as textiles, apparel, coffee, and horticultural goods obtain preferential US market access by 32 African countries. The program has played a critical role in the economy of Kenya as it not only stimulates exports and attracts investment in Kenya but also creates jobs in the manufacturing sector.
The extension was confirmed by President William Ruto on Saturday, October 4 in a public speech in Vihiga County. In his speech at the Nyang’ori PAG Church Centenary celebrations, he said that the one-year extension had been sanctioned by the administration of former US President Donald Trump after recent high-level discussions in Washington.
You recalled that when I was in the United States I had discussions with the government of President Trump. Because of those negotiations, we have an extension of the AGOA deal to a year more, Ruto told the crowd. This implies that Kenyan exporters will still have the benefit of duty-free access to the American market, and thousands of our citizens will retain their jobs and our factories will stay in operation.
The President pointed out that his visit to the United States last month played a key role in winning the extension, something that is welcome to most Kenyan workers and investors. The AGOA system that expired on September 30 after a period of 25 years in operation raised doubts among the exporters and industry players in Kenya on the future of Kenya-US trade relations.
According to Ruto the one year reprieve will give Kenya a chance to move towards more lasting trade agreement with the United States. He also disclosed that his government is already in a process of negotiating a bilateral trade agreement to offer Kenyan products more stability and access to the long time market.
“We have initiated negotiations with the US to have a bilateral trade agreement that will give predictability to our exporters and will guarantee that we can enjoy the American market in a sustainable way,” he said. Such an agreement will enable us to increase our exports of coffee, tea, horticulture, textile and apparel.
The Head of State pointed out that bilateral agreement would not only safeguard Kenya against uncertainties associated with temporary trade arrangements, but it would also assist in consolidating the manufacturing foundation and the general economic development of the country.
Kenya has a lot of opportunities in the American market. “We will keep on boosting our economy and generating more employment opportunities and increasing foreign exchange earnings through a long-term trade cooperation,” Ruto reiterated.
AGOA has been a huge gain to the Kenya economy, particularly the export-led textile and apparel industry which directly employs more than 50000 people and indirectly thousands of others. Stakeholders in the industry have attributed AGOA to have revived the Export Processing Zones (EPZs) and promote foreign investment in the manufacturing sector in Kenya.
Since its emergence, AGOA has been very essential in changing the face of exports in Kenya. The export of apparel in the United States has improved significantly, hence adding a considerable amount to the national income and making Kenya one of the leading beneficiaries to the trade initiative in Africa.
The announcement made by President Ruto is an indicator of a new promise to enhance trade relations between Kenya and the US and a continuity of a key economic lifeline. The one-year extension is just a relief but the drive by the government to enter into a bilateral trade agreement is a strategic move to the long term economic sustainability and resilience.
The AGOA extension is now a certainty and Kenyan firms and employees in the textile and manufacturing sectors can now have hope of a year more duty free exports and economic security as the government seeks a more permanent trade model with the United States.
