KENYA – The governments of Kenya and the United States launched free trade negotiations in early July to foster bilateral trade deals, on the argument that enhanced trade increases wealth and is therefore a win-win to both parties.
The International Dairy Foods Association (IDFA) is encouraging the Trump Administration to continue to pursue a trade agreement as it has the potential to provide tangible market access for U.S. food and agricultural exports to Kenya’s growing economy.
In a letter to U.S. Trade Representative Robert Lighthizer, IDFA said a U.S.-Kenya agreement also has the potential of cutting into the European Union’s dominance over dairy exports to Kenya and sub-Saharan Africa and achieve a level playing field free of barriers.
In 2019, the EU enjoyed 81% of the Kenya market compared to the U.S. share of less than 1%.
IDFA also voiced its concern for Kenya’s protectionist measures over its dairy sector as well as a host of non-tariff barriers to trade that would limit U.S. dairy’s competitiveness.
“First and foremost, IDFA commends the Administration for embarking on these precedent-setting negotiations, including negotiating objectives that are consistent with or exceed those of the United States-Mexico-Canada Agreement (USMCA).
“IDFA believes global competitiveness is key to the U.S. dairy industry’s continued growth and the United States must take a proactive approach in developing market access opportunities that allow U.S. products to compete on a level playing field,” stated IDFA.
Depending on the outcome of the negotiations, the trade agreement could be the most significant development in U.S-Africa trade relations since the African Growth and Opportunity Act (AGOA) passed Congress in 2000.
It is expected that this deal will form a model for other African countries upon the expiry of the AGOA in 2025.
Some of the priority areas highlighted by the nation’s dairy manufacturing and marketing industry representative include seeking ambitious tariff reductions, including for protected dairy products in Kenya, while seeking a simplified, trade facilitative entry of U.S. dairy imports into the country.
Currently, Kenya maintains its highest tariffs on a range of agricultural products, including dairy at an average of over 50 percent, because it considers dairy to be “sensitive” products and uses tariffs to stabilize domestic prices.
Also, IDFA is advocating for Sanitary and Phytosanitary (SPS) measures that align with USMCA commitments, and eliminates Kenya’s use of SPS measures to prevent the import of dairy products.
The SPS portion of Kenya’s “Dairy Industry Import and Export Regulations (2004, Revised 2012)” requires dairy imports into Kenya be physically tested for radioactivity and that the product has received not just one, but two pasteurization treatments, among many such requirements.
“It is imperative that U.S. negotiators ensure Kenya adopts SPS commitments that are consistent with the WTO and other, more recent agreements concluded by the United States,” indicates IDFA.
On matters of capacity building and regulatory reform has recommended the pursuant of good regulatory practices commitments with Kenya, such as those in USMCA and promoted in multilateral fora such as the Asia Pacific Economic Cooperation (APEC).
IDFA further encourages U.S. negotiators to undertake robust capacity-building efforts that focus on technical assistance for Kenya’s system of oversight, including regulatory reform, and the adoption and implementation of international guidelines, standards, and recommendations, such as those published by Codex Alimentarius.
The U.S. dairy industry, which supports more than 3 million jobs in the United States and pumps US$620 billion into the U.S. economy, relies on trade agreements to open new markets and increase exports.
After being a net importer of dairy products a decade ago, the United States now claims a dairy trade surplus of more than US$2 billion and sends American dairy products to more than 140 countries.
As U.S. milk production continues to increase over the next decade, new trade agreements will become even more vital to the industry and the American economy.
IDFA Vice President for Trade Policy and International Affairs Becky Rasdall said, “IDFA appreciates the Administration’s efforts to unlock new opportunities and regions for the U.S. dairy industry and we encourage U.S. negotiators to continue pursuit of an agreement with Kenya that liberalizes its markets, ensures comprehensive regulatory reform, and delivers gold-standard commitments.
“IDFA supports the Administration’s goal to reach an agreement with Kenya and urges negotiators to focus on U.S. dairy access throughout the process.”
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