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Kenya - Country Commercial GuideThe World Trade Organization (WTO) is the primary international organization dealing with 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 took place in March 2019.
Kenya was among nearly 55 African nations that 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 the continent creates a single market of 1.3 billion people, with a combined gross domestic product of more than $3.4 trillion. (World Bank).
The United States signed a Trade and Investment Framework Agreement (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 283.7 million across the countries of Burundi, Kenya, Rwanda, South Sudan, Congo, Uganda, 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 signed a Protocol to establish a common Customs Union.
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.
Under the Act, Kenya qualifies for duty free access to the U.S. market. Kenyan apparel and agricultural exports are the main qualifying beneficiaries of AGOA.
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 markets, 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..
Kenya has signed bilateral trade agreements with many countries: Argentina, Bangladesh, Bulgaria, China, Comoros, Democratic Republic of 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.
In December 2023, Kenya and the EU signed an Economic Partnership Agreement (EPA) to boost bilateral trade in goods and increase investment flows. The partnership will come into effect once ratified by each party’s parliament.
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. In July 2022, the two governments announced their intention to negotiate a Strategic Trade and Investment Partnership (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. Negotiators hope to conclude the STIP negotiations by the end of 2024.
In April 2023, the Kenyan Ministry of Trade, Investment, and Industry, the American Chamber of Commerce, and the U.S. Embassy signed a trilateral Memorandum of Understanding, formalizing a mechanism for investment dialogue and improving the business environment.
