The US government is pushing Kenya to smoothen the licensing regime for American professionals seeking to set up shop in the country as part of ongoing negotiations for a proposed bilateral trade deal.
The US negotiators want Kenya to improve transparency and fairness of processes for licensing American professionals such as accountants, lawyers, engineers and architects to provide services. Washington argues difficulties in getting permits in a foreign jurisdiction like Kenya could be a barrier to small firms seeking to export services.
The clause aimed at growing trade in services is part of the text tabled by the Biden administration during the first negotiating round of the proposed US-Kenya Strategic Trade and Investment Partnership (STIP) in Nairobi between April 17 and 20.
“The aim of the proposed text is to ensure that service suppliers are treated fairly and in a transparent manner when they apply for permission to operate in a given sector and that there is a smooth flow of information between the applicant for a license and the regulator,” the US Trade Representative Katherine Tai’s Office wrote in the summary of its proposals released Tuesday night.
“At the same time, the proposed text does not interfere with the ability of regulators to apply domestic standards to protect important interests such as safety, health, and the environment, or to ensure worker and consumer welfare.”
The US proposal to Kenya is in line with the World Trade Organisation’s Joint Statement Initiative on Services Domestic Regulation which was signed by 70 countries in December 2021.
The outcome of WTO’s initiative on trade in services, whose development started in 2017, was largely supported by developed economies, with Nigeria being the notable sub-Saharan African country to have endorsed it.
The WTO initiative applies to licensing requirements and procedures, qualification requirements and procedures, as well as technical standards affecting trade in services. Developing economies that adopt the disciplines under the negotiated pact have a window of seven years to delay the application of specific provisions in sectors in which they face implementation difficulties.
The transitional period is aimed at allowing countries like Kenya to make adjustments to their domestic regulatory frameworks.
The US team is proposing that Kenyan regulators provide American professionals seeking to export services “a fair opportunity to demonstrate that they meet” the licensing rules and that they “decide on whether to issue a license in a reasonable period of time”.
“The proposed text encourages regulators to continue experimenting with new technologies [online application and approval] to make the application process easier, especially with an eye to reducing unnecessary administrative burdens on small and medium-sized businesses,” the summary of US proposals to Kenya reads.
“The proposed text goes beyond the existing WTO rules by applying these high standards to all sectors in which foreign service suppliers are permitted to operate, rather than limiting the obligations to an arbitrary set of sectors covered by formal WTO commitments that become outdated and may not reflect the reality of the marketplace.”
The US negotiating team is led by Assistant US Trade Representative for Africa Constance Hamilton, while Kenya’s side is led by Trade Principal Secretary Alfred K’Ombudo. The ongoing negotiations are a build-up to the bilateral agreement whose terms Kenya and the US started stitching together just weeks before the end of former President Uhuru Kenyatta’s term in office
Kenya has long sought a full free trade agreement with the US to replace the two-decade-old Africa Growth and Opportunity Act (Agoa), but progress has been dragged by regime change in both countries.
The discussions for the proposed bilateral deal started in earnest in August 2018 when former President Uhuru Kenyatta made a bilateral visit to the White House.
The former presidents of the respective countries—Kenyatta and Donald Trump —at the time identified economic development and trade as the pillar of the “strategic relationship” between Kenya and the US.
