Association of Equipment Manufacturers submits industry priorities for U.S.-Kenya Trade Agreement
The Association of Equipment Manufacturers (AEM) submitted its industry’s priorities for the proposed United States-Republic of Kenya Trade Agreement. While equipment manufacturers continue to focus on addressing the immediate economic impacts caused by COVID-19, the association continues to stay focused on establishing future rules and regulations across the globe benefiting manufacturing and consumers alike.
Kenya, as the economic and transportation hub of East Africa, is a vital lynchpin in global trade, and it's a rapidly developing region. As consumers demand upgraded infrastructure systems, and producers invest in modern agricultural production, establishing a comprehensive trade agreement has the potential to boost not only U.S. equipment exports, but incentivize increased foreign direct investment throughout Kenya.
''Equipment manufacturers support 2.8 million jobs across all 50 states, representing 12% of all U.S. manufacturing jobs, and contribute $288 billion a year to the U.S. economy. With nearly 30 percent of equipment manufactured in the U.S. designated for export, our industry’s growth depends on export opportunities in emerging markets. A U.S. – Kenya Trade Agreement has the opportunity to not only increase U.S. exports of manufactured goods, but also become a model for future trade agreements across Africa and other emerging markets,'' read part of the letter.
Given Kenya’s status as East Africa’s commercial hub with the Port of Mombasa and soon to be completed Port of Lamu, trade facilitation is incredibly important to the economic growth of the country. The following recommendations will improve Kenya’s customs process and incentivize foreign direct investment in Kenya’s logistics industry:
Digital Documents and Electronic Signatures
The WTO Trade Facilitation Agreement allows for the digitization of customs documentation to expedite the movement of goods. Reducing the need for suppliers to print, sign, and scan back signed documents would simplify and streamline customs procedures. The U.S. Kenya Trade Agreement should include language that allows for the digitization of documents and electronic signatures to reduce costs and customs delays.
Any finalized agreement must contain provisions for transparency in import licensing and export licensing procedures. There should be a prohibition on export duties, taxes, and other charges associated with specific customs processing fees. As well as prohibiting either party from requiring the use of local distributors for the importation of commercial goods, or requiring consular transactions and their associated fees and charges.
Kenya should update their HTS tariff codes to better align with the U.S. Eliminating the chances of goods having different, binding tariff codes would prevent confusion on customs forms. A consistent classification system will improve the flow of goods at Kenya’s ports of entry and prevent unnecessary customs delays from occurring.
Allow for Trans-Shipment of Goods
A U.S. – Kenya Trade Agreement should allow for trans-shipments, preferably with the same or similar language used in the U.S.-Chile Free Trade Agreement, where goods are still eligible if they leave customs control provided that they do not undergo further processing.
AEM looks forward to working with both the U.S. and Kenyan governments on the agreement.