Kenyans worry a US duty-free trade deal might end and expose them to Trump’s tariffs

NAIROBI Kenya AP It s crunch time for the maker of Levi s and Wrangler jeans in Kenya s capital Nairobi Hundreds of sewing machines whir in a crowded air-conditioned factory On another floor workers pack clothes destined for the U S sphere The fate of about workers in the factory at the United Aryan export processing zone hangs in the balance In September a duty-free transaction agreement between Kenya and the United States could expire under the African Increase and Opportunity Act or AGOA The factory s founder Pankaj Bedi mentioned manufacturers would be unable to compete well in the U S arena if the AGOA agreement is not renewed due to the complicated business context in sub-Saharan Africa Without AGOA meant to benefit African nations that meet certain U S expectations in areas including governance and human rights countless Kenyan goods would no longer have duty-free access to the U S realm And they would be exposed to the uncertainty of the Trump administration s global tariff campaign It s a concern across the continent South African President Cyril Ramaphosa speaking to journalists after his Oval Office meeting with President Donald Trump noted that AGOA is going to be further discussed it is top of mind for them as well in the U S administration Bedi noted his business has benefited from years of the AGOA agreement but will not survive if the deal is not extended again This time around we are hoping that President Trump will pass it for a longer period then a long-term strategy can come in play he mentioned The longest extension has been for a decade In making his pitch Bedi announced he believes that Africa offers the perfect alternative sourcing to Asia with its large and youthful workforce Seventy percent of people in sub-Saharan Africa are under according to the United Nations I think the real shift of supply chain will happen and Africa is the last frontier We cannot go to the moon and start manufacturing there Bedi commented Kenya s administration would not comment on the deal or why it might be under threat Economist Wangari Muikia commented the new U S tariffs reflect a shift towards reviving American manufacturing consistent with Trump s priority to re-shore jobs but warned that ending AGOA may strain diplomatic ties and weaken American soft power African governments have promoted AGOA as a major job creation avenue In Kenya AGOA has led to the creation of jobs since the activity began in according to leadership statistics published in Kenya s overall unemployment rate is but the rate among those under is part of a wider issue for much of Africa s booming young population In Kenya s total exports under AGOA including agricultural products apparel and handicrafts were worth million according to the U S Department of Commerce United Aryan stated it exports an average of million jeans annually from Kenya to the U S But selected African governments and leaders have objected to AGOA s conditions Ugandan President Yoweri Museveni criticized the plan after it was used in to pressure him on his stance on homosexuality Kenya s former ambassador to the U N Martin Kimani disclosed in an interview with The Associated Press that he believes AGOA s unpredictability has not been good for the market The real measure of a business regime is its predictability and its integration into long-term production he stated The tariffs and the effort s upcoming expiration signal that AGOA is not a stable foundation for African industrial rise If Kenya s AGOA deal isn t extended the country will need to look for alternative markets like the African Continental Free Exchange Area to ensure jobs are not lost and manufacturers keep exporting goods disclosed economist James Shikwati founder and director of The Inter Region Economic Setup The continental free contract area has shortcomings that include underdeveloped infrastructure that makes it expensive to transit goods mistrust that makes it hard for specific countries to be fully open to trading with neighbors and a lack of strong institutions that can mediate arrangement disputes Judging by the Trump administration s fresh trade-related policies every agreement partner will need to reevaluate its engagement with the U S Shikwati added For those whose jobs could be affected there is concern United Aryan employee Valdes Samora hopes to keep the sewing machines humming and that livelihoods will not be lost after September The -year-old father of nine has been working at the company for two decades His wife also works there Workers are paid an average of per month in a country where the minimum wage is I never completed my training but through this work I have been able to educate my children he disclosed Source