As the clock ticks down to the expiration of the African Growth and Opportunity Act (Agoa) in September, Kenya stands at a pivotal crossroads in its trade relationship with the United States. Established in 2000, Agoa has been instrumental in fostering trade between the US and sub-Saharan African countries, allowing eligible nations like Kenya to export goods duty-free. For Kenya, this has been particularly beneficial to its apparel sector, which boasts approximately $500 million (Sh64 billion) in annual exports. However, with the potential shifts in US trade policy under President Trump’s ‘America First’ doctrine, the future of this vital trade framework is uncertain.

Under the Trump administration, a principle of ‘Reciprocity’ has been prioritised, often resulting in a more protectionist trade stance aimed at safeguarding American interests. With the US Congress currently deliberating on extending Agoa for another 16 years, there is a palpable tension between maintaining the status quo and forging new bilateral trade agreements. Given Trump’s inclination towards direct trade engagements, there is a distinct possibility that Agoa may be supplanted by Free Trade Agreements (FTAs) predicated on reciprocal trading relationships.

For Kenya, the implications of such a transition are profound. The apparel industry, a cornerstone of the nation’s export economy, supports around 50,000 jobs, predominantly in areas requiring low-tech skills and offering low wages. Yet, Kenya’s performance under Agoa reveals untapped potential. Despite leading many African countries in exports to the US, Kenya has utilized less than six of the 6,000 tariff lines available under Agoa. This underutilisation is largely due to the heavy reliance on imported fabrics from China for apparel manufacturing. Consequently, while Kenya excels in exporting finished garments, it remains dependent on external sources for raw materials.

The ongoing trade war between the US and China further complicates matters. US tariffs target Chinese products, including textiles, a primary source for many African nations. Should US manufacturers seek to diversify their supply chains, they may require multiple transformations of textile production, from cotton to ginning and fabric to apparel. However, many Kenyan Export Processing Zones (EPZs) companies currently handle only one transformation – stitching. This limits Kenya's ability to integrate into a more resilient and diversified supply chain, further complicating its export dynamics.

Moreover, while Agoa was initially perceived as a favourable deal for Africa, it has often served as a strategic tool for the US to advance its own economic interests. The US has utilized this framework to export second-hand garments, chicken feet, and chicken drumsticks to African markets, thereby impeding the growth of local industries and perpetuating dependency. President Biden’s Strategic Trade and Investment Programme (STIP) has further entrenched this reliance by prioritising the chicken value chain.

As African nations navigate these complex trade waters, they risk becoming consumers of second-hand clothes and poultry imports, rather than thriving producers and exporters. This extractive approach can have significant implications for nations that challenge the status quo. For instance, South Africa faced expulsion from Agoa benefits for refusing imports of US chicken drumsticks, while Rwanda was removed from the programme for rejecting second-hand clothing imports. These instances underscore that Agoa, despite its promotional rhetoric, is as much about advancing U.S. economic interests as it is about fostering development in Africa.

The trade war dynamics also create significant uncertainty for African economies. Escalating tariffs and trade barriers could isolate African markets from American consumers who are increasingly price-sensitive. Kenyan exports could struggle in a market already grappling with international demand complexities. As the expiration of Agoa approaches, Kenya’s economic future hangs in the balance. The interplay between US trade policies, domestic priorities, and international relationships will shape the contours of this journey.

Kenyan policymakers must proactively engage with US stakeholders to articulate the mutual benefits of continuing with Agoa, positioning Kenya as a prosperous partner in America’s trade ecosystem, not as a competitor. The choices made today will determine whether the apparel industry thrives or merely survives, shaping the broader narrative for sustainable economic growth across the African continent. The time to act is now.