February 10, 2020 8:47AM

A Better Trade Arrangement with Kenya?

The trade specialty publication Inside US Trade reports that the Trump administration is looking to convert the current tariff preferences offered to imports from Kenya into a bilateral trade deal:

The U.S and Kenya have agreed to begin negotiations toward a free trade agreement, the Trump administration and Kenyan President Uhuru Kenyatta announced on Thursday.

[U.S. Trade Representative Robert] Lighthizer has said the U.S. was seeking a “model” trade agreement with an African country that will become a template for other deals and, eventually, replace the African Growth and Opportunity Act, which is set to expire in 2025.

If they can pull this off with a truly liberalizing trade deal, I think this is a good idea. Unilateral tariff preference programs such as the Generalized System of Preferences (GSP) and the African Growth and Opportunity Act are full of problems. My former trade policy colleague Sallie James had this to say about them back in 2010:

It is clear that the GSP is in need of reform. Product exclusions; anti‐​competitive limits on imports that are triggered just when an exporter becomes successful; outdated eligibility criteria; and complex administrative and customs requirements all serve to limit the usefulness of the program to the ostensible beneficiaries and to U.S. consumers.

My concern here is that, so far, the template used by the Trump administration for trade deals is a pretty bad one. The USMCA is kind of a mess. But if a U.S.-Kenya trade agreement focuses on tariff reduction and the liberalization of services, has an enforceable dispute mechanism, and has no sunset clause like the one in the USMCA, it could be a good model for future U.S. trade agreements, with other African countries and with the rest of the world.