The United States is asking Kenya to publicly support Israel or forget about the free trade agreement

NAIROBI, Kenya – The United States wants Kenya to support Israel’s political and commercial interests or forget about a FTA with the world’s largest economy.

These are a set of conditions set out in the ongoing FTA negotiations between Nairobi and Washington.

The United States has stated in its objectives from The East African that the agreement with Kenya, in terms of commercial partnerships, should counteract actions that anticipate or discourage business between the United States and Israel.

Washington argues that the FTA should “counteract politically motivated actions to boycott, renounce and sanction Israel.”

The United States also wants “the removal of politically motivated, non-tariff barriers to Israeli goods, services or other trade imposed on Israel; and the elimination of state-subsidized, non-sanctioned foreign boycotts of Israel or compliance with the Arab League’s boycott of Israel.”

The inclusion of a third party, Israel, on the negotiating agenda, has seen lobby groups in Nairobi warn that the deal could be too risky for Kenya.

The United States has for decades been a strong supporter and defender of Israel on the global stage and in the unstable Middle East.

“The United States announced its negotiating position before all negotiations began. We are negotiating with transparency and openness, ”said Kyle McCarter, the US Ambassador to Kenya, when asked about Israel’s inclusion in the negotiations. “This is how we have treated the many other countries with which we have concluded successful free trade agreements for the benefit of both parties,” he added.

Political connotation

The East African Tax and Government Network (EATGN) and the East African Trade Network (EATN), the groups that have followed developments in the case, said Nairobi was “captured” in the Palestinian-Israeli conflict.

“Because of Kenya’s own special relationship with Israel and its pragmatic approach to dealing with issues such as tensions in the Middle East, the United States demands such political connotations in the USFTA that would undermine its reputation,” argued Leonard Wanyama, EATGN coordinator and vice president of international relations. Society of Kenya, a lobby for foreign policy experts in Nairobi told The EastAfrican.

The network and other groups had raised a petition that was against the negotiations, unless there is clarity about tax exemptions to avoid any loss of revenue for the government.

But the demand for the protection of Israeli interests means that Washington is pursuing the goal of ending all possible support for the Palestinian boycotts, divestments and sanctions (BDS) against Israel, a global initiative by various groups around the world that are friendly to Palestinian complaints. The groups often seek to get Israel to fulfill obligations under international law.

These include Israel’s withdrawal from the occupied territories; removing the separation barrier in the West Bank full equality for Arab-Palestinian citizens in Israel; and “respect, protect and promote the rights of Palestinian refugees to return to their homes and property,” according to a BDS committee bulletin.

Traditionally, Kenya has often recognized Israel, but rarely makes a public statement that supports one side or the other and supports the ultimate two-state solution for Palestine and Israel. It allows Palestine to set up a representative office in Nairobi.

This week, the tax network said Washington’s demands could put Nairobi in a difficult situation and urged officials to reject the call.

On Thursday, Johnson Weru, trade secretary for trade and industry, told The EastAfrican that political issues are not part of the agenda, but declined to discuss the issues they agreed on.

Controversial goals

Nairobi’s own published targets indicate that the agreement should be discussed within the framework of the EAC and the World Trade Organization’s rules. Kenya also wants an agreement that takes into account the “special and differentiated treatment that applies to Kenya as a developing country.”

Under WTO guidelines, developed countries provide certain preferential treatment to development partners such as duty-free market access without expecting reciprocal treatment.

Whether Kenya’s refusal to accept political talks is due to the petition filed earlier last month is not yet clear. But the United States has also included other controversial targets that the lobbies oppose.

For example, the United States insists that Kenya must not tax digital products such as e-books or music, and Nairobi must not include provisions that require U.S. companies operating to store data locally.

Under the WTO moratorium on e-commerce, customs duties must be levied on the “transmission” of these services and products, not the products themselves or their content.

The moratorium in 1998 has been challenged in situations where physical products have been digitized.

Peter Lunenborg, Senior Programs Officer for Trade and Development at Trade Policy Research Group, South Center, told The EastAfrican that it was not unusual for countries to include conditions like this in trade negotiations as long as they improve their market access.

“These are disciplines that are also in the USMCA (USA-Mexico-Canada Agreement), so there are no surprises there. In essence, these rules aim, among other things, to maintain the dominance of US-based e-commerce companies, ”he said, referring to the US agreement that entered into force in July last year.

Sir. Lunenborg said, however, that there have been concerns raised in the WTO by some members who argue that e-commerce needs to be structured to protect developing countries.

Since 2017, the Africa Group in the WTO has e.g. Argued that developing countries should look beyond the potential benefits of digital solutions and begin to assess the impact that the lack of digital and technological capabilities would have on cementing and expanding technology sharing.

A report on ” digital industrial policy and development ” by the Africa Group concluded that “a thorough assessment is needed, especially for developing countries, to assess the opportunities and threats that digital transformation will bring.

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