Kenya, China Agree on Deal Allowing Duty-Free Access for Kenyan Products

Kenya is set to enjoy key trade benefits with China after the Asian nation agreed to negotiations allowing Kenyan goods to enter its market without tariffs, amid U.S.-imposed trade barriers affecting local exports.

Trade CS Lee Kinyanjui announced on Thursday that, following a recent bilateral trade engagement with China, Kenya will now export 98.2 per cent of Kenyan products to enter the Chinese market duty-free, meaning they will not incur import taxes or tariffs that normally increase costs and reduce competitiveness.

China’s broader duty-free and quota-free policy for African goods primarily benefits Least Developed Countries, leaving developing nations like Kenya initially excluded. To address this, Kenya initiated talks to secure a trade arrangement that provides comparable privileges.

The early harvest framework is expected to diversify Kenya’s export basket, with particular emphasis on agricultural products, which form the backbone of the country’s economy.

"We are pleased to share that these engagements have resulted in a preliminary agreement that allows for 98.2 per cent zero-duty market access for Kenyan goods. The introduction of zero-duty access will unlock vast economic potential for Kenyan exporters, allowing for diversification of our export basket, especially in the agricultural sector, which is the mainstay of our economy," Kinyanjui said.

The CS indicated that the zero-duty access could increase profits for Kenyan exporters, expand market reach, and create employment opportunities across multiple sectors.

The agreement comes as the United States has imposed tariffs on a number of countries, including Kenya, with a 10 per cent baseline tariff on all of Kenya's exports,making China an attractive alternative market for exporters seeking lower costsand more predictable trade terms.

Meanwhile, the developments come just days after the United States House of Representatives voted to extend the African Growth and Opportunity Act (AGOA) trade pact, whose future had been hanging in limbo until 2028.

The House approved the extension on Monday, January 12, after 340 House representatives voted in favour of the extension, against 54 who voted against.

Following the approval, the bill willnow proceed to the U.S Senate before being signed into law, effectively extending the act that aims to provide duty-free access to the U.S. market for eligible African countries and products.

The AGOA agreement was established in 2000 and was set to expire in September 2025, prompting Kenyan authorities and President William Ruto to champion its extension on behalf of the regional peers to facilitate the development of more trade deals between Africa and the United States.

Welcoming the extension, the Foreign Affairs Principal Secretary, Korir Sing'Oei, said the adoption of the AGOA reauthorisation bill was a welcome move for US-Africa trade, commending President Ruto for being at the forefront in calling for the extension. He also said he was looking forward to the Senate's passing of the bill.