In Kenya, thousands fear job cuts as US-Africa AGOA trade deal expires

After 25 years, the African Growth and Opportunity Act (AGOA) has officially expired on Tuesday, leaving the future of trade between the United States and Africa in uncertainty. 

The multilateral agreement has given thousands of products from African nations duty-free access to US markets since it was introduced in 2000. 

In Kenya, it has allowed the country’s textile and apparel sector — makers of jeans, for instance — to effectively compete with Asian exporters such as in Bangladesh and Vietnam.

"Clearly if AGOA goes away we have zero chance to compete with the Asian countries. There is no way we can survive," said Pankaj Bedi, the CEO of the United Aryan clothing factory in Kenya.

Textile and apparel exports from Kenya to the US have grown from about $50 million when AGOA was first introduced to around $500 million today.

"I am very convinced as a sector chair and as a businessman, it is not going to be a survival for us. The whole house of cards will collapse very quickly," said Bedi, who also acts as chair of the Apparels Manufacturers and Exporters at the Kenya Association of Manufacturers.

In Kenya, more than 66,000 people, many of them women, were employed through now-vulnerable textile and apparel exporters to the U.S.

In the garment districts of Nairobi, job cuts and fears over livelihoods have already begun.

"For all those years this has been my bread and butter. I only depend on this job. So if it is gone, it means my life is gone too," said machinist Julia Shigadi.

AGOA had also given African countries hope that major elements of their export economies would be exempt from blanket tariffs of 10% — and in some cases much higher — announced by the US earlier this year.

At the United Nations General Assembly last week, Kenyan president WIlliam Ruto said he was seeking a five-year extension of AGOA. A White House official said on Monday that the Trump administration supported a one-year renewal of the deal.

Experts say several African economies are likely to face the adverse effects of both AGOA’s end and Donald Trump’s new tariffs. 

"In the short run, it looks manageable but in the long run, the challenges are going to be devastating and they are going to spill over," said Raphael Obonyo a public policy expert at UN Habitat.