East African Community countries have presented a list of issues they hope the United States government will address to expand its trade partnership with the region.

Trade ministers from the five EAC partner states have made a formal request to the US government asking it to relax the stringent measures imposed on their agricultural exports to the US and also review the high tariffs on some agricultural products such as sugar and cotton.

They are in fact seeking removal of tariffs on all agricultural exports from East Africa as well as creation of more quotas, which they say would be consistent with US obligations under the UN Millennium Development Goals and would fulfil a key demand from these countries in the World Trade Organisation.

The economic and international trade officer in Kenya’s Ministry of Foreign Affairs, James Kiiru, said that the EAC also expects US President Barack Obama, who is visiting Kenya this week for the Global Entrepreneurship Summit, to address issues raised earlier “to pave the way for us to utilise the quota-free US market under the Africa Growth and Opportunity Act (Agoa).

“Of priority are the stringent measures imposed by the US on agriculture exports, especially the sanitary and phytosanitary measures that raise the cost of exports enough to offset any additional competitiveness gained through lower tariffs,” said Mr Kiiru.

The US has imposed stringent SPS measures for agricultural products such as fresh produce and beef, and the majority of East African producers are often unable to meet the standards.

“This has made it hard for the East African countries to lobby for even more products to be added on the Agoa list, since it takes a much longer time for approval,” Mr Kiiru added.

The East African states are also pushing for a prior renewal of another 10-year term that was last month reauthorised for renewal for 10 years by the US House of Congress. The Agoa pact will be renewed in October, immediately after the current agreement expires at the end of September.

READ: US Congress votes to extend Agoa by 10 years

President Obama, who will attend the Global Entrepreneurs Summit in Nairobi, is likely to address the trade partnership between the EAC and the US.

Earlier this month, the US Department of State said it was reviewing Burundi’s eligibility for the trade preferences available to it under the Agoa.

“We will be taking into consideration ongoing violence and instability and the government of Burundi’s lack of respect for the rule of law in determining their eligibility for these trade preferences moving forward,” said the US State Department statement.

Trade among the EAC countries and the US amounted to $2.8 billion in 2014: US exports to the EAC reached $2 billion while American imports from the region, which rose by 52 per cent from 2013, totalled $743 million.

The main exports of agricultural products to the US are cocoa paste and powder, citrus fruits, edible nuts, wine, unmanufactured tobacco, horticultural products and vegetables.

Most agricultural exports from sub-Saharan Africa already enter the US tariff-free. There are, however, a number of products where the US retains high tariffs, such as sugar and cotton, which, if reduced, would stimulate further trade. Except for imports of sugar and cotton, imports under Agoa that are in-quota enter the US at zero tariffs.

The US retains various trade barriers on a range of agriculture goods that, if reduced, would be likely to lead to increased exports.

Sugar, meat, dairy, vegetables, processed fruit and other processed goods such as dried garlic, apricots, shea butter, yoghurt, ghee, cashew nuts, sugarcane products, sugar-containing cocoa products, oil seeds, shrimp and prawns, bananas and other vegetables and fruit such as mangoes are products facing trade barriers in accessing the US markets.

“The US should also look to where it can streamline its import procedures, reducing costs and delays to market,” said Mr Kiiru.

The renewal and extension of the Agoa period is expected to give African countries ample time to build competitive capacity in the global market. It accords preferential market access system to 39 countries in sub-Saharan Africa, including all the East African countries, to develop their economies and create free markets.

Peter Njoroge, director of economics at Kenya’s Ministry of EAC Affairs, Commerce and Tourism, says that the East African countries have not been able to fully utilise the US quota-free market under Agoa because the agreement does not comply with the WTO’s framework for free trade agreements and has been relying on a 10-year conditional special exemption window that expires in September.

READ: 10-year extension but new Bill unlikely to make Agoa successful

“Agoa is a short-lived initiative yet investments under Agoa need to be long-term, which does not attract investors,” said Mr Njoroge. “EAC partner states will lobby the US government to give Agoa a long-term lifespan so as to give investors predictability.”

He added that the five EAC countries are expected to push for a prior renewal of another 10-year term. Although the Act provides for about 6,000 products, Kenya has only been exporting textiles and apparel.

READ: Region to export products under Agoa as a bloc

Unlike the EU market, Mr Njoroge said, transportation costs to the US market are high, caused by lack of direct flights and sea transport from the EAC countries to the US, affecting export of products such as cut flowers to the US.

“It is expected that Kenya will soon have direct flights to the US that will also be of benefit to the other EAC partners,” noted Mr Njoroge, adding that the provision on rules of origin has been proposed for revision under the Agoa reauthorisation.

Stringent rules of origin

Agoa rules of origin are based on those in the US GSP programme. To be eligible for Agoa benefits, products must be grown, produced or manufactured in one or more of the beneficiary countries and exported directly from an Agoa beneficiary country to the US.

“With these conditions, most of the products from eligible countries cannot access the US market,” said Mr Njoroge. “Moreover, unless ‘wholly obtained’ from a single Agoa country, goods are subject to a 35 per cent value-content rule.”

According to industry sources, in some sub-Saharan African countries, activities such as tuna processing have difficulty achieving the threshold and cannot therefore be exported to the US duty-free under Agoa.

The restrictive rules of origin also do not reflect the current market reality, given that African textile mills cannot in general produce yarns or fabric in sufficient variety and quantity to meet the needs of African apparel producers or the requirements of retailers in developed countries.

Despite the challenges and the high expectations by the EAC states from President Obama’s visit, efforts are under way to ensure that they fully exploit the US market as a region. They are working on a joint sustainable strategy to exploit the US preferential trade market.