International and Regional Trade Facilitation Seminar
The Kenya Flower Council attended a seminar organized by the Ministry of Foreign Affairs and International Trade and funded by Trade Mark East Africa. Three key issues were discussed:
- The World Trade Organization (WTO) basic principles,meaning and implications to business,
- the Economic Partnership Agreement (EPAs), and the
- Tripartite Free Trade Area Agreement (TFTA).
MAIN PRINCIPLES OF THE WTO; MEANING & IMPLICATION TO BUSINESS
• Most Favoured Nation (MFN) Treatment – all concessions realized through negotiations are multilaterized to the entire membership without discrimination.
– For Business this could translate to more market access opportunities or more competition.
• National Treatment – internal taxes and charges and regulations are applied equally on both imported and locally produced products without any variation.
– For Business this could mean a level playing field and more fair competition.
• Recognition of a tariff as a legitimate measure of protecting a domestic market and not a quantitative restriction or any other form of non-tariff measure.
-For Business this could translates to more sales and more business profits.
• Binding – All negotiated and reduced tariffs are bound in order to make global markets predictable. (Predictability & certainty).
– Business operators prefer predictability and certainty in markets for production planning.
– Predictability and Certainty promote investments .
• Transparency – All Members Trade Policies are Periodically Reviewed and new Trade Measures notified.
– When trade rules and regulations are clearly understood and readily available, they ease the cost of doing business & compliance.
On the EPAs, the meeting was informed that consensus had been reached regarding contentious issues at the EPA negotiations. It was noted that:
• The legal scrubbing of the agreed initialed EPA text has been completed.
• The legally scrubbed Agreement will be translated into 24 EU languages and Kiswahili.
• Ministers will sign the agreement thereafter.
• The signing is expected to be done during the first quarter of 2016.
On the status of the COMESA-EAC-SADC Tripartite Free Trade Area (TFTA) Agreement, the meeting was informed that the Agreement shall enter into force on the 30th day after the deposit of the 14th instrument of ratification by Member/Partner States of COMESA, EAC and SADC”. Negotiations were to be finalized by 2014 and tariff liberalization implemented within five (5) to eight (8) years.
Expected benefits Of the TFTA to Kenya include:
• Expanded market for Kenya manufactured products and services;
• Inflow of investment into the country and increased potential for Kenya’s investment in the region.
• Enhance Kenya’s exports into the region through harmonization of policies including the rules of origin, health and safety standards,
• Enhance trade facilitation which will substantially reduce the cost of doing business;
• Create momentum for regional infrastructure projects;
• Enhance production and competitiveness of Kenyan companies.
• Enhance industrial and infrastructure development;
• Create employment to the women and youth through increased trade and other economic activities;
• Enhance cooperation in customs and combating of unfair trade practices.
The region has a combined population of 527 million people which is more than 57% of total population of the African Union, a combined GDP of US$ 624 billion and a GDP per capita averaging US$1,184.
The meeting was informed that the World Trade Organization (WTO) will hold its annual meeting in Nairobi, Kenya in November 2015. This is the very first time the world trade body will be hosting the event in an African country.