Kenya’s manufacturers laud efforts to enhance intra-Africa trade

Kenya’s manufacturers have praised efforts being made by the government to secure additional market, enhance intra-African trade and boost the country’s exports through regional trade blocks.

The Kenya Association of Manufacturers (KAM), which organised a forum in Nairobi to review the progress on the Tripartite Free Trade Area (TFTA) negotiations and its impact on business, lauded the ministry of foreign affairs for engaging the private sector in the talks. KAM Executive Officer in charge of Trade Policy, Walter Kamau said delays in agreeing on the tariff liberalization modalities due to reluctance of some membersStates, inadequate finance to support the negotiation process, lack of consistency in participation of experts in the negotiations and inflexibility at the technical level to establish the TFTA expeditiously as directed by the summit have hampered negotiations. “A preferential or free trade area should have transparent, simple to implement rules that promote trade and guide against trade deflection,” Kamau told the forum late on Monday. “Strict Rules of Origin (RoO) reduce the effectiveness of free trade agreement they apply to, he said,” he added, noting that the specific rules will be circulated to KAM sectors for comments in the coming week.

The establishment of the TFTA that was anticipated to happen in 2015 will constitute 26 countries of the 3 regional trade blocks: East African Community (EAC), Common Market of East and Southern Africa (COMESA) and Southern Africa Development Community (SADC) including Southern Africa Customs Union (SACU). The rules are expected to be simpler and easier to implement than the existing rules of origin for EAC, COMESA and SADC. The RoO set conditions that products should meet in order to be considered eligible for preferential treatment. TFTA will be one of the largest free trade areas in the world with over 600 million people and presents a huge market for investors and traders.The region has a combined GDP of 624 billion U.S. dollars, a GDP per capital averaging 1,184 dollars and makes up half of the African Union (AU) in terms of membership and just over 58 percent in terms of contribution to GDP and 57 percent of the total population of the African Union.

According to Joseah Rotich of the ministry of foreign affairs, the pace of the tripartite negotiation process was hampered during the preparatory period by a number of factors that has lead to the process lagging behind schedule.”For instance there have been delays in submission of trade data and information required from the member states concerned. Negotiations on the interpretation and application of the negotiation principles adopted by the summit have also been lengthy,” Rotich said. The tripartite summit has directed that free movement of business persons will be negotiated in parallel with trade in goods but in a separate track. The negotiations in each thematic area are at different levels of completion.

If properly implemented, the TFTA will have several benefits including the establishment of a larger market with a single economic space that will be more attractive to investment and large scale production; and promotion of small and medium scale enterprises that produce goods and services.The TFTA will also address the current challenges resulting from multiple memberships through harmonization and coordination of the Regional Economic Communities (RECs) policies, programmes and activities.The Roadmap for the TFTA will be implemented in two phases: The First Phase was agreed to last for up to 36 months starting from June 2011 till June 2014. This phase was to cover negotiations in trade in goods. The Second Phase covering negotiations on trade in services and trade related issues will commence after the completion of Phase I.

Source: Kasonline