The Standard, April 29, 2009
Poor countries, including Kenya, would get financial support to develop and diversify exports when the on-going trade negotiations under the World Trade Organisation (WTO) are concluded.
WTO members have committed themselves to help Least Developed Country members (LDCs) to address their supply side capacity constraints once the Doha Round is concluded.
The members would also be assisted to address challenges that will occur due to increased competition as tariff rate used to protect their economies drop.
“These measures shall be designed to enable such members to take advantage of increased market access opportunities, including through diversification of export products and markets, “said WTO negotiating document tabled during a trade workshop in Nairobi, on Wednesday. The draft modalities for non-agricultural market access developed in July last year said the countries will also be helped to meet technical standards and requirements as well as address other non-tariff measures.
However, the negotiations have stalled due to differences between the developed and developing countries over market access and subsidies that have distorted trade in agricultural products.
Trade Minister Amos Kimunya said the challenge facing the international community is how to translate these promises in the Doha mandate into reality.
“Failure to advance Doha development agenda would certainly be a lost opportunity for developing countries to become fully integrated into the global economy,” he said in a speech read by Assistant Minister Omingo Magara.
“The absence of a commitment to global trade liberalisation at WTO would further damage confidence in our already fragile global economy,” he said.
Sub-Saharan Africa stands to lose most should the talks fail as the share of exports from LDCs accounts for only 0.6 per cent of the world exports and 0.8 per cent of the imports. Within the East African Community, low level of industrialisation, inability to access advanced technology and lack of domestic savings to invest has limited export diversification efforts.
The region has remained highly dependent on primary exports like coffee, tea and tobacco that have led to declining terms of trade and faced price fluctuation in the global market.
“The region has inefficient taxation systems in which it is difficult for the country to calculate the rebate of indirect taxes, thus penalising exporters,” said Victor Ogalo, programme officer at CUTS Africa resource Centre, Nairobi.
“There is also inability to meet standards of developed countries like the European Union and difficulties in preparing and enforcing the required technical regulations.”
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