Phyllis Wakiaga is the CEO of the Kenya Association of Manufacturers (KAM). She was appointed CEO in July after serving as Policy Research and Advocacy Head at KAM since 2013. She was previously Manager for Government and Industry Affairs at Kenya Airways and a member of the East African Community Facilitation Team that ensured improvements across all airports in East Africa.
With the 10th WTO ministerial conference being hosted in Kenya this week I had a chat with Wakiaga on matters WTO; what it means for Kenya and KAM’s impact in implementing its mandate as the voice of industry.
1. Why is the decision to host the 10th Ministerial conference in Nairobi good for Kenya?
The ministerial conference is the highest decision making organ for the WTO and they meet after every two years. For Kenya it is a major milestone as the conference is the first to be held in Africa. It shows the confidence the world has in Kenya with regard to international and regional trade
2. Will this forum impact on-going talks concerning East African Community (EAC) markets and are issues that have to stood in the way of proper integration be talked about?
EAC market is a regional market and the countries are doing a lot to mainstream trade into their national development strategies, there is also lot of work ongoing to ensure free movement of goods and addressing bottlenecks and non-tariff barriers (NTBs) that occur.
WTO took stock on the achievements of the EAC block in 2012 and so far there has been positive development from 2012-2015 in terms of trade facilitation within the region. The conference is relevant to the EAC as it is a time for us to take stock and internalize what we have done so far to ensure that goods are moving freely within the trading block.
3. As the voice of industry and policy advisers to government what are the main issues that KAM will sensitize the government to explore during these talks?
Issues around subsidies: Least Developed Countries (LDC’s) and developing countries sometimes have to compete with countries which subsidize their farmers heavily and there is need to have cuts on the trade distorting subsidies within the world that affect doing business.
Policy stability and flexibility: As different countries we need to be able to flexibly implement and change our policies mainly in regards to agriculture, industrial goods and services so that if a country wants to make a decision regarding policy, there is that flexibility and room under WTO to be able to do that.
Duty free and quota free access: We know that there are a lot of preferential agreements signed that benefit especially Africa and other LDC’s and we are keen as a region during WTO to ensure that we are still able to benefit from them. This is because if everyone can’t get access they will lose their essence.
Cotton subsidies: this is important for western African countries which are not able to compete on the global market due to the subsidies given in developed countries.
Fishery Subsidies: We are disadvantaged as Africans because we do not have access to these subsidies and we are pushing for these to be extended to African countries.
Trade facilitation agreement: This is the most significant outcome of the BALI round of negotiations. The agreement was to increase the speed and efficiency of movement of goods and services across borders. KAM is keen on how far countries have come in implementing this so that they can take stock and move it to the next level. The Trade Facilitation Agreement (TFA) gives room to do it on a bigger scale.
Domestic support for agriculture: African countries would like agricultural support so that they can become competitive globally.
4. Will unfair trade practices be tackled at the forum; especially cases of dumping of steel items by Chinese companies?
Dumping is a practice whereby a country is selling its products in a foreign country below the market price in its own country. It has a very big distortion effect and this usually happens when a firm produces items in large scale but cannot find a market in the country where it is located due to issues like shift in government policy where they could be a move from real estate based growth to consumer based growth which can lead to low demand for their products. This then leads such firms to sell their products in other countries at below production price. This have a negative effect on businesses that are located in the countries where these products are dumped as they compete in a playing field which is not level. This is due to the fact that they are paying taxes and not benefiting from subsidies.
KAM recommends counter veiling duties or safeguards to ensure that domestic industries are protected. Other countries have trade remedies acts that enable them to impose duties. However this is not possible in Kenya as we do not have the same. It is our hope that the WTO platform will allow our legislators to realize the importance of having the right tools in place to ensure that international trade is carried out fairly. In this regard KAM has been lobbying the ministry and legislators to have in place the trade remedies act and have been pointing out areas where there is evidence of dumping in Kenya.
5. In what ways can Kenya leverage this event to improve its competitiveness?
We will be hosting about 7000 delegates and it will be an opportunity to showcase what we have locally in terms of hospitality, home made innovations and businesses. It is also an opportunity for networking and business linkages that can enable us grow our exports into other countries.There will also be a chance for partnerships between different business to be created and also to showcase how far we have come.
I must say that the EAC has come a long way in regional integration and in creating a common market and customs union. Kenya as a country has also done a lot in setting up structures to improve the ease of doing business this is an opportunity to showcase all the work that has been done around trade.
6. Which key milestones with regard to advocacy can KAM showcase for the year 2015 especially in matters where the EAC markets are concerned?
KAM has been able to address a number of non-tariff barriers (NTB’s) within the region, and we have held bilateral meeting with Uganda and Tanzania to try and address some of the NTB’s faced.
The Launch of the EAC manufacturers platform which brings together manufactures in the 5 countries. This is important in that manufacturers are now speaking with a common voice and working towards ensuring that they meet the meet the industrialization strategy and policy. Manufacturers are also advocating on each others’ behalf in their respective countries for an improved business environment and better business facilitation.
We have been pushing for harmonization of standards for EAC goods. This has happened on some level although there are still more goods that we need to push for. Harmonization of standards is one of the key areas which, if a consensus is reached soon, will bring us closer to realizing the EAC regional integration.
The EAC has also signed a tripartite agreement with SADC and COMESA which means a larger market for manufacturers in the region.
7. In which key areas does KAM feel that African governments under either ACP or blocks like EAC should lobby for market access to help their exports access the lucrative overseas markets.
For market access the main thing that one would lobby for is to have proper agreements that enable manufacturers to access markets on favorable terms.
The uptake of various agreements signed by different countries needs to be looked into. There is a need to identify the constraints and ask ourselves whether we need capacity building in terms of knowledge for local industries on how to access these markets. For instance, do we require training on standards so that we are able to meet standards required in the acquired markets? In some cases we sign agreements where tariffs are reduced but the bar is set high when it comes to standards hence the players negotiating the agreements need to be genuine.
8. What benefit, monetary or otherwise, does Kenya accrue for hosting such high profile world events?
Kenya is the first country in Africa to host a WTO conference and as such it sends out a signal that the country is a serious player in matters trade and economy. It also gives a positive trajectory in terms of messaging as opposed to some of the things that come out of the country.
It gives us an opportunity to host 7000 people in our country that means hotel bookings and consumption of our products. It also creates a chance for repeat business as some of the fears they could have had in terms of security are allayed.
9. Kindly list KAM programs that touch on the export space and their impact in getting Kenyan businesses access to markets outside of Kenya?
Products that touch on market access are offered under KAM consulting whereby we carry out visits to different countries and enable investors to explore different markets in terms of trade missions.
This year I led a trade mission to Mozambique with about 20 investors and met investment bodies and the government in a bid to understand what programs they have in place for businesses that want to set up there.
KAM also organizes trade expos to showcase the products that manufacturers have, we also provide market linkages for example in the case of AGOA we are trying to see how buyers in the US can be linked to our members so that they can be given specifications of the products required.
AGOA visa; for one to be able to the US market one has to have an AGOA visa and KAM provides that service.
Capacity building, this is in recognition that one needs knowledge and KAM has a manufacturing academy which builds the capacity of their members in regards to what is required for them to access the markets.
Business information service; We carry out research on what is required in these markets to enable members access.