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Kenya: Hedge Against Trade Shifts


 

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Business Daily (Nairobi)

EDITORIAL
11 May 2008
Posted to the web 12 May 2008

Nairobi

A wise man was once asked what constitutes wisdom. The reply was that wisdom lay in balancing many and often conflicting undertakings with a satisfactory measure of success in all. That is the challenge many countries find themselves in when pushing trade deals with various partners.

Kenya finds itself in this moment of truth as far as tea and rice trade with Pakistan is concerned. For seven years, Pakistan has been lobbying Kenya to draw a preferential bilateral trade pact with it to protect trade between the two countries.

That trade boils down to two items: tea, which Kenya exports to Pakistan, and rice which follows the reverse direction.

The delay in acceding to Pakistani demands appears to be hurting tea farmers in Kenya with exports to the Asian country falling considerably over the last two years.

It emerges that Pakistan has signed the very kind of deal it wanted with Kenya with its Asian neighbours and Kenya is losing out. More shocks are in store as the falling out may eventually affect the import of Pakistani rice to Kenya at a time when a disease is ravaging rice fields in Mwea and Ahero.

Granted, Kenya's give and take position is compromised by trade deals it has signed under Comesa and EAC trade protocols, whose members are unlikely to change the arrangements just for the sake of Kenya.

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That does not mean Kenya should not try to influence the partners to accommodate its unique situation in upcoming trade reviews with the two blocs.

It, however, calls for urgency in the search for new markets for Kenyan products and in the quest for self sustenance in key areas especially food. In the former, value addition and increased local consumption need to move from talk to action while in the latter more land needs to be brought under cultivation through irrigation.

It is only then that Kenya can approach trade talks with all partners with some level of confidence.



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