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POLICY REVIEWS: SECOND PRESS RELEASE AND
Kenya: January 2000
Members were unanimous in congratulating Kenya for the actions undertaken towards trade liberalization, particularly as Kenya is an important player in the region. These steps included the progressive dismantling of quantitative restrictions, the rationalization of the tariff structure, and the lowering of the average tariff rate. Members recognized the social impact of these reforms and, it is my impression, were appreciative of Kenya's efforts in this regard, in particular the introduction of social safety nets. In this regard and on a more general level, some Members noted the importance of coherence both in policies and in the work of international organizations, particularly the WTO and the IMF..
31 January 2000
POLICY REVIEW BODY: REVIEW OF KENYA
The Trade Policy Review Body of the World Trade Organization (WTO) concluded its second review of Kenyas trade policies on 26 and 28 January 2000. The text of the Chairpersons concluding remarks is attached as a summary of the salient points which emerged during the discussion.
The review enables the TPRB to conduct a collective examination of the full range of trade policies and practices of each WTO members countries at regular periodic intervals to monitor significant trends and developments which may have an impact on the global trading system.
The review is based on two reports which are prepared respectively by the WTO Secretariat and the government under review and which cover all aspects of the countrys trade policies, including its domestics laws and regulations, the institutional framework, bilateral, regional and other preferential agreements, the wider economic needs and the external environment. A record of the discussion and the Chairpersons summing-up together with these two reports will be published in due course as the complete trade policy review of Kenya and will be available from the WTO Secretariat, Centre William Rappard, 154 rue de Lausanne, 1211 Geneva 21.
Since December 1989, the following reports have been completed: Argentina (1992 and 1999), Australia (1989, 1994 and 1998), Austria (1992), Bangladesh (1992), Benin (1997), Bolivia (1993 and 1999), Botswana (1998), Brazil (1992 and 1996), Burkina Faso (1998), Cameroon (1995), Canada (1990, 1992, 1994, 1996 and 1998), Chile (1991 and 1997), Colombia (1990 and 1996), Costa Rica (1995), C˘te dIvoire (1995), Cyprus (1997), the Czech Republic (1996), the Dominican Republic (1996), Egypt (1992 and 1999), El Salvador (1996), the European Communities (1991, 1993, 1995 and 1997), Fiji (1997), Finland (1992), Ghana (1992), Guinea (1999), Hong Kong (1990, 1994 and 1998), Hungary (1991 and 1998), Iceland (1994), India (1993 and 1998), Indonesia (1991, 1994 and 1998), Israel (1994 and 1999), Jamaica (1998), Japan (1990, 1992, 1995 and 1998), Kenya (1993 and 2000), Korea, Rep. of (1992 and 1996), Lesotho (1998), Macau (1994), Malaysia (1993 and 1997), Mali (1998), Mauritius (1995), Mexico (1993 and 1997), Morocco (1989 and 1996), New Zealand (1990 and 1996), Namibia (1998), Nicaragua (1999), Nigeria (1991 and 1998), Norway(1991 and 1996), Pakistan (1995), Papua New Guinea (1999), Paraguay (1997), Peru (1994), the Philippines (1993 and 1999), Poland (1993), Romania (1992 and 1999), Senegal (1994), Singapore (1992 and 1996), Slovak Republic (1995), the Solomon Islands (1998), South Africa (1993 and 1998), Sri Lanka(1995), Swaziland (1998), Sweden (1990 and 1994), Switzerland (1991 and 1996), Thailand (1991, 1995 and 1999), Togo (1999), Trinidad and Tobago (1998), Tunisia (1994), Turkey (1994 and 1998), the United States (1989, 1992, 1994, 1996 and 1999), Uganda (1995), Uruguay (1992 and 1998), Venezuela (1996), Zambia (1996) and Zimbabwe (1994).
We have had a comprehensive and very interesting review of Kenya's trade policies, which provided valuable insight into the significant trade reforms and structural adjustment undertaken since the previous Review, with a view to achieving Kenya's orientation to competitive markets. This was made possible both by the detailed information provided by Ambassador Rana and his delegation on recent and ongoing reforms, and by the high quality of comments made by the discussant and the participants in this TPRB. The large number of questions and comments reflected the widespread interest of Members in recent developments in Kenya as well as the importance they attached to Kenya's role in the region and in the WTO.
Members were unanimous in congratulating Kenya for the actions undertaken towards trade liberalization, particularly as Kenya is an important player in the region. These steps included the progressive dismantling of quantitative restrictions, the rationalization of the tariff structure, and the lowering of the average tariff rate. Members recognized the social impact of these reforms and, it is my impression, were appreciative of Kenya's efforts in this regard, in particular the introduction of social safety nets. In this regard and on a more general level, some Members noted the importance of coherence both in policies and in the work of international organizations, particularly the WTO and the IMF. They congratulated Kenya for fully implementing the WTO Agreement on Customs Valuation and for its determination to implement all WTO obligations.
On the other hand, most Members expressed concern over recent tariff increases for some agricultural products. They also noted that "suspended duties" made the tariff regime more distortive and less transparent. They encouraged Kenya to consider elimination of such duties and to pursue further trade policy reforms, as well as to accelerate the privatization programme to enhance its macroeconomic stability and facilitate foreign investment inflows. They further encouraged Kenya to increase the coverage of its tariff bindings, and bring the bound rates into line with applied rates with a view to increasing tariff predictability for trading partners.
At the same time, Members recognized the large number of legislative changes already implemented to improve transparency and accountability. Members expressed particular interest in areas where WTO-related technical assistance might be useful.
Members also asked for details in a number of more specific areas including:
- plans to incorporate WTO Agreements into Kenyan law;
- customs valuation, transparency and predictability of customs procedures, and plans to facilitate customs clearance;
- conditions for granting exemptions to compulsory standards;
- main provisions of the new anti-dumping and countervailing legislation;
- legislation on government procurement and any plans to become a signatory to the WTO Agreement on Government Procurement;
- recent progress on amendments to intellectual property legislation, including its coverage and enforcement activities;
- implementation of competition policy, including number of appeals, and transborder anti-competitive behaviour;
- ratification of the Fifth Protocol to the GATS, and further liberalization and privatization of the telecommunications sector;
- progress in regional trade liberalization under COMESA and the EAC, as well as the impact of such agreements on economic growth and public revenue;
- foreign investment legislation, efforts to increase transparency and stability of the investment regime, in particular criteria for approval of investment projects, any discrimination in the granting of incentives, and bilateral investment treaties;
- marketing boards in the agricultural sector;
- the industrialization strategy, as well as the situation of the textiles and clothing sector; and
- access to export markets for Kenyan products.
Members appreciated the frank and comprehensive responses provided by the Kenyan delegation, noting in particular the assurance that ongoing reforms were designed to reduce barriers to foreign participation in the Kenyan economy, based on the belief that an open trade and investment regime contributed to sustainable development, and thereby to the reduction of poverty; the reform programme, which would not be relaxed, should add further transparency, public accountability and predictability to the business environment.
In conclusion, it is my feeling that this has been a most successful Review of Kenya's trade policies. Members appreciate Kenya's determined efforts to improve its economic environment, and the central role of trade policy in this respect, so as to be fully able to benefit from its favourable resource base and achieve sustainable growth to the benefit of all its people, alleviating poverty. Kenya's active participation in the WTO seems to me to be central to this effort and I urge all Members to support Kenya in its ongoing efforts. In this respect, I think we should pay particular attention to Kenya's request to the Membership for technical assistance and for improved access to markets.