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REPORT OF THE NATIONAL POLICY WORKSHOP ORGANIZED BY THE MINISTRY OF TRADE AND INDUSTRY IN COLLABORATION WITH THE AFRICAN  ECONOMIC  RESEARCH  CONSORTIUM  (AERC)  IN  THE CONTEXT  OF  THE  AERC  COLLABORATIVE  RESEARCH  PROJECT  – “AFRICAN IMPERATIVES IN THE NEW WORLD TRADE ORDER.”    VENUE: NAIROBI SAFARI CLUB (LILIAN TOWERS)      SPONSOR: AFRICAN ECONOMIC RESEARCH CONSORTIUM        DATES: 6‐ 7 AUGUST 2003  By Lawrence PCL Makumba, Chief Executive Lawmak Consultancy Services  

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BACKROUND AND OBJECTIVES As part of its policy activities, the African Economic Research Consortium (AERC) commissioned a number of background papers to assist African Trade Ministers in their preparation for the 5th WTO Ministerial Conference scheduled to take place in Cancun, Mexico from 10 to 14 September 2003. Among these are those relating to: • Agriculture • Trade in services • Manufacturing and Industrial Tariffs

The main objective of each paper was to update and assess the ongoing negotiations and other related issues in the light of African concnerns and negotiating priorities with a view to articulating appropriate options for African countries to pursue focused and workable strategies to adopt at the conference and during the remaining period covered by the Doha Development Agenda (DDA) work Programme. Accordingly, the workshop provided an excellent opportunity for interfaces and dialogue between Kenya’s key scholars and researchers who worked on these papers and the bureaucrats who were to prepare Kenya’s position paper in readiness for the conference. It is important to recognize that this is the first time these scholars and researchers were meeting to make their direct input in what was to go into the country’s position paper. While it is true that Kenya has in the past submitted good papers, the position would probably have been better if such papers were backed up by analytical research and data. Thus with the participation of these esteemed researchers and scholars, the workshop was expected to provide a golden opportunity for the country to be able to produce position papers of comparatively higher quality. Accordingly, the workshop was aimed at providing a forum where the contents of the papers would be discussed to assist the country’s preparation of position papers for the Cancun meeting and future negotiations. The workshop was also intended to bring together experts involved in trade policy analysis and negotiations to help form a network of experts in trade analysis in Kenya who can be called upon to assist in analysis of trade issues to support Kenya’s participation in the New World Trade Order. Thus, the list of the participants invited to the workshop was intended to provide the necessary critical mass for this purpose. Opening Remarks In a speech read by Director of Internal Trade Mr. Seth Otieno on behalf of the Permanent Secretary, Ministry of Trade and Industry, the PS welcomed participants and thanked the organizers of the workshop. He stated that Kenya constituted the National Committee on WTO immediately after the establishment of the WTO in 1995. The NCWTO draws membership from various

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institutions including: Government of Kenya Ministries, Parastatals, Academia, Civil Society, private sector umbrella organizations and Research institutions and has broad objective of bringing together all stakeholders to exchange views on issues pertaining to WTO and their likely effect on the Kenyan economy. He noted that even though NCWTO had enormous tasks, it had used the limited resources available to deliver in many areas particularly in the preparation of position papers during Ministerial Conferences. He expressed gratitude for the support received under JITAP Programme covering Training and Human Resource Development. He further recognized the efforts put in by the AERC in providing an excellent opportunity for interface and dialogue between key scholars and researchers who had worked on the various papers presented during the workshop which would go along way in adding value to Kenya’s position paper towards the meeting in Cancun, Mexico. In his concluding remarks, the PS assured participants that the Ministry would take seriously the recommendations made during the workshop, in particular as they relate to strengthening of Kenya’s negotiating position in the multilateral trading system. The Permanent Secretary’s text is attached as Annex IV. Remarks by the Representative of AERC On behalf of the Executive Director of AERC, Dr. Dominique Njinkeu underscored the importance of creating a pool of research analysts who undertake multilateral trade issues from both theoretical as well as practical perspective to help in shaping policy formulation. He noted the work that AERC had done right from the Seattle debate to the preparation stags in the lead up to Doha. He pointed out that under the context of the AERC collaborative Research Project “African Imperatives in the New World Trade Order.” AERC had been associated on a number of activities including the WTO/KIPPRA workshop held at Safari Park in Nairobi in September 2000: Workshop for Africa Trade Negotiators held in March 2001 preparatory to the Doha Ministerial. This workshop attended by Kenya Researchers as well. It was pointed out that the AERC was using the Kenyan Researchers in order to support the negotiating teams. The ultimate objective is to consolidate the process so as to feed directly in the policy process. It was also important to carry out an evaluation on a regular basis so as to determine and see which way the country was moving. Prof. Dominique informed the participants that the AERC was carrying out similar activities in other African countries including Uganda, Tanzania, Ghana, Cameroon and Nigeria.

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Brief Remarks By Mr. Nzuki J. M In his brief statement, Mr. Nzuki who is the Regional Trade Policy Specialist at the United States Agency for International Development (USAID) office in Nairobi said that his organization was pleased to be associated with this workshop whose staging he considered timely. His organization was interested in seeing increased trade within the region for the good of the inhibitants and the rest of the world. He observed that one of the challenges facing negotiators is when they engage in these activities when they are not prepared. In such a situation they are unlikely to get the best and most optimal results from such a negotiation. It is imperative that the developing countries organize and prepare themselves adequately for such negotiations. USAID was ready to assist where it can. ADOPTION OF THE AGENDA AND PROGRAM OF WORK. The agenda and Programme of work for the 2 day workshop event were unanimously adopted, and Mr. Raphael Mwai of APSEA was elected Chairman of the Session. SESSION I

1. OVERVIEW OF THE STATE OF THE TRADE NEGOTIATIONS IN GENEVA BY NELSON NDIRANGU-KENYA`S CHIEF NEGOTIATOR AT THE PERMANENT MISSION IN GENEVA. 1

Implementation –Related Issues and Concerns. It will be recalled that prior to the Seattle Ministerial Conference, developing countries had raised issues that they felt had hindered the realization of meaningful gains from the new system of rules (Uruguay Round Agreements). The Seattle ministerial ended in a fiasco. In the lead- up to Doha, developing countries insisted that implementation issues had to be resolved before moving to new areas. The Doha declaration explicitly recognizes the “utmost importance” attached to implementation issues and promised that they would be part of the work Programme that was established. Yet few of the implementation issues that were to be resolved post-Doha have not seen any positive movement. Numerous deadlines have been postponed, while others have been missed outright. Members have failed to reach consensus including the way forward on almost all items under paragraph 12(b) of the Doha Declaration. In some cases members were so divided that the chairmen of respective WTO bodies encountered a lot of difficulties in finalizing their reports to the General Council. For instance, the

1 Prepared from Mr. Ndirangu’s Notes.

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chairman of the Council for Trade in Goods could not finalize his report on Textile and Clothing because of serious disagreement among members. Agriculture. Negotiations on Agriculture started as scheduled in 2000 but very little progress took place until the launch of the Doha work Programme. At the November 2001 Doha Ministerial Conference the Article 20 mandate was further enhanced and the agriculture negotiations became part of the single undertaking in which virtually all the linked negotiations are to end by 1January 2005. • The work Programme adopted for the current negotiations on 26 March 2002

mandate members to agree on modalities for further liberalization commitments on the three pillars(Market Access, Domestic Support and Export Subsidies) by 31 March 2003)

• In this regard and in accordance with the work Programme the chairman of the

Agriculture Negotiations issued the 1st Draft modalities on 12 February 2003 and the revised draft modalities paper on 18March 2003.

• The March 2003 deadline was missed which is a major setback to the Doha Round

of Trade Negotiations. Agriculture is the make of break issue for the most countries as progress in agriculture would determine the tenor of countries readiness to negotiate in other areas under the Doha Mandate.

• WTO Members have therefore agreed to continue technical and other consultations

with a view to further advancing the negotiations on agriculture and agreeing on modalities at the Cancun Ministerial in September 2003.

Market Access • Under Market Access discussions have centered on what formula approach to be

used, what type of special Differential Treatment to be given developing countries special safeguards and for which countries and what improvements to be made on tariff quota administration.

Domestic Support • The focus has been on how to discipline and reduce domestic support levels in

developed countries, elimination or reduction of domestic support levels, how minimally trade distorting are the Blue and Green Box and the need for a countervailing mechanism for developing countries.

Export Competition

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• Regarding export competition, there have been detailed discussions on whether to eliminate or reduce export subsidies, establishment of measures to avoid circumvention of export subsidies, establishment of stricter disciplines of export restrictions and taxes, food aid and export credits.

Special and Differential treatment for Developing Countries • Regarding S & D discussions have centered on the need to have real and practical S

& D provisions for developing countries. Indeed these provisions should be pegged to development and therefore the need to move away from the traditional S & D concept relating to longer implementation periods and lower reduction rates.

• Harbinson`s revised draft modalities appears to be an empty promise, it does not

define the actual mechanism for the S&D provisions to be made operationally effective.

Services. Like agriculture, services negotiations started in 2000 as part of the unfinished business in the Uruguay Round of trade negotiations. As provided for under Article XIX: 3 of GATS, the negotiations are based on the guidelines adopted in March 2001. These guidelines which were re-affirmed in Doha further mandated members to continue negotiations on outstanding issues (the establishment of emergency safeguard mechanism, possible disciplines on domestic regulations and government procurement). Members chose the request and offer approach as the main method of negotiating new specific commitments (market access). Negotiations are still in the request/offer phase. Almost all WTO members have received initial requests from 30 members mainly developed and leading developing country members including Kenya. These requests cover all the 12 services sectors A few countries (23 reported in the TNC of 9 May 2003) have submitted their initial offers. These offers have been received mainly from developed and a few developing countries. So far no African country has submitted its initial offer. Many developing countries do not see the rush is services, as deadlines essential to their interest have lapsed. Most of what has been offered by members represents the status quo in the respective member country services sector. Positions of Major Players One could identify 3 major groupings. Developed countries led by EC and the US prefer a broad and comprehensive negotiations and are generally viewed in the WTO as the demandeurs for market access concessions. The second group include developing countries in Asia (except for India and Singapore) and Brazil which have shown

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reluctance to commit themselves to opening further in services sector particularly financial services given their 1997 financial crisis. Other developing countries are focusing more on other areas such as agriculture and would be willing to show flexibility in services sector if developed countries mainly EC and the US exhibited flexible attitude in agriculture negotiations. Market Access for Non Agricultural Products Negotiations on market Access for non –agricultural products is a key item for what has come to be referred to as the Doha Development Agenda. The negotiations have focused on further tariff cuts and the removal of non tariff barriers. In principle the members have agreed that tariff negotiations should not exclude any product from tariff cuts. The modalities for tariff cuts are yet to be agreed. Nevertheless developing country members should be able to obtain substantial tariff cuts on products of export interest to them and are not expected to offer tariff cuts of equal value in return. In March 2002, the CTE, special Session placed the negotiations on environmental goods in the NGMA thereby subjecting those goods to the rules applicable to paragraph 16 of the Doha Ministerial Declaration (DMD). Proposed Approaches To Negotiations. Several approaches have been suggested: request /offer, formula, self selection and a cocktail approach. • Request /offer approach is favored by Members that wish to avoid concessions n

sensitive sectors. • Several formulas have been proposed (linear [India] and graduated (Swiss EC, US,

Japan, Korea, China) and although focus has been on formula approach, members have not agreed on any or a combination of them.

• Zero for zero approach proposed by industrialized countries has been resisted by developing countries as it would not only have adverse effect on government revenue but could pose severe competition that may lead to closure of domestic firms with its attendant consequences.

• A number of members particularly African want developing country members to be allowed to determine on their own any further reduction commitment given the adverse effect witnessed during the previous liberalization process.

• There is no agreement on the base rates to be used in staging further tariff cuts. The US prefers the applied rates while developing country members prefer bound rates as the only legitimate base used in the GATT and now the WTO. Developing country members argue that they need policy space to address their development concerns.

• The ACP Group is working on a correction coefficient to reduce the erosion of preferences should a formula approach be agreed as the method to be applied in tariff cuts.

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• Regarding non-tariff barriers (NTBs) 18 members, two from Africa (Kenya and Senegal) have submitted what they consider major barriers that need to be addressed in continuing negotiations. Proposals on the table issue include sending some of the NTBs to other relevant negotiating Group on Market Access for non- agricultural products (NGMA). While no agreement has been reached, Kenya prefers sending NTBs that are subject of negotiations to the relevant negotiating groups and the balance to be discussed in the NGMA.

• On environmental goods, although members have acknowledged that APEC and OECD lists form a good staring point, developing country members have insisted on a definition or listing that will embrace the letter and spirit of paragraph 16 of DMD.

Position of the major players • Developing country member are opposed to further liberalization that will not

reflect less than full reciprocity. They have argued that any formula approach even with different co-efficient may not yield the desired results as developing country members will liberalize by higher percentage points than developed country members. They therefore feel that focus should be on elimination of tariff peaks and tariff escalation on products of export interest to them.

• Developed country members want substantial improvement in market access commitments. For instance the US has proposed tariff free and quota free market access for industrial products by 2015. Many developed country members are pushing for zero for zero approach.

Trade Related Intellectual Property Rights One of the unresolved issue in Doha was the difficulties that Member with insufficient or no capacities face in making use of compulsory license to address their public health problems. Members went through tortuous and torturous exercise that produced the 16 December 2002 Draft text, the consensus of which was blocked by the US. Since then not much has happened as at August 2003. • Members have been negotiating on a multilateral system on notification and

registration of Geographical indications (GIs) for wine and spirits in special Sessions of the TRIPS Council. While the EC has bee pushing for mandatory system other members have expressed their wish to make the registration voluntary without any legal effect.

• The discussions on the review of Article 27.3 (b) have centered o the relationship between the CBD and TRIPS focusing on traditional knowledge. Discussion on folk role, patenting of life forms and farmers right have not progressed as expected.

• Discussions on non-violation and situation complaints remain generally as before Doha where on the one hand the US still insists their applicability to TRIPS disputes and on the other hand developing country members with the support of other developed country members oppose the application of such complaints to the TRIPS disputes.

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Singapore Issues Developing country members agreed to a conditional work Programme for the Singapore issues on the understanding that development related issues such as S&D, TRIPS and Public Health, Implementations and mainly agriculture would be given priority in the Doha Development agenda. Consensus on modalities for negotiations on Singapore issues is unlikely to be agreed before Cancun given the lack of progress on issues of interest to developing country members. The status of play is summarized below: • Investment: DMD identifies 7 issues that need clarification: scope and definition,

transparency; non-discrimination; modalities for pre-establishment commitments on safeguards; positive list approach; development provisions; exceptions and BOP safeguards; and consultation and the settlement of disputes between members. Some members have argued that the list should be considered as exhaustive but could include trade and financial needs of developing and LDCs.

• Disagreements exist amongst members in almost all elements. EC, Japan, Canada, Chile, Costa Rica, Australia and Korea favor a broad, stable and transparent climate worldwide. They are of the view that non-discrimination, transparency and predictable domestic laws should be the guiding principles for the framework of negotiations. They are therefore, willing to accept a GATS-type positive list approach.

• The US has been less enthusiastic for investment in the WTO because of the negative reaction from developing country members. It would rather prefer bilateral investment treaties in which it has already negotiated 40 of them. It has however shown indication that it could accept a WTO investment that focuses transparency provisions only. This would allow the US to enter into bilateral investment treaties that offer comprehensive package of protection of its investors than would otherwise be concluded under the WTO.

• Most off developing country members still agree that the study process should continue to address: limitations to any pre-establishment concession\; permission for developing countries to use incentives; the establishment and maintenance of technology transfer as a precondition of investment; permission to prohibit or limit the amount of foreign investment in certain types of investments; and the absence of any investor-state dispute settlement provisions.

• Competition: Paragraph 25 of the DMD provides for the WGTCP to seek clarification of: core principles, including transparency, non-discrimination and procedural fairness, and provisions on hardcore cartels; modalities for voluntary cooperation; and support for progressive reinforcement of competition institutions in developing countries through capacity building.

• Discussions so far show a wide array of differences. There are differences even among the supporters of a framework agreement mainly focused on scope and nature of exceptions that could be incorporated.

• Some developed country members (EC, Canada, etc) have pressed for a broad competition policy that addresses issues such as cooperation among competition authorities, transparency, MFN and technical assistance. As in investment the US

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does not appear enthusiastic on competition policy and favors minimizing the scope of a multilateral framework, including limiting the role of the WTO in the area of antitrust dispute resolution. Several developed country members have expressed similar sentiments and have emphasized on the need for appropriate technical assistance to understand the subject including its implication on their economies.

• Government Procurement: while most of the developed country members feel tat members should move to the negotiating phase, most developing countries underline the importance of using government procurement as one of the few policy tools available for achieving socio-economic objectives. Developing country members’ are opposed to any obligation to notify members of all tenders or translate them into the official languages of the WTO, as well as WTO reviews or examination of domestic laws and regulations. While members such as Japan want a legally-binding and effective transparent agreement, developing countries feel that it should not be subject to dispute settlement proceedings.

• Trade Facilitation : the work programme has focused on GATT Articles V, VIII, and X. Technical assistance and capacity building for developing countries including trade facilitation needs and priorities of members mainly developing countries and least developed countries has also been addressed. Developed country members have long advocated comprehensive rules governing trade facilitation. They have proposed measures that establish effective rules governing trade facilitation. They have proposed measures that establish effective appeal procedures; the introduction of an advance ruling system and establishment of inquiry points. On the other hand some developing country members resist the creation of binding and enforceable rules governing international trade procedures on the grounds that they lack the financial and human resources to adopt and administer new laws and sovereignty. As in other Singapore issues trade facilitation has attracted technical assistance to developing country members with a view to building country member with a view to building capacity for members to enter into negotiations.

WTO Rules Developing country members had prior to Seattle and Doha Ministerials pressed for tightening of disciplines on the use of trade remedies as they had become major targets of anti-dumping and countervailing investigations that disrupted their trade. The inclusion of rules was therefore, a victory for developing country members. The negotiations foreseen in Doha however, preserve “the basic concepts”, principles and effectiveness of the Agreements and their instruments and objectives. A spirited fight led by Iceland, the Philippines and the US saw the insertion of fisheries subsidies. Japan and Korea have long resisted the development of WTO disciplines on fisheries beyond the existing general disciplines. Regional trading Agreements have been under WTO scrutiny but no common understanding has been reached. The discussions that are taking place could have far reaching implications particularly on ACP/EU negotiations on EPAs.

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Over 40 submissions have been made to the Negotiating Group on Rules most of them reflecting the Pre-Doha divisions. On RTAs, despite the vital interest of this issue to developing country members only Chile and Turkey have made Submissions. There is need for developing country members to incorporate development in their submissions and press for the retention of the current framework of WTO rules. So far the discussions have been smooth without any controversies. The scenario is likely to change when issues such as less than full reciprocity in the market opening to developed countries with which they form a free trade area is brought in the discussions. Dispute Settlement Understanding There is a general understanding that the DSU should be modified to improve its operation and correct some procedural deficiencies. Discussions on the review however, have not led to the identification of possible consensus areas. The African Group has proposed a wide range of issues that aim at assisting weaker developing country members’ participate in the dispute settlement mechanism. Some of the issues contained in the proposal include terms of reference on competence and functions of panels, enhanced third party rights, separate opinions and reference of question of interpretation to the General Council. Also included is the consideration of panel report on development implications for implementing the findings and recommendations, monetary compensation to address measures in breach of the WTO obligations and collective suspension of concessions (collective retaliation) The rationale behind the proposal on collective suspension of concession is that trade retaliation by economically weak developing country member would not inflict any significant harm to a developed country member. In the end it will be the developing country which is imposing retaliatory measures that will be hurt by the same measure. DSU does not currently give protection to the weaker Members since the remedy provided assumes equal strength economically. The African Group has also proposed the establishment of a fund to train capital based lawyers involved in WTO work. They have also proposed amendment to Article 12.10 to provide for sufficient time to prepare and present their amendment before panels. Given the short time left, the deadline is likely to be missed. Should there be no meaningful conclusions by the end of May, which is more than likely; some members have suggested using Cancun to define a mandate for further negotiations. Trade and Environment The negotiations on trade and environment are limited to the relationship between the existing rules and specific trade obligations (STOs) set out in Multilateral Environmental agreements (MEAs). Work has been structured in three phases: examination of individual MEAs; identification of STOs in those MEAs and identification of relevant WTO rules.

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• The negotiations on are converging towards STOs in a number of MEAs. some member have suggested that the committee focus on three (CITES, Basel Convention and Montreal Protocol) while other have proposed to expand the number to six (international Tropical Timber Organization, Cartagena Protocol on Biosafety in addition to the three above.)

• No concrete decision has been made regarding the information exchange between WTO and MEA secretariat. Suggestions include regularizing /institutionalization of existing MEAs information exchange focused on specific topics, and enhanced cooperation at the national level between trade and environment officials and at the international level between MEA and WTO Secretariat. The issue of granting observer status to the MEAs has not been resolved.

• On Environmental goods the CTE, SS has not yet defied or come up with a list of what would constitute environmental goods. Some members have proposed the OECD and APE lists as the basis. Kenya has indicated that although the two lists could be good starting points, there was need to define or come up with a list that reflect the aspirations of the DMD i.e. a list of environmental goods of export interest to developing countries. It would be advisable for Kenya to come up with its own list of what it considers to be environmental goods so as to feed it in these negotiations.

Special and Differential Treatment. The DMD instructed members to strengthen the S&D provisions and make them more effective and operational by turning some of the best endeavor clauses into firm obligations. The CTD, SS was expected to finalize its discussion on S&D and forward its report for a decision by the General Council by the end of July 2002. The deadline was missed and the discussions went on until early February 2003 where out of more the 80 proposals only 12 were concluded but in watered-down versions. Attempts by the CTD, SS to seek clarification from the General council were blocked by major developed country members. Instead the requested the in-coming Chairman of the General Council to consult on the way forward. The new Chairman conducted consultations and came up with a proposal that has categorized all the outstanding proposals into three categories. Work on the first category that contains 38 proposals is expected to be completed before Cancun, the second category of 38 proposals will be referred to the relevant negotiating bodies for further work and the third category contains 12 proposals which according to he Chairman, members are unlikely to reach consensus. The Chairman’s proposal to refer some of the proposals to the negotiating groups means that their outcome will depend on when the negotiations will be concluded. In addition if care is not taken they will become part of the single undertaking, a situation that Ministers did not envisage in their instruction to the CTD. It is not clear whether the Chairman’s categorization of the proposals and his intentions to conduct consultations at Ambassadors level will be acceptable to all members. Informally the African and the LDCs consultative Groups have stated they will reject the proposal while some developed country members have in principle accepted the categorization but have reservation with

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the proposals contained in category one. The Chairman may have to abandon this approach in case it does not command consensus. Doha Issues Trade, Debt and Finance Trade and Transfer of Technology Technical Assistance and Capacity Building Floor Discussions OVERVIEW OF THE STATE OF PLAY OF THE NEGOTIATIONS IN GENEVA. To kick off the discussion, the Chairman Mr. Raphael Mwai sought to know a brief history behind implementation issues. Why was so much importance attached to them? Commenting on the drafting of the language in the legal texts, Mr. Manyara sought to know whether it was possible to clean up the rules and correct the imbalances without changing the architecture. How would the two be reconciled? Mr. Kinuthia of the Consumer Information Network sought to know to what extent Kenya would be willing to accept the ‘New Issues’ in the event she was offered some incentives. Mr. Sabwa of KIFWA wanted to know why subsidies which were supposed to have been faced out are still being provided. What is Kenya’s position if the EU is still subsidizing? For Regional Integration to be meaningful in East Africa, why is Kenya still sitting on the fence, and not joining the LDCs band wagon? In response Mr. Ndirangu stated that there was a problem. “We needed a strong position. Retaining the architecture was problematic. We should put in a strong proposal. But if we concede, we have to think twice. There is nothing for free in the WTO.” On the question of new issues, Mr. Ndirangu thought there should not be any linkage with the other issues. In any event the benefit that could be derived from the new issues are far from being realistic. What is offered to the LDCs seems to be attractive. But there is a challenge. LDCs must meet all the market entry requirements e.g. rules of origin, TBT, SPS. Their biggest problem to meet these requirements is the capacity constraints. Session II

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2. PRESENTATION AND DISCUSSION OF THE STUDY REPORT ON TRADE IN SERVICES WITH FOCUS ON THE CURRENT NEGOTIATIONS.

The presentation was made by Dr. Samuel Nyandemo and was based on a study entitled “Kenya’s services sector; Emerging National Regional and Global Issues”, by Gerrishon K. Ikiara, Samuel M. Nyandemo, and Moses Muririra. Supplementary and additional information was furnished by Dr. Moses Ikiara after the main presentation. The Paper prepared under AERC’s Collaborative Research Project on African Imperatives in the New World Trade Order, looks at the role of services in the Kenyan economy; the general performance of the sector; important policies and the general regulatory environments for the main services sectors, the main constraints and their implications on the sectors; trends and constraints in the promotion of the country’s trade in services and the trends key variables that drive the sector are likely to take in the next 5 -10 years and the implications of those trends on the sectors role, structure and performance. In addition, the paper discusses the range of commitments the Agreement on Trade in services and proposes issues of interest for the country in the on going negotiations. Services in the Kenyan Economy The service sector has been the most important sector in Kenya’s economy in terms of employment creation, contribution to the gross domestic product (GDP) or foreign exchange earnings, and the importance has been increasing overtime. Thus, services` share of GDP rose from 44% in 1960 to 52% by 1990 and 62% by 2000. The share of employment is even larger; it rose from almost50% in 1970 to over 68% by2000. With respect to foreign exchange earnings and balance payments, export of services accounted, between 1970 and 1960s on average, for over 50% of foreign exchange inflows and about 33% of the outflows per year in the country’s current account. Transport, Tourism and Telecommunications are the country’s top three service exports while insurance; transport and travel (tourism) are the top three service imports. By mode of supply, cross-border is the most important accounting for about 68-72% of the country’s total services export between 1998 and 2001. The corresponding shares of consumption abroad and commercial presence commercial presence combined with movement of natural persons were 14-20% and 13-15%, respectively. In view of the subject of this work, focus is therefore placed on issues which related directly to the current negotiations. Travel and Tourism Areas of Interest in GATS 2000 Negotiations In the ongoing GATS 2000 negotiations, the following issues in travel and tourism may be of interest to Kenya:

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• Unilateral issuance of travel advisories/warnings by developed countries. • Unbundling of travel distribution systems as a measure to counter vertical

integration and conflicts of interest in travel agencies. • Subjection of global distribution system (GDS) operations to multilateral

disciplines and dispute-settlement mechanisms in order to reduce anti-competitive practices.

• Relaxation and gradual removal of restrictions and cumbersome and discriminatory licensing and other requirements (such as partnerships with local firms and economic needs tests, ENTs), by developed countries on commercial presence of foreign tour operators, travel agencies, restaurants and hotels.

• Relaxation and gradual removal of restrictions on the movement of natural persons engaged in the supply of different tourism services. These include ENTS, barring of foreigners from undertaking business operations in the restaurant sub-sector, and lack of transparency and clarity on the implementation of immigration regulations, policies and procedures.

• Greater liberalization of global air transport services since these are critical drivers of international tourism.

Telecommunications Commitments and Areas of Interest in GATS 2000 Negotiations Kenya made commitments in telecommunication and audiovisual services and is obligated to the GATS reference paper on telecommunications. A wide variety of telecommunication services are committed, including voice telephone, telex facsimile, electronic mail, and voice mail among others. There are limitations especially on market access, however, including foreign equity limits, public monopoly (often for specified periods) over basic telecommunications, and prohibition of international call-back services. Movement of natural persons is unbound except for managers and other expert staff. In audiovisual services, motion picture and videotape production services (excluding distribution services) have been committed without limitations except in the case of commercial presence, which is unbound, and movement of natural persons. The other service committed is motion picture projection but with cross-border trade unbound and movement of natural persons limited. For the two services committed, national treatment with respect to movement on natural persons is unbound. In order to attract foreign investment and technology in the country’s telecommunication services, the existing regulations which have tended to favour government monopoly and various exclusive contracts will need to be quickly changed, by committing, within GATS framework, a selected range of telecommunication services in which the county does not have sufficient domestic capacity to undertake. Financial services

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Commitments and Areas of Interest in GATS 2000 Negotiations Kenya has entrenched the liberalized nature of her financial services by committing a number of financial services within the GATS framework. The government committed services that had essentially remained highly liberalized for along time so that commitments did not introduce major changes in the financial sector. By the beginning of 1998, the country had fully committed acceptance of deposits, all types of lending including various forms of consumer credit, mortgage credit and financing of commercial transactions; all payments and money transmission services; guarantees and commitments; securities and provision of related services except underwriting services; asset management except pensions of related services except underwriting services; asset management except pensions fund management; and advisory and other auxiliary financial services. In the case of insurance services, Kenya has committed life and non-life insurance, brokering and agency services, auxiliary services including assessors, intermediaries and loss adjusters; and re-insurance and retrocession. However, there are limitations to market access especially with respect to commercial presence. Foreign equity is limited to 40%. National treatment and movement of natural persons are, moreover, largely bound. Kenya has expressed, within the GATS framework, the need for a strong and transparent regulatory regime and efficient supervisory body before further liberalization of financial services is undertaken. This interest ought to remain as GATS 2000 negotiations proceed. The country, in addition, could consider making more commitments in order to attract foreign investments into the oligopolistic banking sector and into insurance services where the country lacks adequate capacity to cover aircraft. In terms of market access request, the insurance industry could benefit if restrictions, in some African countries, against re-insurance business from Kenya are relaxed. Transport Services Commitments and Areas of interest in GATS 2000 Negotiations Within the transport services category, Kenya has committed only air transport and road transport services. Within air transport, the specific services committed are aircraft repair and maintenance services (generally mode 2 only), selling and marketing of air transport services (mainly modes 1 and 2), and computer reservation system (CRS) services (mainly modes 1 and 2). In road transport, the specific services committed are passenger transportation(mode 1 only), freight transportation (modes 1 and 2), rental of commercial vehicles with operator (modes 1 and 2 ),maintenance and repair of road transport equipment (mode 2 only), and supporting services for transport services (modes 1 and 2). This level of commitments reflects fear and conservativeness even in a sub-sector like air transport where the country lacks adequate capacity. There is substantial opportunity for opening up within limitations such as local partner requirement, employment creation, and technology transfer) that can benefit the country.

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Kenya’s strategy in the negotiations on maritime services will need to be guided by the following factors: • In the short term and medium term, the country will need to pursue a policy that

helps to reduce freight charges for cargo handled at the port. One of the possible strategies in this regard will be to pursue a policy that increases competition among international conference and non conference shipping lines.

• There is need to plan for gradual development of the national shipping capacity and

combine this with focused attention to how the UN Code of Conduct on Maritime transport could be implemented with the objective of raising the country’s share of shipping services produced at the Mombasa port.

• With regard to increased benefits from auxiliary maritime services, there is need to

remove the monopoly enjoyed by the state in the supply of various services. Foreign investment could be allowed with conditions to partner with local interests as an effective commercialization programme.

Professional Services Commitments and Areas of interest in GATS 2000 Negotiations. Kenya has not committed professional services within GATS. Indeed, restriction of movement of natural persons (mode 4) is one of only two horizontal commitments the country has listed in its schedule of commitments. Only entry of managers and experts required for the implementation of foreign investment is allowed. With respect to the country’s requests, mode 4 has featured prominently just like in other developing countries. Kenya’s past positions with respect to this include: • Gradual negotiations on professional services, proceeding on a profession by

profession basis, owing to their differing circumstances and capacities. • Economically meaningful commitments of mode 4 from her trading partners.

Currently, trade in professional services is constrained by restrictions over the form of establishment, limitations on formation of partnerships and joint ventures, limitations on foreign ownership and control, nationality or citizenship requirements, residency and local presence requirements, licensing and accreditation of foreign professionals, limitations on the scope of activities, restrictions on partnerships between different professions, and fee and advertising restrictions.

• Accession to existing mutual recognition agreements (MRAs) in order to improve market access for the country’s professional services.

• Multilaterally, agreed criteria and procedures for application of ENTs. Besides these, other interests in professional services negotiations the country could consider include:

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• Encouragement of joint ventures between local and foreign professional firms, for the purpose of technology transfer, through limited commitments especially in the case of already liberalized professional services.

• Reciprocal market access conditions between Kenya and other countries, including negotiation of MRAs. In particular, regional agreements have the potential of building national capacities and competitiveness through MRAs, free movement of professionals, and liberalization of government procurement practices.

• Joint negotiations as regional blocs for greater effectiveness. Broad Issues of Interest for Kenya within GATS 2000 Negotiations. Besides the specific issues that have been identified in the preceding sections of the paper, broad issues that are of interest to the country and other developing nations include: • Improvement of GATS classification of services sectors. • Assessment of the extent to which GATS has been effective as an instrument to

take advantage of opportunities streaming from trade liberalization. • Recognition and crediting countries for autonomous liberalization • Implementation of the GATS Article IV on increasing participation of developing

countries. • Assessment of compliance with existing notification requirements before

embarking on the development of additional obligations and, more generally, the implementation of the commitments already scheduled by developed countries.

• Development of model WTO schedules for developed countries to aspire to. • Possibility of adverse impact on the provision of pro-poor public services through

GATS locking in privatization polices forced upon developing countries by the international financial institutions. (IFIs)

• Clarification of whether the services delivered through public private partnerships are covered by GATS.

• The need for updated regulatory frameworks in response to changing realities and technological advances.

• Improvement in specifity and clarity in some GATS Articles, e.g. Article VI.4 that requires countries to restrict their domestic regulation to measures that are “not more burdensome than necessary.”

SERVICES DISCUSSIONS

1. During the debate that ensued, there were some very interesting observations. One was for instance a situation where studies which may have cost a lot in terms of resources both in human capital, time etc were left to be feasted on by cockroaches “cockroach consumption.” It was hoped that the new Government under NARC would adopt a different approach and appreciate the role of professionals, and the need to disseminate the work done by professionals and researchers.

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2. There was also a question (raised by Dr. Dominique) regarding which of the modes of supply would be applicable in a situation where a country did not have a single vessel.

3. According to Mr. Mwai, what was important was doing business not the ownership of a vessel.

4. Prof. Okelo was of the view that more studies were necessary in order to help the country in determining future trends in liberalization, it being understood nevertheless that liberalization was not a panacea.

5. Also highlighted during the report presentation was rampant corruption and inefficiency at the Port of Mombasa.

6. Other interventions on these issues were made by the following a) Mr. Makumba (comment on CAPAS) b) Mr. Ndirangu c) Mr. Mutunga d) Mr. Otieno e) Dr. Ikiara f) Prof. Njinkeu (needs assessment and modes of supply)

3. PRESENTATION AND DISCUSSION OF THE STUDY REPORT ON MANUFACTURING IN KENYA.

The Paper on Manufacturing in Kenya was prepared and presented by Professor Francis Mwega, Department of Economics, University of Nairobi. The Paper was prepared under the AERC Collaborative Research Project: African Imperatives in the New World Economic Order.” The Paper is divided into 6 main sections namely: • Introduction • An overview of the New Multilateral Negotiations

- WTO and the Doha Ministerial Conference - The ACP-EU Cotonou Agreement - The African Growth and Opportunity Act.

• Performance of Kenya’s Manufacturing Sector: 1980-2002 • Trade and Related Policies and Manufacturing Sector Performance.

a) Import Policies - Tariff Reforms - Relaxation of quantitative restrictions

b) Export Policies - The Manufactured exports subsidy scheme. - Manufacturing under Bond. - Export Processing Zones - Strengthening of export promotion institutions

c) The Exchange Rate Policy

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- Impact of Trade and Exchange Rate Policy on the Manufacturing Sector Performance

- Other Policy Reforms - Current Government Industrialization Strategy

d) The External Market Access conditions of Kenya’s Manufacturing Exports. e) Some simulations of the likely impact of changes in multilateral trade rules in

manufactures. - Impact on the Domestic Trade Regime - Impact on External Market Access conditions

f) Conclusions Important Points as highlighted in the Report Kenya, like many African countries, is facing and will continue to face daunting challenges over the next several years in terms of effectively participating and forcefully articulating its interests in the context of multilateral trade negotiations (WTO, ACP/EU Cotonou Agreement, AGOA, etc). These negotiations will take the relationship between the country and its main trading partners well beyond the non-reciprocal preferential trade relationships that it has, until recently, enjoyed. As some degree of reciprocity is brought into these relationships, the country will be obligated to more seriously confront a number of questions relating to the costs and benefits the particular trade negotiations. The reciprocal nature of the negotiations implies, on the one hand, that African countries may have to offer something in return. Yet many of them are, apparently, reluctant to accept further liberalization of their domestic industrial trade regimes. This reluctance appears to be based on several considerations, including the presumed need for infant industry protection (at some unspecified level), the fear of the possible negative impact of tariff reduction on tariff revenue, and the perception that previous trade liberalization may have caused some amount of the industrialization as previously protected industries have failed to survive the pressure from increased import competition, while “new” industries have failed to materialize. Trade and trade policies are, on the other hand, considered to be important determinants of economic performance. International trade offers opportunities for greater specialization, increased capacity utilization and imports of goods and services. There is a consensus that exports play an important role in this process. This is particularly the case of manufactured exports. Manufactured exports can support sustained overall economic growth more effectively than traditional primary exports for at least three reasons (Elbadawi 2001). First, they are likely to grow faster when the global economy expands because they have higher income elasicities of demand. Second, because of higher price elasticities of demand and supply, they are less susceptible to price swings. Third, the manufacturing sector offers much greater prospects for dynamic production gains. There are two ways that trade liberalization under multilateral arrangements may promote investment and exports. First, is through improved market access for a country’s exports. Second is through increased credibility of domestic policies by providing a policy lock in

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mechanism. The latter is important because investors view Africa as a high risk area, with the perceived high probability of policy reversals a major deterrent to investment. When investors feel there is a significant possibility of policy reversals, they may withhold or prefer to wait until the policy uncertainty is resolved. As recent research suggests, the reduction of policy uncertainty through such a lock in mechanism would have a positive impact on investment and exports. Multilateral trade arrangements may help reduce these perceived risks by acting as an “agent of restraint” and therefore promote the investment required for building export capabilities. Reciprocal trade arrangements may offer two alternative ways of achieving lock in (Collier, 1998). First, such arrangements are by design an external agency of restraint in the sense that a member country binds itself by accepting the agreed provisions. The existing WTO rules however offer weak discipline as policies such as foreign exchange rationing are still legal. They also offer little defense against developed countries’ protectionism as there is wide scope for anti dumping, countervailing and safeguard actions under the existing WTO rules, which future trade negotiations will try to rationalize. Second, under the traditional GATT process of reciprocal concessions, African countries have negotiating rights on a substantial component of their exports for example to European Union (EU). Under the GATT “request and offer system”, an African country can for example request an EU member for a reciprocal reduction of a tariff on its export if it is a major exporter of that product. It is this process that the ACP/EU Cotonou Agreement proposes to formalize under the ongoing negotiations. Kenya like many African countries is facing and will continue to face daunting challenges over the next several years in terms of effectively participating and forcefully articulating its interests in the context of multilateral trade negotiations (WTO, ACP/EU Cotonou Agreement, AGOA, etc). As some degree of reciprocity is brought into these relationships, the country will be obligated to more seriously confront a number of questions relating to the cross and benefits of the particular trade negotiations. The November 2001 Fourth Ministerial Conference, for example, provided the mandate for negotiations on a wide range of subjects pertinent to the industrial sector (WTO 2002). The conference agreed, for example, to launch tariff-cutting negotiations on all non-agricultural products. The aim was to reduce, or as appropriately eliminate tariffs, including the reduction or elimination of tariff peaks and tariff escalation, as well as non tariff barriers in particular on products of export interest to developing countries. While average custom duties are now at their lowest levels after eight GATT Rounds, tariffs peaks and tariff escalation continue to restrict trade, especially on exports of developing countries. It was agreed that negotiations into these issues would take into account the special needs and interests of poor countries, and recognize that these countries need not match or fully reciprocate tariff reduction commitments by developed countries. In June 2000, the ACP countries and EU signed a partnership Agreement in Cotonou, Benin, to chart a new economic relationship between them. This relationship between

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them. This relationship will be governed by trade to be negotiated, starting September 2002, compatible with the WTO which will come in force on January 1, 2008. WTO-compatibility in the proposed arrangements could be achieved in two ways. First, EU could stop discriminating against non-ACP countries with similar levels of development thereby providing the same preferences. Second, EU could transform Lome preferences into free trade arrangements in accordance with Article XXIX of GATT/WTO agreements. The EU seems to favor the second approach. The Cotonou agreement proposes free trade areas (FTA) which would involve a liberalization of “sustainability all trade” among the parties over a “reasonable period of time” which is taken to be 10-12 years. The AGOA, signed into the USA law in May 2000, has two trade components. In the first component, a range of textiles and apparel goods from SSA countries enjoy duty and quota free access to the US market. The US has extended a GSP for qualifying SSA countries over a ten year period and expanded coverage to include petroleum products, apparel products previously subject to quotas under the MFA; and a range of other agricultural and industrial products. The increases import coverage from about 17% of Sub-Saharan African exports under GSP to 72% under AGOA (Mattoo et al, 2002). INTERVENTIONS A number of questions were raised following the presentation made by Prof. Mwega. One such question was raised by Mr. Makumba who sought to know whether the points highlighted in the current government industrialization strategy as articulated in sessional paper No. 1 of 1997 on “Industrial Transformation to the year 2020” and reiterated in subsequent development plans had been revised in the recently announced Economic Recovery Programme for the country. Regarding the various formula that have been floated for tariff reduction, Mr. Sabwa wondered whether there was one that was Kenya tailor made. Mr. Ndira, on the other hand, questioned the co-efficient that the researcher was proposing. Meanwhile, Prof. Okelo stated that the Ministries of Finance in the developing countries were concerned about the less of revenue. He suggested that we should be pushing for a formula where we are not losing. In the opinion of Ms Kamau, our negotiator in Geneva, Prof. Mwega’s research formula was going in the opposite direction. It was contrary to what was being advocated in Geneva at the moment. Prof. Mwega contented that one does not need to stick to a single position. It is important to look at various scenarios.

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Prof. Dominique drew the attention of the Participants to a document that had been prepared by ILEAP. The document is entitled “Negotiating Policy Brief No. 1 Market Access for Non-Agricultural Products Modalities”. The contents of the document include: Objectives and Back group; developing country goals and the Doha Mandate. An analysis of the Draft Modalities and Central Substantive Issues:

a) Tariff Reduction Formula b) Sectoral Tariff Elimination c) Other issues

Overview and Conclusions Annex: Non Exhaustive List of Appropriate Studies Other speakers who took the floor included Mr. Kimani who was concerned about the position that Kenya was likely to take with the EPAS and Mr. Mutunga who expressed concern about the loss of preferences. Ms Kamau concluded her intervention by urging the Researcher to go a step further, and guide the rest of the negotiators.

4. PRESENTATION AND DISCUSSION OF THE STUDY REPORT ON AGRICULTURE WITH SPECIFIC FOCUS ON CURRENT NEGOTIATIONS.

The Presentation was made by Mr. Jonathan M. Nzuma who had jointly prepared the paper with Dr. Hezron Nyangito, both of the Kenya Institute for Public Policy Research and Analysis (KIPPRA). The paper prepared under AERC Collaborative Research Project on African Imperatives on the New World Trade Order under the heading “Kenyan Agriculture’s Domestic Trade Regime and External Market Access conditions 1980-2000,” looks at the agricultural sector focusing on policy lessons and conclusions from past trade episodes in Kenya on the following issues.

a) Extent and response to Kenyan agriculture to liberalization of domestic trade regime

b) Extent of and response to previous external market access opportunities for agricultural exports

c) Areas and extent of possible future liberalization of the domestic agricultural trade and its likely effects.

d) Areas and extent of beneficial additional market access opportunities for agricultural exports and their likely effects.

The main findings of the study are summarized under:

1. Agricultural sector 2. Agricultural policies 3. Agricultural sector performance

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4. Domestic agricultural support services - Infrastructure (roads, railways, air transport, markets, energy, water.) - research and extension - financial markets (credit) - input supply

5. Domestic Regulatory Systems

- subsidies on outputs and inputs - duty and tax concessions - investment subsidies, promotion and assistance - safeguards measures - agricultural development programmes - tariffs - import prohibitions and licensing - anti-dumping and countervailing measures - standards - rules of origin

6. Impacts of Domestic Regime Measures on prices 7. Market access conditions for Kenyan products 8. Multilateral rules and impact of Agricultural performance

- market access - domestic support - export subsidies

9. Simulation of Trade Regime Conditions, Policy lessons and conclusions extent and response from liberalization of domestic trade in agriculture extent of and response to previous external market access opportunities for

agricultural exports areas and extent of possible future liberalization of domestic agricultural

trade regime and likely effects Areas and extent of beneficial additional market access opportunities for

agricultural exports and likely effects. INTERVENTIONS From the discussions that took place, the following questions were put across • Why should a simulation exercise be undertaken on EBAs? (Prof. Okelo) • Some of he conclusion from the study appear dangerous and unrealistic (Dr.

Dominique) • Some of the results demonstrated are significant, others are not. What is the reason

for this state of affairs? • Kenya’ position is to retain preferences but you are saying that erosion of

preferences will have no consequence. How is that? (Mr. Otieno) • To what extent could we use the BCG formulae to work out a list of strategic

products? (Angela) • Preferences. What is their significance in the whole scenario?

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• Kenya is doing well with respect to the export of horticulture. But we are self sufficient in production of dairy. Yet we are importing. How can we explain this state of affairs? (Dr. Kariuki)

• Intervention by Ms Kamau a) She took issue with some of the findings by the

Researchers. She felt that the researcher should go further. For instance, if linear formula is not recommended, what is the alternative?

b) On preferences, we are very much worried about the results of your analysis

c) The concept of strategic or special product requires further elaboration and analysis. Can the researcher assist us get somewhere?

d) How about the new special safeguard mechanism? e) It is being said that countries liberalize at the same time. Is

this realistic considering the fact that countries are not of the same level of development.

Response from Jonathan Nzuma (Researcher) Some of the questions could not be answered because they were not in our terms of reference when we did our study last year but did some updating this year. We were also not required to address a particular formula. As regards Dr. Kariuki’s question we are aware that our horticulture is doing well. This point is reflected in the bigger report. Session IV

5. DISCUSSION OF THE ELEMENTS THAT MUST BE INCORPORATED IN THE COUNTRY’S POSITION PAPER.

The discussion on this issue was led by Ms Anne Kamau, a Negotiator at our Permanent Mission in Geneva. The discussion was based on the Draft Cancun Ministerial Text circulated by the Chairman of the General Council on his won responsibility in close cooperation with the Director General under JOB (03)/150 dated 18 July 2003. The issues addressed in the Draft Ministerial Text include: TRIPS and Public Health: Agriculture Negotiations; NAMA negotiations; Services negotiations; Rules negotiations; TRIPS negotiations; Environment negotiations; DSU negotiations; S and D Treatment; Implementation; Investment; Competition; Government Procurement; Trade Facilitation; Small Economies; Trade, Debt and Finance; Trade & transfer of Technology; CTE report; TRIPS non violation; E-Commerce; Technical Cooperation; LDCs; Accessions.

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The Kenya negotiator had the following comments on these issues:

o Although the Ministers are being called upon to adopt modalities for further commitments in agriculture, this appears to be a remote possibility as no agreement has been reached on the modalities yet.

o The same can be said of the modalities for the negotiations on Market Access for Non-Agricultural Products. No agreement has been reached. Developing countries were advised to be extremely careful about this.

o With regard to services negotiations, it was noted that many developing countries, Kenya included, had not conducted assessment of trade in services with a view to discovering how they had benefited from commitments made earlier. For developing countries to be able to make informed choice/decision regarding further liberalization, an assessment of the nature envisaged would be critical.

Trips and Public Health In spite of arm twisting, the developing countries, believe that the December text, which was supported by the majority of the members of the WTO, was the best option. They also believe that the declaration on this issue was a matter of implementation rather than an issue for negotiation. Special and Differential Treatment (S&D) Developing countries had not achieved much on this issue. There was need to rethink whether or not the matter should be taken to the Committee on Trade and Development. Implementation –Related Issues and Concerns The best the developing countries need to do was to continue pressing for implementation of this decision was agreed at the Doha Ministerial. SINGAPORE ISSUES There was ample evidence that no explicit consensus will be achieved with respect to the launching of negotiations on the Singapore issues. Kenya is of the view that the negotiation process should be delayed since there was still lack of convergence on many of the issues that require classification as mandated by Ministers at Doha to warrant movement to the next phase. This is partly due to the wide disparity in experience and capacities that exist between members on these issues.

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In this regard, Kenya recommends that further technical assistance to the respective working groups is necessary in order to achieve sufficient convergence in understanding the economic implications of the issues. This level of convergence should form the basis of determining the modalities for members to adopt. As regards other Doha issues i.e. Debt, Finance and Transfer of Technology Ministers will need to come up with specific time frame within which to address the issues. In concluding her remarks, the Kenyan negotiator urged the Ministers to give priority to trade related issues, arguing that this was key to rebuilding confidence in the multilateral trading system. She also spoke of the Ministers having a fall-back position. They should always aim at striking a balance between maximum and minimum positions. To those who do the actual drafting of the country’s position paper, Mrs. Kamau had this to say, “You should not have a voluminous position paper. Use of bulleted points would serve to convey the message quite effectively. You also consider the language you employ in your draft.” Floor Discussions Prof. Dominique Njinkeu, Executive Director of ILEAP drew the attention of the Participants to a COMESA workshop that had been held in Nairobi, Kenya in May during which members of COMESA exchanged views but more importantly firmed up their position on various issues as part of the preparation for Cancun. He also made reference to a situation where people who must benefit from technical assistance are by and large not involved the design of the Technical Assistance. After an exchange of views, it was agreed that for technical assistance to be effective it must be demand driven. But Prof. Okelo was of the view that the above would only happen if the technical assistance was bound. He also alluded to the Kenyan Diaspora who could deliver assistance to the country if there was a conducive environment. SESSION V

6. EXCHANGE OF VIEWS ON THE SINGAPORE ISSUES. The lead speakers on this subject were Mr. Goh Chien Yen of the Third World Network, Geneva and Mr. Oduor Ongwen, Executive Director of EcoNews Africa, supplemented by some interventions from Mr. Ndirangu, Kenya’s Chief Negotiator in Geneva.

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At the outset it can be pointed out that the WTO’s Doha Ministerial Declaration has a section dealing with the four “Singapore Issues” i.e. relationship between trade and investment; interaction between trade and competition policy, transparency in Government Procurement, and Trade Facilitation. On these issues, the Ministers decided there negotiations will take place after the Fifth Ministerial on the basis of a decision to be taken, by explicit consensus, on modalities of negotiations. In the period until the Fifth Ministerial, the working groups (on three of the issues) or the Goods Council (in relation to trade facilitation) would focus clarification of issues, including some issues mentioned in the Doha Declaration. By July the working groups and the Goods Council had completed their meetings before the Cancun Ministerial. It is clear that there wide divergence of views on many of the issues that have undergone the process of clarification. On Trade and Investment: the Working Groups having had its final pre-Cancun Meeting. It is evident there is no Cancun understanding on all the issues that have undergone the process of clarification after Doha. Therefore there is at present no basis for a discussion on modalities or a consensus on modalities. Issues for clarification include: (those mentioned in the Doha Declaration) • Scope and Definition • Transparency • Non-discrimination • Modalities for pre-establishment commitments based on GATS, type positive list

approach development provisions • Exceptions and balance of payments safeguards • Consultation and dispute settlement between members.

Other elements for clarification • Obligations of foreign investors • Obligations of home governments • Other issues

Trade and Competition Issues. There has been divergence of views among WTO Members on the issues considered by the working groups on the interaction between Trade and Competition Policy (WGTC) after the Doha Ministerial. Thus it has not been possible for a discussion on the modalities for negotiations. Ministers at Cancun should thus take the option of directing that further discussions take place at the working group. Clarification of issues in the working groups

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• Core principles

- transparency - non-discrimination - procedural fairness

• Provisions on hard core cartels • Voluntary cooperation • The needs of developing countries

The workshop was informed that there were also a large number of clarifications which need to be made in the other Singapore Issues, namely Transparency in Government Procurement and Trade Facilitation. The general consensus was that the timing was not ripe for these issues to be debated with a view to turning them into multilateral trade arrangements. Apart from Mr. Ndirangu, Kenya’s Chief Negotiator who was a principal resource person at the workshop, Mr. Goh Chien of the Third World Network, Geneva, and Mr. Oduor Ongwen, the Executive Director of EcoNews Africa, Nairobi, made detailed present actions on Singapore. According to the speakers, the civil society organizations had written to the Director General of the WTO to let him know about their views regarding the New Issues. They did not see any tangible benefits to the developing countries discussing the Singapore Issues which would add extra burden to them. They saw these issues as a direct way for developed countries getting market access for their products in markets of developing countries. Among the participants who made interventions from the floor were Prof. Okelo, Dr. Halima, Mr. Ndirangu, Mr. Kinuthia, Dr. Ngeno, Mr. Kimani, Prof. Dominique Njinkeu, and Mr. Mutunga. However, in a document that was circulated a number of issues are raised, but focus on transparency and participation in the WTO. What is wrong with the WTO Process? General • Unfair Practice of the consensus system. • Overloaded agenda and too many meetings put resource deficient developing

countries at a disadvantage. • Political pressure applied to developing countries. • Difficulties or impossibility of changing rules.

Problems in the process linked to preparations for Ministerial Conference. • ‘Informal’, undocumented and Exclusive meetings.

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• Documents not distributed in time • Meetings held at short notices. • WTO discussions, negotiations becoming Chair driven instead of Member driven. • Mini-ministerial creating a disguised as un-elected “steering group” • Transmission to Ministerial Conference of drafts that are not approved by Members

etc.

7. ESTABLISHMENT OF WORKING GROUPS AND THEIR REPORTS

1) In order to facilitate the work of the workshop and possibly come up with recommendations on which some follow up would be made, a total of 4 working groups were set, based principally on the subjects/ topics that were covered, as well as others that appeared to warrant priority attention. The working groups established were those relating to

Agriculture Trade in Services Manufacturing and industrial tariffs Technical assistance and Capacity Building

2) Terms of reference

Identify the issues i.e. areas of concern/ interest Identify/workout the priorities Determine the process i.e. Work out the strategies on how to address the

issue(s) 3) Deliberations, outcome and Recommendations of the various working groups.

A. WORKING GROUP ON AGRICULTURE

Group Members

1. Mr. Nzuma M. J KIPPRA 2. Mr. P.K. Nyikuli Department of External Trade (MTI) 3. Mr. M. Kimani Department of Industries (MTI) 4. M.M. Otieno Department of External Trade (MTI) 5. Dr. Halima Noor Trade Watch Africa 6. Ms Janet Abilla Department of External Trade 7. Mr. J. P. Kinuthia Consumer Information Network 8. Ms Anne Kamau Permanent Mission of the Republic

of Kenya to the UN- Geneva 9. Mr. Cosmas Kyengo 10. Dr. Wariara Kariuki JKUAT 11. Mr. Joshua Mutunga EPC 12. Mr. Ngare Zachary

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13. Ms Miriam Omolo AERC RECOMMENDATIONS Market Access

a) Tariffs Kenya ha opened up its market by the removal of supportive and protectionist measures. However, on the other hand, high and complex tariffs continue to be a major barrier in accessing developed countries markets. Kenya therefore proposes for:

i) Modified Uruguay Round formula which should be able to address the various tariff peaks and escalations applied by members, while at the same time, it should not drastically reduce the already low tariffs in the developing world.

ii) Harmonization of tariffs on primary and processed products to address tariff escalations in the processed production.

Special Products A positive development in the chairman’s draft modalities paper is the need to designate some products as strategic o the grounds of food security, rural development, poverty alleviation and sustainable livelihoods. In view of the above Kenya proposes that:-

i) Developing countries should be allowed to self declare special products under the negative list approach.

ii) Considering the strategic importance of these products, they should automatically be eligible to the proposed simple special safeguards mechanism (SSM) for developing countries.

iii) The special products should be exempted from tariff reduction commitments and should further be de linked from any tariff reduction formula.

Special Safeguard Mechanism Application of SSG provisions by developed countries has resulted in increased use of tariffs, which are above bound levels in response to surges in imports or decline in import prices. Kenya therefore proposes that:

i) the current SSG under Article 5 should cease to apply from the first date of implementation and an new simple special safeguard mechanism for developing countries be put in place.

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ii) The special safeguards mechanism (SSM) should not be based on the current Article 5.

iii) The special safeguards mechanism (SSM) to be put in place should be both price and volume trigger.

iv) The special safeguards mechanism (SSM) should not also be linked to the tariff reduction formula.

v) It should also apply to products from all sources Preferences

i) without prejudice to the discussions on the tariff formula, the preferential benefits accorder to developing countries should be preserved to the least and or a compensatory mechanism be developed to cater for any loss.

ii) Preferences are considered to be trade issues and we propose that they should be handled by the WTO and not by the Breton woods institutions.

iii) Preferential Market access should not be replaced by technical assistance. iv) Preferences should be negotiated for a longer time frame for between 15-20

years. v) Qualifying products to account for 5% instead of 20% of merchandize of trade

of the beneficiary. Tariff Quota and Quota Administration

i) Under tariff quota and tariff quota administration, Kenya proposes that any tariff rate quota expansion must give preferential allocation to African countries.

State Trading Import Enterprises Kenya proposes that developing countries should be given special and differential treatment given the role they play in these countries (e.g. social functions). Non Trade Concerns Kenya proposes that issues such as GI, precautionary principle and labeling belong to other bodies which should handle them appropriately. Export Competition a) Export Subsidies Export subsidies displace exports thereby, affecting small scale farmers and producers, whose Government have no resources to compete against the treasuries of developed countries. These export subsidies undermine food security by promoting price variability and uncertainty, creates artificial shortages, low prices and poor quality of imported food stuffs. Excessive budgetary resources are usually allocated for subsidies because of

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the circumvention of existing rules by some developed countries leading to market distortion. Kenya therefore proposes that:-

i) export subsidies should be phased out or eliminated in the first year of implementation

Export Credits

i) Kenya wish to propose that export credits with an element of subsidies should be eliminated (e.g. payments of indemnities.)

ii) Special provisions for export financing programmes to least developed countries and NFIDCs should be developed.

iii) The repayment period in developing countries should be 180 days. Food Aid

i) Food aid which does not comply with the bone fide definition should be prohibited.

ii) Food aid should be demand driven i.e. should be based on a request by a country and by the UN institution mandated to administer such programmes

iii) Food aid should not be used as a method of surplus disposal and for commercial purposes.

iv) Transparency and notification of all food aid activities by the net food exporting countries in accordance with the UN FAO Surplus Disposal rule. This should be made legally binding.

Domestic Support

i) Amber Box In recognition of the Doha mandate on “reductions of, with a view to phasing out all forms of export subsidies; and substantial; reductions in trade distorting domestic support”. Kenya proposes total elimination of the final bound total AMS from the first year of implementation.

ii) Blue Box Kenya maintains that all blue box payments be included in the calculation of the current total AMS and the same be subjected to a reduction commitments.

iii) Green Box

i) there should be a review and re-definition of measure in the green box especially with regard to par 5, 6 and 7 of Annex 2 Article 6.2 of the AOA,

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which should be transferred to the amber box and the same be subjected to reduction commitments.

ii) Any direct payments in the Green box should be capped to address dumping that may result from support measures provided under this box.

iii) Introduce strict policy criteria in the Green box to avoid circumvention iv) The de-minims level of 5% under sub-paragraph (a) of Article 6.4 of the AOA

should be eliminated by first year of implementation and the 10% de-minims level for developing countries should be maintained, with a flexibility to revise it up wards if need arises.

v) Kenya supports the expansion of Article 6.2 as reflected in the Harbinson’s draft text, however, maintains that this expansion should not be used as a trade off for market access given the limited resources available to support agriculture.

Peace Clause The peace clause which protects developed countries while pursuing their unfair trade distorting policies has restricted member from pursuing dispute settlement in cases of trade distorting domestic support measures and subsidies. From the start of the negotiations, Kenya has maintained that the current peace cause should not be renewed, and this remains her position. Special and Differential Treatment (S & D) With regard to S & D treatment, Kenya asserts that the S & D provisions should be an integral part of all elements of negotiations and should be based on concrete economic parameters (e.g. development threshold) and not mere longer implementation periods and lower reduction commitments. Further, a mechanism should be put in place to cushion the NFIDC’s and least developed countries from the possible negative effects of these reforms. Other Issues Kenya is concerned that the chairman has been preparing the modalities paper on his own responsibility. We propose that the modalities paper should be prepared in consultation with all WTO members. The modalities paper should not be attached to the draft Cancun Ministerial Conference meeting as indicated by the Chairman without prior explicit consensus by the Members. B) WORKING GROUP ON TRADE IN SERVICES Group Members

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1. Dr. Samuel Nyandemo University of Nairobi 2. Ms Roselyn Amadi AG Chambers 3. Douglas Mburia Commissioner of Insurance 4. Naftali Ndugire NEMA 5. Dr. Moses M. Ikiara KIPPRA 6. Achieng Jackline NEMA 7. Jacinta Maganda KIFWA 8. Elizabeth Miguda DET 9. E. M Sabwa KIFWA

Key Services Sectors

a) Tourism b) Transport c) Energy d) Professional Services e) Education f) Communication

1) Identification of Concerns Concerns

♦ Enhancement of Market Access in areas /sectors where we have comparative advantage or export potential.

♦ Enhancing our competitiveness through investment and transfer of technology. ♦ Allowing policy space so that we can design policies consistent with our developed

objectives. ♦ Housing proper regulatory capacity ♦ Technical Assistance which can develop capacity to carry out needs assessment to

help understand nature of sectors and thereby determine a) what to negotiate b) speed of negotiations

2) Strategies

Market Access - Push developed countries / other members to honor commitments already

made as well as offer more meaningful commitments - For travel advisories, multilateral issuance - Subjection of global distribution systems operations to multilateral disciplines

and dispute settlement mechanisms so as to reduce ant-competitive behaviour.

3) Relaxation of restrictions of movement of natural persons –countries should offer commitments on issues of inter-alia

- visa requirements

36

- economic needs test - mutual recognition agreement

4) Assessment of compliance to existing commitments –inadequate capacity should be addressed through increasing personnel. • For all strategies, we should pursue a regional approach to the negotiations • Improvement of GATS classification • Recognition and credit for liberalization undertaken under GAPS e.g.

tourism • Assessment of compliance with existing notification requirements before

adding on any more obligations. • Access to information network

Prioritization of Concerns

1. Enhancement of market access in areas /sectors where we have comparative advantage and export potential

2. Relaxation of restrictions on movement of natural persons 3. Assessment of compliance with existing requirements before committing to

additional obligations 4. Technological Assistance as under GATS Act IV, to develop capacity to carry out

needs assessments. C) WORKING GROUP ON MANUFACTURING SECTOR. Members

1. Prof. Mwega 2. Ndirangu Nelson 3. Eng. Mokaya 4. Ndira

Areas of Interest (Products of export interest to Kenya) Tariff Peaks and Escalation – 64 % in EU Market

- 18% Us market Product Coverage: - Food Manufacturing

- Clothing - Textiles

Preferences

With the MFN come down, the preferences will be eroded Most likely their will be trade diversion

37

Products of export potential can be increased in the present preference coverage.

Identify countries (developing countries) that can expand their scope of preferences

Compensate mechanism in case where the tariff on preference receiving products is zero and the MFN tariffs on the same reduced. E.g. ISIC 341 the preference tariff is zero, in such a situation if the MFN tasks are reduced, the margin will almost be zero.

Formula Approach

Does not provide flexibility If there is going to be any formula, it should be modified and incorporate factors

that will give flexibility to countries to stimulate Industrial growth. (African countries)

No objective criteria of how to arrive at the formula. o The formula does not incorporate the demand of

less than full reciprocity. E.g. the co-efficient 3 is going to be a unique factor applicable to all members.

o Overall in terms of percentage reduction, developing countries will be giving more.

Sectoral Tariff elimination

o Doha did not envisage sectoral tariff elimination o Do not support sectoral tariff elimination and African countries should not be

subjected to sectoral tariff elimination. o Should not be part if negotiators. o Where sectoral tariff is elimination is undertaken, the preference receiving

countries should be compensated for the loss. o Kenya does not support the inclusion of the sectors suggested in the sectoral

tariff elimination. Non-tariff Barriers

The issues relating to NTBs should be dealt with under the Negotiating Committee on Non Agricultural products.

Transparency in administering standards and technical regulation. Technical assistance in undertaking risk assessment applying appropriate

measures to meet and prevent any risk likely to arise. Scope of binding Way forward / Strategies

38

African Trade Ministers to reject in total the Draft Modalities Paper transmitted by the Chairman

Tariff peaks and escalations on product of interest to Kenya must be addressed.

Special and Differential Treatment should be based on objective antenna and form integral part of negotiators. As a special and differential treatment, the developing countries will start implementation after developed countries have implemented theirs in full.

Studies and capacity building should be extended to all developing countries Technical assistance related to administering and compliance with non-tariff

barriers (NTBs) requirements to be availed to developing countries. To this end, technical assistance in undertaking risk assessment and applying appropriate measures to correct and prevent risks likely to arise should be provided.

On the scope of binding, developing countries should be given flexibility to choose for themselves which products they want to bind and what levels that is consistent with their development objectives.

Compensation mechanism for developing countries losing on preferences and increasing the number of developed countries participating in the preference- China, Korea, and Japan.

Need to improve the Rules of Origin and easing out TBT & SPS requirements. Study Areas

o Economic background of preference –utilization factor of GSP and other preferences.

o Export competitiveness of manufacturing sector along side market entry barriers in export markets.

o Impact of liberalization on employment including social implication o Revenue implication of tariff reductions and safety net mechanism that can be

taken by the government. o KTTP to take up these country needs.

D) TECHNICAL ASSISTANCE AND CAPACITY BUILDING: Group Members

1. Prof. Jasper A. Okelo 2. Mr. Victor Mageto 3. Mr. Duncan Mwangi

The group identified the following as areas of concern: Capacity Building Needs:

39

a) Training Needs on Multilateral Trading Systems on the following areas to build capacity in:

Understanding of Agreements, issues, process and implications to our economy.

Negotiations Internship in Geneva

b) Support Geneva office by more effective participation and preparation at home and in Geneva in the following way:

In Geneva – add additional trained staff to make office more effective Support the Geneva team by increased effective participation from Head

Quarters all the time.

c) Private Sector to be well informed and prepared in the Multilateral Trade Systems issues to be negotiated.

d) Civil Society to be well informed/ trained to participate effectively in the process

for the good of the country.

e) Institutional Capacity Building is necessary

Ministry of trade and Industry’s NCWTO to be structured is such a way as to enable NCWTO become International Trade Negotiating Body and enable it become effective in research and analysis of country positions

Increase space/ facility to create space with sufficient equipment e.g. Computers;

Create research Team four amongst the NCWTO members to link up with

research Organizations/ institutions to avail information for policy use while preparing country positions.

Support and encourage other policy Research Institutions to have more people

undertaking research in the MLT system related issues. Training institutions and people identified for use are as follows:

Locally trained individuals can be used to train others; Local Institutions of Research/Training familiar with WTO trade issues to be used

as training institutions; WTO training programmes (Regional and Geneva); Other institutions abroad.

Technical Assistance Need The above training and capacity building needs required facilitation through technical needs with the objective of empowering Kenyans in preparing policy papers and country trade negotiation positions.

40

The country should prepare requests for technical Assistance from international, regional and local sources like KIPPRA, UNCTAD, WTO, ITC, and ILEAP. As technical assistance is made available, the same must be continued. Such coordinated arrangement and effective utilization requires establishing a structure that is made responsible for ensuring that the assistance is used for the purpose for which it was intended. SESSION VII

8. STRATEGIES AND PLAN OF ACTION FOR ENHACING KENYA`S PARTICIPATION IN THE WTO AND ALL THE TRADE NEGOTIATING COMMITTES

Presentation by Prof. Dominique Njinkeu, Executive Director of ILEAP Prof. Njinkeu started his presentation by making reference to the joint ITC/UNCTAD/WTO which he said had achieved a lot in terms of building capacity in the countries where the Programme had been initiated and was operational. This provided a good starting point. He expressed a view that a time had come when we should move away from reacting to that of being proactive. In this regard he spoke of the need for setting up a structure a fast channel mechanism through which analytical support would be made available at short notices. Such mechanism would probably need to be connected to the policy making, policy formulation system. But what is most critical is its ability to deliver. He recalled the excellent work that was being done at the AERC of building credible capacity for policy oriented research, generating research results for use by policy analysts and policy makers, promoting of linkages between research and policy and above all, encouraging retention of high quality researchers. Referring to his new off shot at ILEAP, Prof. Njinkeu briefed his audience on its objectives and activities, among which are • Provision of rapid and timely analytical response to issues of interest to

beneficiaries, in carefully selected areas. In the short run, these areas include the UR built in agenda comprising agriculture and services, the implementation of UR agreements, the continuation of past reforms in non-agricultural products and the negotiations with developed countries and regions such as the EU and the US.

• Provision of advisory support including preparation of negotiation positions and analysis/ clarification of negotiations position

• Capacity building to provide the above by advisors from developing countries. These capacity building activities concentrate on intermediate and senior analysts in and outside governments who already have the basic skills. The focus is on the following:

41

• Intelligence gathering and processing • Preparation of position papers, analysis of negotiation proposals and assessment

of options • Formulation and use of negotiation techniques • Forward looking offensive and defensive approaches to the negotiations

COMMENTS Following Prof. Njinkeu’s presentation the participants made some observations as highlighted below

1. Prof. Okelo – we need to do more than we have done so far. The Ministry should constitute such a body or institution of researchers and scholars. We should be responsible and accountable for whatever we do. Our Government /Parliament should be made aware of what we are doing. With our analytical research findings we should be able to resist arm twisting of whatever nature. We should not shy in approaching our head of state and requesting them to take a position that is in the interest of all.

2. Dr. Halima – There should be a Parliamentary angle to what we are doing. We should involve the Parliamentarians to our future workshop in order to abreast them on what is happening.

3. Mr. Nzuma : we have the capacity, but what we lack is coordination and commitments

4. Mr. Kimani: the Chairman of the NCWTO should brief the Hon . Minister on what is happening, what has happened and what is likely to happen There is also need for those in the Secretariat to check on the internet regularly and brief the Minister as appropriate.

5. Mr. Otieno: - already a Task Force on Agriculture exists. It meets as often as it is necessary.

6. Prof. Okelo: but such a Task Force needs to be institutionalized for it to be effective. It must have the structures that allow for improved response mechanism – a kind of Rapid Response Mechanism.

7. Anne Kamau: When is such a structure going to be set up? Its establishment is long over due.

8. Prof. Njinkeu: there should be an evaluation immediately after Cancun. We should then be able to define the issues and possibly put up a structure.

9. Mr. Manyara: As regards the status of the NCWTO, the issues raised here are important and practical. We are still consulting. Hopefully, we will come up with something workable soon.

PRESENTATION BY PROF. JASPER OKELO (Strategies and Plan of Action for enhancing Kenya’s Participation on the WTO and other countries.)

1) Need for effective preparation.

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This requires continuous Research/ analytical work to inform on the process (Kenya’s specific analysis for Kenyan economy).

Ministry of Trade and Industry must be effectively linked to policy Research Institution, Universities etc to facilitate such work.

Can also use facilities available internationally through UNCTAD, JITAP

II. Ministry must establish the above support activity and make it continuous as the process of negotiation itself is.

Establish a Team of individuals in the NCTWO to be responsible for linking up with Research Institutions/ individuals doing work related to the WTO work Programme.

Make the same team responsible for collecting and bringing on board researched/analyzed work to inform on the country positions on all Kenya’s policy concerns.

This same team should also be responsible for organizing conferences/workshops where the researchers discuss their findings with the stakeholders/con summers of research- for policy formation-regularly.

Most importantly, the work from this group must always be forwarded to Geneva to support their negotiations for the country.

It is important that this structure be established as soon as possible, and not later

than immediately after the Ministerial Conference at CANCUN, Mexico.

9. PRESENTATION BY MS ANGELA WAUYE OF THE MINISTRY OF AGRICULTURE

In her presentation Ms Wauye announced that her Ministry had set up a task force whose aim was to come up with a definition of what is meant by strategic products in the context of the Harbinson Draft on modalities. She pointed out that the Task force had prepared a tentative list which was still being fine tuned. Among the list of the products to be included under Special Products are: Maize, wheat, rice, sugar, tea, coffee, cotton, honey and honey products, and pyrethrum. Etc To qualify for an SP status a product must inter alia contribute towards food security rural development and poverty alleviation.

10. STATEMENT OF THE CHAIRMAN OF THE NCWTO ON THE WAY FORWARD.

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In the absence of the Permanent Secretary who is the Chairman of the NCWTO, Mr. Elijah B. Manyara, made a statement. He pointed out that the Ministry of Trade and Industry was very happy to be associated with the workshop. He himself had wanted to religiously attend and participate in the proceedings of the workshop. But due to other pressing assignments, he had not been able to attend all the sessions. Mr. Manyara informed the meeting that the Permanent Secretary was away in South Africa. The Minister was also away on a similar mission. As head of the WTO Division which coordinates the functions of the NCWTO he was scheduled to join the Permanent Secretary and the Hon. Minister at their busy schedule in South Africa and Lesotho. Saying that the Ministry had seriously embarked on preparations for the Cancun Ministerial Conference, Mr. Manyara recalled an episode in Doha, Qatar when after the Doha Ministerial Declaration was adopted, he saw the then Director General of the WTO, Mr. Mike Moore jumping and dancing. He was celebrating the fact that the Ministers had agreed to launch a new round – the Doha Development Agenda. Unfortunately, what is happening on the ground right now is not matched by the joy and jubilation that was witnessed at Doha. The negotiating deadlines which had been agreed upon have been passed. No consensus has been reached on the formula for tariff reduction elimination of export subsidies and tariff escalation or the phasing out of domestic support. The divergences are still large. In the circumstances, it is unlikely that developing countries will make any commitment. On the contrary we would want to see how far we have done. To what extent have we benefited? To address these issues, Mr. Manyara says that they are involved in a new approach. The Ministry is now focusing on presentations from all sectors and all stakeholders, unlike in the past when Government Officers could lock themselves in an office and prepare the country’s position. He emphatically states that we must understand and appreciate where we are. We must understand the proposed modalities whether in Agriculture or non-agricultural products. “If we go to Cancun without understanding these things, it will be like someone giving you a rope to hang yourself. You will then need Prophet Daniel to extricate and save you. What is going to happen will have far reaching repercussions. So we have to be on the look out. Another area that we need to look at is capacity. Capacity is critical; we need to set up a rapid response mechanism (or team) to respond to situations as they emerge. In addition, the process of meeting should be institutionalized. There is need for the Geneva Team to be meeting with those from the capital or regular basis, say after three months. It is also important to take stock of the technical assistance we receive from time to time.

44

Today’s deliberations are very useful, as they will help us prepare the country’s position in a manner never experienced before. In this regard, I must express the Ministry’s gratitude and appreciation to the AERC for what it has done in bringing us together to deliberate and discuss on issues that are of great interest to our country. I take this opportunity to thank everybody for their active involvement in the activities and deliberations of this workshop.”

11. VOTE OF THANKS BY MR. E. M. SABWA. In his speech, Mr. Sabwa said he was pleased to have been asked to give a vote of thanks. In this regard, he paid glowing tribute to all the participants without whose presence and participation the workshop would not have been such a resounding success. He expressed special thanks to the resource persons for their excellent work. He also thanked the Ministry of Trade and Industry for on gracing the workshop and for its active involvement in all matters related to the workshop. He also thanked Mr. Makumba for the exemplary manner which he had spearheaded the conduct and preparation of this workshop. He wished the participants all the best and hoped that they would continue reflect on the deliberations of the workshop. He encouraged the sponsors of the workshop to continue assisting the country in matters of this nature.

12. CLOSING REMARKS BY LAWRENCE PCL MAKUMBA Mr. Makumba, the principal organizer of this workshop, paid special tribute to Prof. Dominique Njinkeu, the AERC, and the entire team for the support and help they had given to him during the organization of the workshop. He thanked the Ministry of Trade and Industry for its support. He singled out Mr. Manyara whose cooperation he valued so much. He thanked Mr. Ndirangu, Kenya’s Chief Negotiator and his deputy Ms Anne Kamau, for their excellent contribution and input during the workshop. He urged them to continue with the good work. He thanked the resource persons namely Prof. Mwega, Prof. Okelo, Dr. Nyandemo, Dr. Ikiara and Mr. Nzuma for their excellent work. There is however, the outstanding issue of establishing a network between our researchers, scholars, policy makers and implementers and hoped that the dialogue that had already been initiated would continue. He thanked the Chairmen and Rapporteurs of various working groups.

45

He thanked his team of rapporters Mr. Ndira and Mr. Otieno, and hoped that they would produce their report at the earliest opportunity. He thanked the civil society, especially Karin Gregow and Oduor Ongwen for their active participation in the workshop. Above all, he thanked all the participants for their very active and lively participation in the workshop, in spite of the short notice. He hoped that they would continue to reflect on all the key issues deliberated upon during the workshop. He looked upon to an opportunity when they would meet again in the near future.

13. CONCLUSIONS AND OBSERVATIONS The workshop was an important eye opener. It provided a forum for dissemination of the findings of studies which had been selected on the basis of a needs assessment and on the basis of what the country saw as priorities. It cannot be denied that the participation at the workshop was frank, candid and sincere. Many lessons were learnt. Of course there is some considerable capacity, but this needs to be harnessed. There is also plenty that both the researchers and the “practitioners” could learn from each other. For the picture to be complete, the two need each other. To sustain the momentum of the initiative that has been taken, there appears to be an imperative need for setting up a structure for continuing the dialogue. This is a priority that must be taken on board as soon as possible. Both ILEAP and the AERC will continue to play a critical role in the realization of this goal. The proceedings of the workshop on 6 and 7 August 2003 must be seen as a beginning of a long term sustainable process. ANNEX I PROGRAMME FOR THE NATIONAL POLICY WORKSHOP ORGANIZED BY THE MINISTRY OF TRADE AND INDUSTRY IN COLLABORATION WITH THE AFRICAN ECONOMIC RESEARCH CONSORTIUM (AERC) IN THE CONTEXT OF AERC COLLABORATIVE RESEARCH PROJECT –“AFRICAN IMPERATIVES IN THE NEW WORLD TRADE ORDER.” VENUE: NAIROBI SAFARI CLUB {LILLIAN TOWERS}

46

SPONSOR: AFRICAN ECONOMIC RESEARCH CONSORTIUM [AERC] DATES: 6 - 7 AUGUST 2003. DAY ONE – [6 AUGUST 2003] 8:30 – 9:00 Registration 9:00 – 9.45 Brief Remarks by the Permanent Secretary, Ministry of Trade

and Industry. –Mr. Alex Keter Brief Statement by a Representative of AERC.

Adoption of the Agenda and program of work. Session I 9:45 – 10:45 Overview on the state of Play of the Trade Negotiations in

Geneva. Mr. Nelson Ndirangu – Kenya’s Chief Negotiator -Permanent

Mission of the Republic of Kenya to the United Nations in Geneva.

10:45 – 11:15 COFFEE / TEA BREAK Session II 11:15 – 12:15 Presentation and Discussion of the Study Report on

Trade in Services Sector with focus on the status of the current Negotiations

Dr. Moses Ikiara and Dr. S Nyandemo 12:15 –13:15 Presentation and Discussion of the Study Report on

Manufacturing in Kenya: Imperatives in the New World Trade Order.

47

Prof. F. Mwega 13:15 – 14:15 LUNCH BREAK Session III 14: 15 – 15:15 Presentation and Discussion of the Study Report on Agriculture

with specific focus on the current Negotiations Mr. Jonathan Nzuma 15:15 –15: 30 COFFEE /TEA BREAK Session IV 15:30 – 16:30 Discussion of the Elements that must be incorporated in the

Country’s Position Paper Ms Anne Kamau - Negotiator –Permanent Mission of the

Republic of Kenya to the UN- Geneva. 16:30 – 17:00 Questions and Comments END OF DAY ONE DAY TWO [7 AUGUST 2003] Session V 08:30 – 08:45 Review and Recap of the Proceedings of Day One Workshop Rapporteurs 08:45 – 10:00 Exchange of views on the Singapore Issues

Panelists: Mr. N. Ndirangu – Permanent Mission of the Republic of Kenya to the UN– Geneva Mr. Oduor Ongwen – Executive Director – EcoNews Africa Goh Chien Yen - Third World Network –Geneva.

10:00 – 10:30 TEA /COFFEE BREAK 10:30 – 12:45 Working Groups in Session

a) Agriculture b) Trade in Services c) Manufacturing

12:45 – 14:00 LUNCH BREAK

48

Session VI 14:00 – 14:45 Presentation of the Reports by the Various Working

Groups Session VII 14:45 – 15:45 Strategies and Plan of Action for Enhancing Kenya’s

participation in the WTO and in all the Negotiating Committees - Prof. Dominique Njinkeu – Executive Director –ILEAP - Prof. Jasper A. Okelo - UON

15:45 – 16:00 Statement by the Chairman of the NCWTO on the Way

Forward. The Permanent Secretary or His Representative. Mr. Elijah B. Manyara – Senior Assistant Director and Head of WTO Division

16:00 – 16:30 Closing Remarks Vote of Thanks and Closure of the Workshop. 16:30 – 17:00 TEA/ COFFEE & DEPARTURE AT OWN PLEASURE. ANNEX I LIST OF PARTICIPANTS {DAY ONE} 6 AUGUST 2003

49

ANNEX II LIST OF PARTICIPANTS [DAY TWO] 7 AUGUST 2003 No. Name Title and

Organization

Telephone Contact Address E-mail

1. Dr. Samuel

Nyandemo

Lecturer –UON O722 819 370 Box 30197, Nairobi smnyandemo@yahoo.com

2. Dr. Moses M.

Ikiara

Senior Analyst –

KIPPRA

2719933/4 Box 56445, Nairobi mmikiara@kippra.or.ke

3. Prof. Francis

Mwega

University of Nairobi 334244 ext 28530 Box 30197, Nairobi

4. Nzuma M.

Jonathan

Researcher- KIPPRA 2719933/4 Box 56445, Nairobi Nzuma@kippra.or.ke

5. Nelson M.D.

Ndirangu

Commercial

Counsellor –Kenya

Mission- Geneva

Box 43137, Nairobi nndirangu@hotmail.com

6. Kennedy

Onchuru

Plant Inspector-

KEPHIS

4440087 Box 49592, Nairobi kephis@nbnet.co.ke

7. Anne Kamau Commercial Attaché 1-3 Avenue de la Pair Annekamau621@hotmail.com

50

No. Name Title and

Organization

Telephone Contact Address E-mail

- Kenya Mission -

Geneva.

1246 Geneva

8. Dr. Dominique

Njinkeu

Executive Director-

ILEAP

1 416 946 5796/

1416 968 2847

78 Queens Park ON

M5S2C5

Dominique.Njinkeu@ileapinitiative.com

9. Elijah Manyara AG. Deputy Director

, MTI

Box 43137, Nairobi kextrade@africaonline.co.ke

10. Oduor Ongwen Executive Director-

EcoNews Africa

2721076/99 Box 10332-00100,

Nairobi

Ongwen@econewsafrica.org

11. Josephine Njeri Administration

Assistant- MT&I

331030 Box 43137, Nairobi.

12. H. K Ndoka Exe. Assistant.

MT&I

315048 Box 43137, Nairobi kextrade@africaonline.co.ke

13. Janet Abilla ETO, MT&I 331030 Box 43137, Nairobi kextrade@africaonline.co.ke

14. Elizabeth

Miguda

External Trade

Officer, MT&I

315001 Box 43137,Nairobi kextrade@africaonline.co.ke

15. J. G.Muraya Senior Trade Officer,

MTI

331030 Box 30430, Nairobi jgmuraya@yahoo.com

16. Peter Nyikuli Trade Development 331030 ext 2146 Box 43137, Nairobi. Pnyikuli3@yahoo.com

51

No. Name Title and

Organization

Telephone Contact Address E-mail

Officer, MT&I

17. George Gachoka Trade Officer, MT&I 331030 Box 43137, Nairobi. geogashoka@hotmail.com

18. George Ndira Industrial

Development

Officer, MT&I

0722 258536 Box 43137, Nairobi. gndira@yahoo.com

19. Mueni Kiio Programme Officer,

Action Aid Kenya

4440/440/4/9 Box 42814, Nairobi. muenik@actionaidkenya.org

20. Duncan Mwangi Ass. Director, MT&I 020 331030 ext

2011

Box 30430, Nairobi. dwaiguchu@hotmail.com

21. M. M. Otieno Trade Officer, MT&I 331030 Box 43137, Nairobi. kextrade@africaonline.co.ke

22. Judith Otieno Trade Development

Officer, MT&I

315001 Box 43137, Nairobi. kextrade@africaonline.co.ke

23. Kamanu Simon Trade Officer, MT&I 331030 Box 43137, Nairobi. kextrade@africaonline.co.ke

24. John P. Kinuthia Policy Analyst ,

Consumer

Information Network

254-20-781131 Box 7569, Nairobi cin@insightkenya.com

25. Douglas Mburia Commissioner of

Insurance

330451/5 Box 43505 -00100,

Nairobi

commins@skyweb.co.ke

52

No. Name Title and

Organization

Telephone Contact Address E-mail

26. Roselyn Amadi Senior Principal

State Counsel, AG

Chambers

227461 ext 076 Box 40112, Nairobi roselynamadi@hotmail.com

27. Naftali Ndugire Environment

Economist, NEMA

608999 Box 47146, Nairobi Njmn100@yahoo.com

28. Fatuma

Mohammed

NEMA Box 47146, Nairobi Famzahra80@yahoo.co.uk

29. Achieng Jackline Trainee, NEMA Box 47146, Nairobi. jaqxaa@yahoo.com

30. Joshua Mutunga Ass. Manager,

Export Promotion

Council

228534-8 Box 40247, 00100

GPO, Nairobi

jmutunga@cbik-or.ke

31. Victor Mageto Examiner, KIPI 60221011 Box 51648, Nairobi kipi@swiftkenya.com

32. Michael Kimani Snr. Industrial

Development

Officer, MT&I

Box 30418, Nairobi

33. Jasper Okelo Lecturer- UON 0722 330 983 Box 30197, Nairobi jasperokelo@yahoo.com

34. Jacinta Maganda KIFWA 0722 738 794 Box 62947, Nairobi

35. Dr. Esther Manager, IPC 221401-4 Box 55704, Nairobi ipckenya@nbnet.co.ke

53

No. Name Title and

Organization

Telephone Contact Address E-mail

Chelule

36. Dr. Wariara

Kariuki

Snr. Lecturer,

JKUAT

067 52711/52200 Box 62000, Nairobi wariarak@yahoo.com

37. E. M. Sabwa National Secretary,

KIFWA

827704 Box 73567, Nairobi kifwa@nbnet.co.ke

38. Eng. H.M.

Mokaya

General Manager,

KBS

502211-5 Box 54974, Nairobi Mokayah@kebs.org

39. Dr. Halima Noor Director, Trade

Watch Africa

0722 658 290 or

561210

Box 73680, Nairobi. Shalima2000@yahoo.com

40. Roselyn Ngeno IPC 221401-4 Box 55704, 00200,

Nairobi.

ngeno@investmentkenya.com

41. Polycarp

Madegwa

Administration

Assistant

42. Miriam Omolo Research Consultant 228057 Box 62882, Nairobi consultant@aercafrica.org

43. Andropov Cyril Reporter –Nation 020-570426 Box 42422, Nairobi Andropove2001@yahoo.com

44. Ngare Zachary Project Coordinator,

Hoywik Programmes

0733 289 349 Box 4227-00200,

Nairobi

zaxngare@yahoo.co.uk

45. Cosmas Kyengo Agronomist, 566366/574883 Box 40312, Nairobi fpeak@wananchi.com

54

No. Name Title and

Organization

Telephone Contact Address E-mail

FPEAK

46 Goh Chien Yen Third World

Network, Geneva

47 Judy Kamau East African

Standard

332658 judykoech@yahoo.com

48 Ada Mwangola Oxfam GB 2715003 amwangola@oxfam.org.uk

49 Karin Gregow EcoNews Africa 0722 565 116 Box 10332-00100,

Nairobi

karingregow@econewsafrica.org

50 Mary Sesia AG Chambers 227648

51 Mboi E Misati KIPI 602210/11 kipi@swiftkenya.com

52. Lawrence PCL

Makumba

Lawmak

Consultancy Services

–Chief Executive

0721 296 101 Box 266, GPO, Nairobi lawmakumba@yahoo.com

55

ANNEX III OPENING STATEMENT BY THE PERMANENT SECRETARY PROF.DOMINIQUE NJINKEU, EXECUTIVE DIRECTOR, INTERNATIOAL LAWYERS AND ECONOMISTS AGAINST POVERTY (ILEAP), FORMERLY DEPUTY DIRECTOR OF RESEARCH AT THE AERC. MR. GREG HOWELL, THE UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPEMNT (USAID) REPRESENTATIVE DISTINGUISHED RESOURCE PERSONS DISTINGUISHED PARTICIPANTS LADIES AND GENTLEMEN I WOULD LIKE TO TAKE THIS OPPORTUNITY TO WELCOME YOU ALL TO THIS WORKSHOP ON BEHALF OF THE PERMANENT SECRETARY WHO HAD VERY MUCH WANTED TO BE PRESENT, BUT HAS HAD TO ACCOMPANY H.E. THE PRESIDENT ON OTHER OFFICIAL FUNCTIONS IN SOUTH AFRICA. BRIEFLY, IN KENYA WE ESTABLISHED A PERMANENT INTERMINISERIAL COMMITTEE (PIMC) FOR THE IMPLEMENTATION OF THE WTO AGREEMENTS AS FAR BACK AS MAY 95. THE PIMC WAS LATER RENAMED THE NATIONAL COMMITTEE ON WTO (NCWTO). THE MEMBERSHIP OF THIS BODY IS DRAWN FROM AMONG OTHERS:

GOVERNMENT MINISTRIES AND DEPARTMENTS PARASTATAL ORGANIZATIONS THE ACADEMIA, AS WELL AS RESEARCH INSTITUTIONS NGOS AND CIVIL SOCIETY ORGANIZATIONS CHAMBERS OF COMMERCE AND ASSOCIATION OF

MANUFACTURERS FARMERS ORGANIZATIONS TRADE UNIONS EMPLOYERS ORGANIZATIONS

THE KEY OBJECTIVES OF THE NCWTO AT THE OUTSET WERE:

TO STUDY AND ANALYZE IN DEPTH THE PROVISIONS OF THE WTO AGREEMENTS AND THEIR LIKELY EFFECTS ON THE COUNTRY’S ECONOMY

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TO MONITOR ON A CONTIUNOUS BASIS THE IMPLEMENTATION OF THE WTO AGREEMNTS BY THE WTO MEMBER COUNTRIES AND TO RECOMMEND APPROPRIATE ACTION BY KENYA.

TO PROVIDE MODALITIES FOR IMPLEMENTATION OF THE WTO AGREEMENTS BY KENYA SUCH AS WOULD ENSURE MAXIMUM GAINS TO THE COUNTRY.

TO PROVIDE GOVERNMENT AND THE PRIVATE SECTOR WITH THE NECESSARY ANALYSIS ON NEW MARKET ACCESS CONDITIONS TO ENABLE IT IDENTIFY IMMEDIATE AND POTENTIAL TRADING OPPORTUNITIES CREATED BY THE URUGUAY ROUND BOTH IN TRADITIONAL AND NON-TRADITIONAL MARKETS.

TO PROVIDE GOVERNMENT WITH ADEQUATE INFORMATION PERTAINING TO SECTORAL IMPACT OF THE RELEVANT AGREEMENTS THAT WILL ENABLE IT TO REVIEW CURRENT AND FUTURE POLICIES WITH AVIEW TO ADAPTING TO THE NEW ENVIRONMENT.

TO ASSIST GOVERNMENT IN IDENTIFYING THE OBLIGATIONS WHICH REQUIRE NEW OR CHANGES IN DOMESTIC LEGISLATION OR ADMINISTRATIVE PRACTICES FOR IMPLEMENTING THE URUGUAY ROUND AGREEMENTS

TO INCREASE AWARENESS OF GOVERNMENT REGARDING THE INSTITUTIONAL AND LEGISLATIVE MEANS BY WHICH IT COULD SAFEGUARD ITS RIGHTS DERIVING FROM THE TRADING SYSTEM BY ENSURING FAIR TRADE PRACTICES

TO ASSIST THE GOVERNMENT TO BECOME AWARE OF ITS NEW RIGHTS AND OBLIGATIONS IN THE MULTILATERAL TRADING SYSTEM, INCLUDING HOW TO TAKE ADVANTAGE OF SPECIAL AND MORE FAVORABLE TREATMENT PROVISIONS IN THE WTO

TO MAKE RECOMMENDATIONS FOR POLICY OPTIONS BY THE GOVERNMENT.

INDEED THESE ARE VERY AMBITIOUS TARGETS WHOSE IMPLEMENTATION WOULD REQUIRE HUGE AND ENORMOUS CONTRIBUTIONS BOTH IN TERMS OF TECHNICAL, HUMAN AND FINANCIAL RESOURCES. NEVERTHELESS, THE NCWTO, WITH ITS LIMITED RESOURCES, HAS DONE ITS BEST TO DELIVER IN PARTICULAR AS IT RELATES TO PREPARATION OF POSITION PAPERS DURING MINISTERIAL CONFERENCES. THANKS TO THE CONTRIBUTION MADE UNDER JITAP PROGRAM IN TERMS OF TRAINING AND HUMAN RESOURCE DEVELOPMENT. HOWEVER, AS PART OF ITS POLICY ACTIVITIES, THE AERC HAS COMMISSIONED A NUMBER OF BACKGROUND PAPERS TO ASSIST AFRICAN TRADE MINISTERS IN THEIR PREPARATION FOR THE FORTHCOMING CANCUN MINISTERIAL CONFERENCE. AMONG THOSE COMMISSIONED IN KENYA ARE THOSE STUDIES RELATING TO:

AGRICULTURE TRADE IN SERVICES

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MANUFACTURING AND INDUSTRIAL TARIFFS THE MAIN OBJECTIVE OF EACH PAPER IS TO UPDATE AND ASSESS THE ONGOING NEGOTIATIONS AND OTHER RELATED ISSUES IN THE LIGHT OF AFRICAN CONCERNS AND NEGOTIATING PRIORITIES WITH A VIEW TO ARTICULATING APPROPRIATE OPTIONS FOR AFRICAN COUNTRIES TO ADOPT AT THE CONFERENCE AND DURING THE REMAINING PERIOD COVERED BY THE DOHA AGENDA WORK PROGRAM. THIS WORKSHOP, WHICH HAS BEEN MADE POSSIBLE THROUGH THE CONTRIBUTIONS FROM AERC, WILL PROVIDE AN EXCELLENT OPPORTUNITY FOR INTERFACE AND DIALOGUE BETWEEN KEY SCHOLARS AND RESEARCHERS WHO HAVE WORKED ON THE VARIOUS PAPERS, AND THE BUREAUCRATS WHO WILL BE PREPARING KENYA’S POSITION PAPER IN READINESS FOR THE CONFERENCE. IT IS IMPORTANT TO RECOGNIZE THAT THIS IS THE FIRST TIME THESE SCHOLARS AND RESEARCHERS WILL BE MAKING THEIR DIRECT INPUT IN WHAT WILL GO INTO THE COUNTRY’S POSITION. AS INDICATED EARLIER, WHILE IT IS TRUE THAT KENYA HAS, IN THE PAST PRODUCED AND SUBMITTED SOME GOOD PAPERS, THE POSITION WOULD PROBABLY HAVE BEEN BETTER IF SUCH PAPERS WERE BACKED BY ANALYTICAL RESEARCH DATA AND FINDINGS. IT IS MY CONVICTION THAT WITH THE PARTICIPATION OF OUR ESTEEMED RESEARCHERS AND SCHOLARS, THE WORKSHOP WILL PROVIDE A GOLDEN OPPORTUNITY FOR THE COUNTRY TO BE ABLE TO PRODUCE POSITION PAPERS OF HIGH QUALITY. IT IS MY SINCERE HOPE THIS COLLABORATION BETWEEN THE MINISTRY OF TRADE AND INDUSTRY, AND ALL THE STAKEHOLDERS INCLUDING OUR SCHOLARS AND RESEARCHERS, WILL CONTINUE FOR THE GOOD OF THIS COUNTRY. AS IT HAS BEEN STATED IN AN ARTICLE BY MR. SAMSON MURADZIKWA, A RESEARCH FELLOW AND LECTURER AT THE UNIVERSITY OF CAPE TOWN, SOUTH AFRICA “ INTERNATIONAL TRADE BARGAINING IS CONSTRAINED BY ECONOMIC THEORY, BUT IT IS, VERY IMPORTANT, A PRACTICE. ITS EXPERTS ARE THOSE PEOPLE WHO HAVE LEARNT FIRST HAND, HOW TO DO IT. THE PLETHORA OF BILATERAL, PLURILATERAL AND MULTILATERAL TRADE AGREEMENTS THAT GUIDE AND REGULATE THE WORLD TRADING SYSTEM, POINTS TO THE CRUCIAL RULE OF THE TRADE NEGOTIATOR.” IS IT NOT A FACT THAT PREVIOUS MULTILATERAL NEGOTIATING ROUNDS HAVE YIELDED RELATIVELY LESS BENEFIT FOR A RANGE OF DEVELOPING COUNTRIES IN GENERAL, AND FOR AFRICAN COUNTRIES IN PARTICULAR? IS IT NOT ALSO TRUE THAT, TO A CONSIDERABLE EXTENT, THE TACT, SKILL, RESOURCES, PREPAREDNESS AND OVERALL DOMINANCE OF THE NEGOTIATING TEAMS FROM DEVELOPED COUNTRIES, IN RELATION TO THEIR DEVELOPING COUNTRY COUNTERPARTS, HAVE CONTRIBUTED TO A SITUATION WHERE THERE

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IS A RULES-BASED SYSTEM, A SYSTEM THAT REGULATES THE WORLD TRADE ORDER WHOSE RULES ARE GENERALLY PERCEIVED TO BE HEAVILY IN FAVOR OF DEVELOPED COUNTRIES, SUCH AS THE UNITED STATES, JAPAN AND THE EUROPEAN UNION MEMBER COUNTRIES? AS YOU ARE ALL AWARE, THE DOHA AGENDA IS HEAVILY LOADED. SOME OF THE ISSUES THAT ARE BEING DISCUSSED ARE EXTREMELY COMPLEX AND COVER A WIDE RANGE OF AREAS. THEY ARE QUITE DEMANDING AND REQUIRING WELL TRAINED AND WELL INFORMED NEGOTIATORS. INDEED, AFRICA NEEDS WELL AND CONTINUOUSLY TRAINED NEGOTIATING TEAMS SO AS NOT ONLY TO TRY TO BARGAIN FOR MORE FAVORABLE TRADE RULES/ POLICY, BUT ALSO TO BETTER UNDERSTAND HOW THEIR RESPECTIVE COUNTRIES CAN PARTICIPATE MORE EFFECTIVELY WITHIN THE MYRIAD OF RULES AND REGULATIONS THAT CONSTITUTE THE WORLD TRADING SYSTEM. IN THIS REGARD, THE ASSISTANCE KENYA HAS RECEIVED FROM AERC IN GETTING OURSELVES PREPARED FOR THE CANCUN TALKS COULD NOT HAVE COME AT A BETTER TIME. I THEREFORE TAKE THIS OPPORTUNITY TO EXPRESS THE MINISTRY’S GRATITUDE AND APPRECIATION FOR THIS GESTURE. I HAVE NO DOUBT IN MY MIND THAT THE DIALOGUE BETWEEN OUR RESEARCHERS AND SCHOLARS AND OTHER STAKEHOLDERS WITH THE GOVERNMENT, WILL GO A LONG WAY IN ENSURING WE PULL AND WORK TOGETHER FOR THE GOOD OF OUR NATION AND DERIVE TANGIBLE BENEFITS FROM THE WORLD TRADING SYSTEM. I AM PARTICULARLY DELIGHTED TO SEE THAT OUR NEGOTIATORS FROM GENEVA ARE HERE WITH US. THEIR INTERACTION WITH US WILL HELP THEM ARTICULATE KENYA’S CONCERNS MORE EFFECTIVELY. I WOULD, HOWEVER, LIKE TO ASSURE YOU THAT THE MINISTRY WILL TAKE SERIOUSLY THE RECOMMENDATIONS THAT YOU WILL MAKE AT THIS WORKSHOP, IN PARTICULAR AS THEY RELATE TO THE STRENGTHENING OF OUR NEGOTIATING POSITION IN THE MULTILATERAL; TRADING SYSTEM. WITH THESE FEW REMARKS, IT IS MY PLEASURE TO DECLARE THIS NATIONAL POLICY WORKSHOP FULLY OPEN. I DO WISH YOU ALL THE BEST IN YOUR DELIBERATIONS, THANK YOU, AND GOD BLESS YOU. ANNEX V: LIST OF DOCUMENTS CIRCULATED AT THE WORKSHOP Apart from the three studies on Agriculture, Services and manufacturing, the following documents/newsletters were circulated to all the participants. • AERC – Economic Research and Training to help Africa grow • The AERC –Research News Number 7 of Nov 2002 • The ILEAP- International Lawyers Against Poverty • AERC Collaborative Doctoral Programme in Economics • AERC Objectives Governance Structure

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• AERC Working together through Research and Training for a promising future • AERC Newsletter July 2003 • ILEAP – Negotiating Policy Brief No. 1 Market Access for Non-Agricultural

Products Modalities.