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Blog: Assisting Kenyan MPs counteract unfair trade practices

23 February 2018
The Hub and Spokes Programme provides trade experts to national ministries and regional trade organisations to enhance trade capacity in the African, Caribbean and Pacific (ACP) group of states. It is a joint Programme of the European Union, ACP Group Secretariat, the Commonwealth Secretariat and the Organisation Internationale de la Francophonie. Philda Maiga, the programme’s National Trade Adviser to Kenya, led a workshop with Members of Parliament and other key stakeholders to raise understanding of important remedial trade legislation.

Kenya enjoys a strong position in Eastern Africa. It has taken a number of strides in development, partly due to its strategic location as a major services hub to its neighbours, with an important Indian Ocean port and strategic land borders with Ethiopia, South Sudan, Uganda, Tanzania, and Somalia. It is a key exporter of merchandise exports to its neighbours.

As a founder member of the World Trade Organisation, Kenya has pursued trade liberalisation policies for more than two decades, designed to boost macro-economic performance and attract investment. However, liberalisation was not accompanied with effective measures to shield domestic industries from the fierce competition from foreign players that inevitably followed.

A number of its domestic industries suffered, including steel, textiles, batteries and agro-processing. This was compounded by a lack of domestic effort to develop policies, regulations and laws to address harmful unfair trade practices and import surges, even though the WTO allows safety valves to provide relief from such eventualities.

At the regional level, the East African Community and the Common Market for Eastern and Southern Africa have launched initiatives that allow partner states recourse to some remedial trade measures, such as safeguards. However, these are not premised on comprehensive regional laws and there is no regional trade remedial body mandated to evaluate and conduct investigations. Individual states therefore need to develop their own trade remedy laws and regulations.

The Ministry of Trade, Industry and Cooperatives therefore prioritised the enactment of a remedial trade law to counter unfair trade practices, bearing in mind that the WTO stipulates that no country can adopt defensive trade measures without supporting domestic legislation and an investigating authority.

After the government drafted a Trade Remedies Bill, a series of workshops were held to inform stakeholders about the merits of the legislation, and to foster buy-in. Trademark East Africa provided funding for the workshops.

On March 29, 2017, the National Trade Adviser led a sensitisation workshop at the Nairobi Intercontinental Hotel with Members of Parliament, designed to facilitate the smooth passage of the bill, which was then approaching its important second reading.   

By the end of the workshop, MPs and stakeholders had gained a strong appreciation of the importance and urgency of remedial trade legislation, and of the key principles and procedures that the ministry needed to follow in order to implement an effective trade defence regime.

In June 2017, Parliament duly enacted the Trade Remedies Act. The key tenets of the act include investigation and evaluation of alleged dumping and subsidised exports, and the investigation and evaluation of alleged import surges. The act permitted the application of a tariff or quota regime to allow a local industry to become more competitive.

The Ministry has drawn up an operationalisation road map for a Trade Remedies Agency, as required by the WTO and Section 3 of the Act. The agency will investigate cases of dumping and improper subsidisation of imported goods, and impose remedies in the form of anti-dumping and countervailing duties to protect local producers and interests. 

The agency will ensure full compliance with the legal framework in tandem with the country’s multilateral, regional and bilateral commitments.