TRALAC - Trade Law Centre

Kenya: Support the AGOA Initiative, China Told

Saturday, 29 April 2006

Source: The East African Standard (Nairobi)

Kenya has asked China to withdraw its objection for extension of the African Growth and Opportunity Act (Agoa).

Kituyi said China had threatened to block the trade arrangement through the World Trade Organisation citing the trade arrangement sponsored by the US was not compatible with WTO rules.

Kituyi who held talks with visiting Chinese Commerce Minister, Bo Xilai, said Africa wants China to drop its objection as away of helping the continent grow its economies. Exports of textile and apparel from Africa dominate trade under the Agoa arrangements.

Kituyi at the same time urged Chinese investors to help revive the country's moribund textile and garment sector.

He asked Chinese investors to establish textile mills in the country to locally produce fabric and accessories. "These mills would supply fabric to apparel exporters as well as service other regional markets, notably Madagascar, Swaziland, Lesotho and Mauritius who also enjoy benefits of the African Government Opportunity Act (Agoa)."

Kituyi told the visiting Chinese minister that investment in Kenya would give the Asian economic giant an advantage of the wider markets of East Africa Community and Comesa with a population of 80 and 400 million respectively.

Xilai is part of Chinese President Hu Jintao's delegation currently in the country. The Chinese President wraps up his world tour in Kenya by signing an oil prospecting deal for China's state-controlled oil firm CNOOC Limited.

The deal comes on the back of a $4 billion agreement for oil drilling licences in Nigeria earlier in the week and would be the latest at the end of a Hu world tour in search of energy and resources to fuel China's booming economy and cement its growing economic and political influence.

Kenya said in October it planned to sign an agreement allowing CNOOC to prospect for oil and gas on six offshore blocks in the north and south of the country.

Kenya's Acting Energy minister, Henry Obwocha, said the deal would be signed but refused to give out any more details on the value of the deal.

"We can't preempt it, the details will be released tomorrow," he said.

Hu's three-day trip to east Africa's biggest economy comes after Kenyan President Mwai Kibaki's visit to China last year to sign a raft of economic co-operation pacts, including landing rights in several Chinese cities to national carrier, Kenya Airways.

The talks with CNOOC are part of Kenya's strategy of looking to the Far East for investment and financial assistance. Like many African countries, it worries about conditions tied to aid from multilateral and Western donors.

During Hu's visit, Kenyan officials will face the delicate task of encouraging economic ties with a market of 1.3 billion potential consumers, and protecting its trading interests.

"We are...looking into the balance of trade between our two countries and to encourage more investment by Kenyans to their country and by Chinese to our country," government spokesman Alfred Mutua told a weekly news conference.

Bilateral trade amounted to Sh34.7 billion ($475 million) last year, according to Chinese officials. But the lion's share flowed East to pay for exports of everything from machinery and textiles to flip-flops and rice cookers.

China's exports to Kenya were worth Sh33.4 billion ($457 million) in 2005, a 31 per cent increase on the previous year, while imports of fruit, scrap copper, cotton, coffee and tea from Kenya rose four per cent to Sh1.28 billion US$17.6 million).

The imbalance is killing livelihoods, many Kenyans say.

"You cannot go into any shop without finding a huge chunk of Chinese goods. The problem is it's killing our small and medium-sized enterprises," University of Nairobi lecturer and trade expert, Jasper Okelo, said.

"We're trying to work out a system where we're not just the consumers."

Kenya is the final stop of a tour that has taken Hu to the United States, Saudi Arabia, Morocco and Nigeria.

He is expected to view Kenya's Rift Valley today to highlight the country as a tourist destination for China's expanding middle class.



“ Latest AGOA Trade Data currently available on AGOA.info


Click here to view a sector profile of Kenya’s bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.


Other regularly updated trade statistics on AGOA.info include: (click each link to view)

  • AGOA-Beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.