CHINA READY FOR TRADE TALKS WITH EAST AFRICA BLOC – ENVOY
China is ready to negotiate a trade deal with the six-nation East Africa Community (EAC) to address Kenya’s complaints about a huge trade imbalance in favour of the Asian economic giant, China’s ambassador to Nairobi, Wu Peng told Reuters.
According to Kenyan officials, the government was not ready to discuss a free trade agreement since it fears it will cause a swell of imports from China but would opt for a partial deal.
According to the ambassador, Beijing was ready to open trade talks with Kenya via the EAC, which also encompasses Uganda, Tanzania, Rwanda, Burundi and South Sudan, under the guidance of World Trade Organisation rules.
“If we want a new, favourable trade agreement for Kenya, we must consider the whole area. But we are open to this task, this possibility, and we are ready to talk with the EAC together,” Wu said.
The East Asian economic giant has come to be one of the biggest trading partners for many East African countries in recent years but their exports to the country are very low compared to imports of manufactured goods like electronics and plant equipment.
For instance, Kenya imported goods worth 370.8 billion shillings ($3.67 billion) from China last year while it exported only 11.32 billion shillings of goods China. Kenya now wants to export more farm products such as avocados to China. The Chinese diplomat adds that he is pushing very hard for the deal and that Kenyan farmers may need scientific assistance.
In the past few years, the Kenyan government has borrowed heftily from China to build infrastructure such as roads and railways but has indicated it is not ready for a free trade deal yet. The competitiveness of china certainly gives it the upper hand in trade deals with any partner with lower development levels hence it has to be approached thoughtfully.
According to Kenyan officials, Nairobi was seeking a preferential, non-reciprocal trade deal, giving Kenyan exports duty free access to China. Such a scheme could be modeled on the Africa Growth and Opportunity Act (AGOA), which allows African exports such as apparel and textiles to access the U.S market duty free.
Ambassador Wu said it is essential that Kenya’s industrial base develops so as to help cure its trade imbalance. “Only through industrialization can Kenya reduce the imports and have the capacity to export,” he said.