Kenya must streamline trade diplomacy structures before vital UNCTAD meet

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By Leonard Wanyama

It was surprising to see the subtle announcement of changes in Kenya’s trade diplomacy structure so soon after the World Trade Organisation 10th Ministerial Conference (WTO-MC10) in Nairobi last year. A keen observer could not miss the transfer of international trade activities and functions to the Ministry of Industrialisation in evaluations of the conference.

Considering the tone of celebration from the Cabinet Secretary for Foreign Affairs, Amina Mohamed, this development could be perceived as a policy indicator that all may not have gone well in terms of agreements reached at the conference. Alternative perspectives of WTO-MC10 based on the text of the agreement point to the fact that essential aspects of the Doha Development Round were not conclusively dealt with. Despite Ms Mohamed terming the conference a success, the outcomes of the meeting point to a very different reality.

Foremost, it is notable that export subsidies were not outlawed; rather the Nairobi agreement simply put a cap on existing levels of export support. Secondly, domestic agricultural subsidies, which are the most trade-distorting policies, were not open to discussion by rich countries as they were actively resisted by powerful participants such as the US.

The Nairobi Outcome therefore left damaging programmes such as the 2014 US Farm Bill unaffected and in one piece, mostly because they did not feature in any discussions. Thirdly, the reaffirmation of the Bali Decision on public stockholding postponed the desire for a permanent solution to challenges faced in ensuring food security.

Also, the much celebrated agreement on information technology (IT) has very limited gains for Africa or most other developing countries. While it lowers costs of a few IT products, it eliminates the possibility for poor governments to raise revenues by imposing tariffs. Again, the biggest winners of the ITA are developed countries that heavily manufacture IT products.

Looking at the exempted tariff lines under the Least Developed Country (LDC) package, close to 90 per cent of the goods exported by poor countries will not be covered by the deal. Finally, the WTO decision-making principle of “one country, one vote” was cast aside to allow a few rich or powerful countries to undermine the Doha Round at Nairobi.

Developing countries therefore have an uphill task in negotiations that will follow in Geneva without the strong set of principles or framework that was provided for by the Doha Round. Many hopeful participants left with a gloomy sense that the WTO-MC10 was converted into the graveyard of development issues.

Lacked coherent strategy

All these point to a glaring failure of the Jubilee administration to think through a coherent strategy for economic and trade diplomacy.

In taking over from the previous administration, President Uhuru Kenyatta and his team failed to complete the inherited debate that no matter where the country looked towards for its external relationships, its policy focus was either a matter of trade, economics or commerce. In terms of wording, trade, economic, or commercial diplomacy sound very much like euphemisms.

However, a conceptual awareness of the attached priorities can explain why the terminology of trade diplomacy might have been used by “Kibaki-lites” towards the end of its second term. Use of the term economic diplomacy did not catch on despite being in policy papers because the administration realised by default the complementary dimensions of economic diplomacy on one hand and commercial diplomacy on the other.

Loosely defined, the former is concerned with the monitoring, reporting and negotiation of policy issues with, for or against foreign countries to the benefit of the home country. Advice to the home country and its subsequent actions seek to influence the policies either by rewards or sanctions in pursuit of a defined foreign policy objective. In essence it is an economic statecraft – to be precise, the kind of activities that go on at WTO and UNCTAD meetings.

The latter concerns itself mainly with the support of home country business and financial interests abroad in order to achieve economic success in line with a country’s general development objectives. Most of the heavy lifting is therefore within the realm of commercial diplomacy, for it is here that promotion of inward and outward investments in trade takes place.

This is the realm of commercial attachés plus the involvement of organisations like chamber of commerce or business councils, and selected prominent business people who act as representatives.

In the pragmatic foreign policy sense that emerged within the second term of the Kibaki administration, trade diplomacy became the all-encompassing position while economic and commercial diplomacy became relatively distinct but cooperative domains.

Unfortunately, the Jubilee administration’s policy sin of not interpreting its “digital” character into a sustainable political economy rationale in the example of the Economic Recovery Strategy Paper (ERSP) permeates into its foreign policy decision-making and actions.

While the notions seemed to be in place, the challenge of who does what exactly always never seems to have been resolved. This manifests in rather embarrassing incidences such as the criticism that always pokes into who is accompanying the president on foreign trips and at how much it costs in relation to the gains attained. However, this criticism would be more stinging if one was to ask who went to do what on these trips.

Uncoordinated multiplicity

For, among the Ministries of Foreign Affairs and International Trade, East African Affairs, Commerce and Tourism, and Ministry of Industry, Investment and Trade, one can see the challenges based on the names of these government departments. Who is doing what? Won’t there be infighting in hosting the 14th session of the United Nation Conference of Trade and Development (UNCTAD) in July 2016 as it was rumoured during the organisation of the WTO-MC10?

Structurally, a unified organisational matrix is ideal but many countries adopt a binary structure dividing commercial elements so that they are somewhat separated from the foreign policy ministry. Obviously, this comes about with a strain in procedures, disagreements over turf as a result of overlapping functions, confusion by various government agencies and warped incentives towards state agents as they seek to serve different constituencies within one framework.

Indeed, the policy sin referred to previously mentioned shows that a lack of the political economic interpretation by the State’s planning acolytes allowed external relations policy to be guided by nationalistic banter alone with no regard for traditional values of pragmatism. Unfortunately, the realisation of what it actually means to have pragmatic foreign relations has come rather late in their first term.

If the Jubilee administration had understood that unlike their foray in battling issues under international justice, global trade works at a faster pace and is more vested institutionally, they might not have acquired the whispered reputation of leading the Doha Development Round to its grave. In their anxiety over non state actors’ involvement in government, they refused to acknowledge the emerging Post-modern diplomatic environment.

This is an environment in which transnational state to state diplomacy is fragmenting into more complex interactive relations with more non-state actors plus a spread of non-traditional government entities. The addition of business men, domestic corporate entities, multinational corporations, and non-governmental organisations in these activities multiplies the complexity of issues. Moreover, having so many leading actors in such a cauldron of circumstances, without strong executive leadership, could set the stage for a vicious administrative cold war.

Beyond Ms Mohamed, this realm also comprises Adan Mohamed of Industrialisation and Phyllis Kandie of East African Affairs. At the Permanent Secretary level, the three ministries feature even bigger intellectual guns with Dr Monica Juma, Betty Maina – the former CEO of the Kenya Association of Manufactures (KAM) – and Dr Chris Kiptoo a former Country Manager of Trade Mark East Africa, just to name a few. This is besides the fact that contractors like Gina Din Kariuki make subtle announcements by virtue of their assignments while internationally Kenya has a friend in Dr Mukhisa Kituyi as the Director-General of UNCTAD. Such a situation may pit interests of economic, commercial and other non-state actor diplomats against each other to the detriment of the country’s strategic trade interests.

Only executive direction can streamline this diplomatic predicament before the upcoming UNCTAD Conference. This should ensure proper coordination and a harmonised agenda as the host so as not to falter to the whims of super power entities. It should also give space and opportunity for strong and constructive civil society participation at the conference or else Kenya may cement a reputation of achieving pitiable trade outcomes at international summits.

Writer teaches International Relations at Technical University of Kenya

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