Regional trade blocs threat to WTO, CS Amina Mohamed warns

Wednesday May 27 2015

BERNARDINE MUTANU
By BERNARDINE MUTANU
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Foreign Affairs and International Trade Cabinet Secretary Ms Amina Mohamed has said upcoming regional trade blocs are a threat to the World Trade Organisation.

She said a number of partnerships are coming up parallel with the WTO that could harm the organisation's trade.

These include emerging mega partnerships such as the Trans-Atlantic and Trans-Pacific and the African Continental Free Trade Area expected to be launched by 2017.

“We are living in a globalised world where interesting transformation is taking place on the global trading environment. Countries and regions are seeking new partnerships and are continuing to take advantage of emerging markets and opportunities as well the trade barriers," she said.

TRADE BARRIERS

She said the WTO risks losing business owing to protracted negotiations, emerging trade blocs and trade barriers.

Speaking on Tuesday during the opening of a two-day WTO Regional Trade negotiation meeting in Nairobi, the CS said the organization could face a grim future in the world of trade if it does nothing to amend its forbidding rules and or align itself to emerging regional trading blocs.

The meeting comes just months before the WTO holds a mega conference in Kenya this December.

Ms Mohamed said by virtue of scope and impact, the trade blocs are most likely “to create an asymmetry in the global trade arena”.

She cited the 2001 Doha Development Agenda, which have taken more than a decade to be finalised, and requested the WTO to consider revising its rules and structures, not only for the locked-out countries to benefit but also for the sake of the organisation.

“You can decide to bury your head in the sand or take an action to ensure that enough work is done to allow you (to) benefit and take advantage of these arrangements. That these will significantly affect world trade it is not in doubt given and that these constitute about half of the world’s gross domestic product and more than 40 per cent of the world’s trade,” said Ms Mohammed.

She said many multinationals could be afraid of the fact that the regional blocs could generate environments whose capacities may be very difficult and challenging to the economies, countries or regions who are not members.

“It is therefore imperative to critically interrogate the potential impact of mega-regions (with) a view to formulating an appropriate response on how the agreements are likely to affect the excluded countries’ defensive and offensive trade interests.

“We need (the WTO) to strengthen the role and maintain the importance of the world trade organization in the trading system. We should not allow that role to be diluted,” she added.