In a competitive global market, at a time of dwindling trade barriers and border restrictions occasioned by ubiquitous nature of technology, economic diplomacy has become an all-important tool to secure investment opportunities through bilateral and multilateral trade co-operation.
Economic diplomacy deals with the nexus between power and wealth in international affairs. It not only promotes the State’s prosperity but also, as the occasion demands and opportunity permits, manipulates its foreign commercial and financial relations in support of its foreign policy.
Accordingly, economic diplomacy is a major theme of the external relations of virtually all countries. At home, economic ministries, trade and investment promotion bodies, chambers of commerce and, of course, foreign ministries are all participants in economic work.
Current trends include increasing collaboration between State and non-official agencies, and increased importance given to WTO issues, the negotiation of free trade and preferential trade agreements, and accords covering investments, double taxation avoidance, financial services and the like. Abroad, embassies, consulates, and trade offices handle economic diplomacy.
The main focus is on promotion, to attract foreign business, investments, technology and tourists. Economic diplomacy connects closely with political, public and other segments of diplomatic work.
Diplomatic relations through state visits, export promotion and development co-operation are relevant in minimising potential risks that businesses encounter in their foreign operations, especially in Foreign Direct Investments (FDIs). They provide an avenue to mitigate risks such as political, legal and credit that may discourage potential exporters from entering foreign markets through negotiated trade agreements.
At the same time, the role of diplomatic relations in facilitating trade between and among states taking the forms of state visits, opening trade missions, consulates and embassies cannot be gainsaid as critical determinants of bilateral and multilateral trade relations.
Last week’s Common Market for Eastern and Southern Africa’s (Comesa) Source 21 International Trade Fair and High-Level Business Summit brought together 21 Comesa member countries.
Officially opened by President Uhuru Kenyatta at the Kenyatta International Convention Centre (KICC), it was a clear manifestation of the importance of regional blocs and the positioning of Nairobi as a regional economic hub and preferred conferencing destination.
Nairobi has in the past hosted international conferences and President Kenyatta played host to Heads of States and government, which have yielded trade agreements through fruitful negotiations for export of Kenya’s agricultural produce to the international market.
The ‘Big Four Agenda’ outlined by the President on food security, affordable housing, manufacturing, and universal health coverage presents unlimited opportunities for the local business community and also foreign investors. That will open avenues to investments, create jobs and facilitate skills transfer for our people on the new competitive technologies.
The Kenya National Chamber of Commerce and Industry (KNCCI) has embarked on an aggressive push to expand trade opportunities in international markets through its extensive network, however cognisant of the need to adhere to global standards. During the Kenya Trade Week 2019, KNCCI presented an agenda to upgrade its Certificate of Origin (CoO) systems to accept issuance of all preferential certificates of origin issued by the Kenyan government.
Automation of the issuance of Ordinary Certificates of Origin will enhance efficiency and security of the process. Since the automation in late 2015, fee collection has increased from Sh1.6 million to Sh4.5 million per month. Additionally the system shall hold a database on all pertinent export information which shall be used for targeting new markets and improving existing ones.
Effectively, Kenyan traders will enjoy an expanded market for their goods and services as KNCCI seeks to achieve the Integrated National Export Development and Promotion Strategy (INEPDS) by embracing sustainability, connectivity and mobility.
Effective day-to-day economic diplomacy by the foreign service officers will ensure that Kenya statecraft achieves the best for our country.
Mr Ngatia is the president of the Kenya National Chamber of Commerce and Industry (KNCCI). best- [email protected]