China ready for talks on deal with African trade bloc
Nairobi wary of free-trade pact, fearing surge of Chinese imports on top of huge imbalance in Beijing's favour
Nairobi — 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 its favour, says China’s ambassador to Nairobi.
But Kenyan officials said Nairobi was not ready to discuss a free-trade pact as it fears a surge of Chinese imports, but a partial deal may be possible.
Chinese ambassador Wu Peng said Beijing was ready to open trade talks with Kenya via the EAC, which includes Uganda, Tanzania, Rwanda, Burundi and South Sudan, guided by World Trade Organization 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 in an interview.
China has become one of the biggest trading partners for many East African countries, but their exports to the world’s second-biggest economy are dwarfed by imports of factory goods such as electronics and plant equipment.
Kenya imported goods worth 370.8-billion shillings ($3.67bn) from China last year while exporting just 11.32-billion shillings in goods to China.
Nairobi wants to export more farm produce to China. The two countries have completed a protocol opening up frozen avocado exports to China, but exports of fresh avocados are still blocked due to bio-safety concerns.
“I’m pushing it very hard, and maybe it just needs scientific assistance to Kenyan farmers,” Wu said.
Kenya borrowed from China in recent years to build roads and railways, and is part of China’s Belt and Road Initiative to upgrade land and maritime trade routes between China and Europe, Asia and Africa.
But it is not ready for a free trade deal. "You have got to know when to negotiate and when not to negotiate," said Adan Mohamed, Kenya's EAC minister. "When the time is right we have no problem doing that, not only as Kenya but as a region.
“China with all its competitiveness today stands to be the biggest beneficiary of negotiating trade deals with any country,” said Mohamed.
Chris Kiptoo, principal secretary in charge of trade at Kenya’s trade and industrialisation ministry, said Nairobi feared a free-trade agreement (FTA) with China would lead to a surge of imports.
He said Nairobi was seeking a preferential, nonreciprocal trade deal, giving Kenyan exports duty-free access to China. This could be modelled on the Africa Growth and Opportunity Act, which gives duty-free access for African exports such as apparel and textiles to the US market.
“Our view is that at this stage the FTA is not feasible. China and Kenya are at different development stages now,” Kiptoo said.
Wu said the development of Kenya’s industrial base could help resolve its trade imbalance. "Only through industrialisation can Kenya reduce the imports and have the capacity to export," he said.