Africa and the world trading system: a case study of Kenya (стр. 3 )

Revamping export institutions and regional integration schemes, producing under manufacturing-under-bond and in EPZ facilities, and liberalizing the trade regime as Kenya has done in the 1980s and 1990s are consistent with Uruguay Round/WTO agreements as long as explicit export subsidies are not provided.

3. Market access under the Uruguay Round and WTO arrangements

The objective of this section is to review and analyse the initial conditions (as of 1995) of market access barriers and special opportunities faced by Kenya's exports in foreign markets, paying particular attention to tariffs, non-tariff barriers and preferences. The section also discusses the changes brought about by the Uruguay Round agreements and their likely effects.

Table 2 shows the destination of some of Kenya's exports. The European Union has historically been the largest single market, accounting for 32% to 50% of Kenya's exports in . The EU share increased steadily in the early 1980s, from 35.9% in 1980 to 49.4% in 1988, before declining to 32.7% in 1994. The major importers in this region are the United Kingdom, Germany, Italy, France and the Netherlands. The United Kingdom is the leading market for Kenya's exports, followed by Germany.

The next important destination for Kenya's exports is Africa (particularly Uganda and Tanzania), which is largely included in the "other" category in Table 2. There was a rapid increase in the share of exports to this region in the 1990s (from 21.9% in 1991 to 51% in 1995, before declining to 48% in 1996), so that exports to Africa for the first time exceeded those to the traditional European markets. Many of the exports go to the former East African Community countries. Uganda and Tanzania, for example, accounted for 52.3% of the total exports to African countries in 1994, while the COMESA region (of which the two countries are members) took 83.3% of total exports to Africa. Major export to Uganda are motor spirit, cement, wheat and sugar; those to Tanzania are iron products, beer, sugar, soaps and medicaments. More than 90% of manufactured exports are sold mostly in Africa and the Middle East.

The share of exports to Australia and the Far East (mainly Japan, India and China) has not changed much over time and accounts for about 8% to 14% of total exports. The United States and Canada absorb less than 10% of total exports. The Middle East and Eastern Europe have been unimportant destinations of Kenya's exports.

In Section 1, we used the Blackhurst and Lyakurwa (1997) approach to define traditional exports. Non-traditional (NT) exports then are defined residually as the remaining export items. Based on this definition, the Kenya annual trade report listed 232 NT exports in 1995.

The following are the 28 leading non-traditional exports (worth at least $10 million each) in 1995:

• Fish, fresh ((live or dead), chilled or frozen (SITC 34)

• Maize not including sweet (corn) unmilled (SITC 44)

• Meals and flours of wheat and flour of meslin (SITC 46)

• Vegetables, fresh, chilled or frozen (SITC 54)

• Vegetables, roots and tubers (SITC 56)

• Fruit and nuts (not oil nuts), fresh or dried (SITC 57)

• Fruits (preserved) and fruit preparations (SITC 58)

• Fruit juice (including grape must) and vegetable (SITC 59)

• Sugar confectionery (SITC 62)

Table 3.1: Destination of Kenya's exports in 1995, %

	Germany	UK	Nether lands	Italy	Sweden	Finland	USA	Canada	Egypt	Stores	Other
Coffee, not roasted	40.4	7.0	5.3	1.8	8.8	4.9	5.6	1.3	0.0	0.0	25.0
Tea	0.7	31.5	1.3	0.3	0.0	0.0	1.4	0.8	15.8	0.0	48.2
Sisal fibre and tow	4.1	6.2	1.5	0.9	0.0	0.2	1.1	1.3	5.2	0.0	79.5
Pyrethrum extract	0.9	9.5	1.4	10.0	0.5	0.3	59.1	1.2	0.5	0.0	16.6
Pyrethrum flowers	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	100.0
Meat and meat preparations	0.0	0.2	0.5	0.0	0.0	0.0	0.0	0.0	0.0	13.8	85.5
Petroleum products	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	99.9
Hides, skins and fur, skins undress	0.0	0.0	0.2	41.5	0.0	0.0	0.0	0.0	0.0	0.0	58.3
Wattle bark extract	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	5.7	0.0	94.3
Pineapple, tinned	11.3	20.7	11.0	16.3	2.2	1.1	0.8	0.0	0.0	0.0	36.6
Cement, building	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	100.0
Butter and ghee	0.0	3.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	2.3	94.8
Sodium carbonate (soda ash)	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	100.0
Cotton, raw	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	100.0
Beans, peas and lentils	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.1	99.9
Wool, raw	0.0	71.9	0.0	19.3	0.0	0.0	0.2	0.0	0.0	0.0	8.5
Oil seeds, nuts and kernels	0.8	0.0	6.6	0.0	0.0	0.0	35.3	0.0	0.0	0.0	57.2
Maize unmilled	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	100.0
All other commodities	2.3	5.0	6.4	1.3	0.1	0.1	1.5	0.6	0.2	1.6	80.9
Total	7.9	10.4	4.6	1.7	1.5	0.8	2.8	0.7	3.2	0.8	65.6

Source: Kenya, Statistical Abstract, 1996