Geographical Indications Bill Kenya

Business Daily reports that Kenya's Industrialization Ministry along with the Kenya Industrial Property Institute (KIPI) are currently reviewing the Geographical Indications Bill (GI) which will provide a legal framework for safeguarding products like tea, coffee, and handicraft by expressly attributing them a sign or appellation of origin.

A geographical indication is a sign used on goods that have a specific geographical origin and possess qualities, reputation or characteristics that are essentially attributable to that place of origin. Most commonly, geographical indications include the name of the place of origin of the goods such as agricultural products which typically have qualities that derive from their place of growth/production and are also influenced by specific local factors, such as climate and soil. Geographical indications may be used for a wide variety of products, whether natural, agricultural or manufactured.

Meanwhile an appellation of origin is a special kind of geographical indication. It generally consists of a geographical name or a traditional designation used on products which have a specific quality or characteristics that are essentially due to the geographical environment in which they are produced.  The concept of a geographical indication encompasses appellations of origin.

Whether a sign is recognized as a geographical indication is a matter of national law and as such geographical indications are protected in accordance with international treaties and national laws under a wide range of concepts, including trademark laws in the form of collective marks or certification marks, laws against unfair competition, consumer protection laws, or specific laws or decrees that recognize individual GIs.

The GI Bill is expected to help certify Kenyan products and market them exclusively in the speciality market, a strategy that will help distinguish Kenyan goods from those of other countries.  The likely scenarios once the Bill is enacted include marketing of origin-specific Kenyan exports such as Kericho tea, Mt Kenya coffee, Maasai jewellery, and Kisii soapstone carvings.

The draft GI Bill also proposes that producers and regulatory firms can apply to be custodians of a location specific trademark. Thus, the Kenya Tea Development Agency may apply to register tea variety trademarks.  Certification trademark of Kenyan products will avoid situations where foreign parties attempt to register such goods in other countries.

GI's are protected at the international level through a number of treaties mostly administered by World Intellectual Property Organization WIPO which provides for the protection of geographical indications, most notably the Paris Convention for the Protection of Industrial Property of 1883, and the Lisbon Agreement for the Protection of Appellations of Origin and Their International Registration. In addition, Articles 22 to 24 of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) deals with the international protection of geographical indications within the framework of the World Trade Organization (WTO).

Meanwhile Article 43 of the EAC Common Market Protocol has provisions on co-operation in Intellectual Property Rights of which geographical indications are included (Art 43.2(f)).

Why Export Bans Fail to Spur Local Value Addition

Exports of raw cashews nuts by Kenyan farmers were banned last year in a bid to revive the local cashew nut industry. The ban provided that only Government and the National Cereals and Produce Board would be authorized to buy raw nuts from farmers. The purpose of the ban was to attract investors to set up cashew nut processing units in the country, however, the low volumes of nuts produced meant that a year later, no factory of viable capacity has been established.

There could have been some implementation weaknesses. The national task force that recommended the ban, also proposed that the National Cereals and Produce Board (NCBP) should become the buyer of last resort and market regulator, as is the case with maize and wheat. However since  no funds were channeled to NCPB for the task, this gave middlemen a field day as they bought the nuts at about a third of the price prevailing before the ban. As a result, farmers are now bracing themselves for substantial losses following cashew nut harvests and government delays in providing alternative marketing channels. 

If I may think out loud- I wonder if the authorities made specific efforts to increase production of local cashew nuts, identify investors, provide incentives and jointly venture with them, to help establish cashew processing plants in the country. 

See recent article here.

Has the Financial Crisis Revealed the Limits of an Export Led Strategy?

The global economic crisis is making it painfully evident to the developing world, the limitations of over-dependence on a narrow set of exports and markets. Many countries are rightly worried about the merits of a growth process built on export-led growth. In the case of successful export-led growth strategies, the global economic crisis is revealing an additional limitation: the large exposure of exporting countries to financial vulnerability. 

For these reasons, countries should: strengthen their diversification and avoid agricultural or natural resource export vulnerability; emphasise the development of the domestic market; develop industrial policies rather than narrowly defined export led strategies only; increase regional trade and integration; enhance infrastructure development and other private sector development tools.

For instance, China's dependence on export-led growth, particularly as a global platform for exports of manufactured products, left it vulnerable to the effects of the global economic recession that began in late 2008. In 2009, China's exports fell by 16% and its imports fell by 11%, reflecting the high import-intensity of its manufactured export sector. Real GDP growth declined from 9.6% in 2008 to a year-on-year rate of 6.2% in the first quarter of 2009, the lowest rate in more than a decade. If China can be vulnerable to the downside of export-led growth, African countries are no exception.

Has the Financial Crisis Revealed the Limits of an Export Led Strategy? other views here.

Africa's Growth and Exports Spurred by Commodity Prices

According to the IMF Regional Economic Outlook for Sub Saharan Africa 2009, the strong average economic
growth of 6 per cent that Africa experienced in the five years, leading up to the 2008 economic crisis was underpinned by a spectacular increase in the continent’s trade in commodities whose prices increased significantly over the period 2007-8. 


The commodity prices which showed the highest increase are oil followed by metals. There was a less dramatic increase in the prices of cocoa, coffee, sugar, tea and wood.. 

Audio Visual Services

According to a 2010 global cinema survey conducted by the United Nations Educational, Scientific and Cultural Organization (UNESCO) Institute for Statistics (UIS), Nigeria has overtaken the United States for second place in the global production of motion pictures. India remains the largest film producer in the world, producing 1041 feature films in 2005 and 900 short films in 52 different languages and dialects.  The US has in the past been the next largest producer of motion pictures, however Nigeria is closing the gap, outperforming the US for second place.  For Nigeria this is certainly no small accomplishment. 


According to the survey, Nollywood produced 872 productions  and in contrast, the United States produced 485 major films. The three heavyweights were followed by eight countries that produced more than 100 films: Japan (417), China (330), France (203), Germany (174), Spain (150), Italy (116), South Korea (110) and the United Kingdom (104).

The explosive growth of Nigeria’s Nollywood film industry attracts considerable attention, especially for developing countries looking for alternatives to the US or European models of film production and distribution, which require considerable investment.  To begin with, Nigerian film makers uncovered a winning formula by relying on video instead of screen film in order to reduce production costs.  Additionally, Nigeria capitalized on economies of scale given its sizable domestic market and her exports to the African continent and the diaspora.  One reason for Nollywood's popularity in Africa lies with the South African-based cable television MultiChoice, which is a fee-based broadcaster to the continent with 24-hour channels dedicated to African content, predominantly Nigeria productions. 

I should note however that these developments are not necessarily a result of Nigeria’s participation in multilateral or regional trade in services agreements but rather a result of home-grown supply capacity, technology usage and application of low cost approaches.  Trade in services negotiations however, are useful for the elimination of barriers to trade where the capacity to supply a market is hindered by regulatory measures.  In this regard, trade in services negotiations at the WTO aim to increase the liberalization commitments undertaken by participating Member States.  However, the audio visual sector is one in which fewest WTO Members have undertaken specific commitments under the General Agreement on Trade in Services (GATS) and it attracts significant MFN exemptions; a reflection of the controversial and divergent policy and cultural views among Members. 

For instance the European Community has almost no multilateral commitments in this sector and in the EC’s EPA Services, Investment and E-commerce template, the EC has excluded the sector from the scope of the EPA negotiations with ACP countries, of which Nigeria is a Member.  African countries could however choose to include this sector in the EPA negotiations with a view to developing an international advantage in the sub sector.  However the EPA trade in services negotiations would need to give priority to the development of services supply capacity rather than traditional market opening.

As one would expect, the US is a demanduer in this area and has effectively used bilateral and regional services agreements to advance audio visual commitments undertaken by its FTA negotiating partners e.g. Morocco in the US-Morocco Free Trade Agreement of 2006.  However these bilateral commitments have not necessary resulted in increased multilateral offers in the WTO Doha round, even though the sector is a dynamic one. 

International trade in audiovisual services extends to the production (including processing and finishing), distribution (including broadcasting) and exhibition of motion pictures, television and radio services.  It also includes sound recording and other entertainment such as theatre, bands, orchestras etc and includes the sale of advertising or promotion services. Additionally, the WTO Services Sectoral Classification List termed the W/120 also includes Recreational, Cultural and Sporting Services sector, under which news agency services are classified as a subsector and hence can be considered alongside audio visual services. 

President's Export Council: Is this a useful model for Africa?

President Barack Obama recently named Boeing Chairman, President and Chief Executive Jim McNerney as chairman of the Presidents Export Council (PEC) with Xerox Chief Executive Ursula Burns as Vice Chairwoman of the Council and has 8 private sector members. The PEC was created to advise the President on exports, trade, promotion and other matters relevant to exports and was first created in 1973 by President Nixon according to the U.S. Department of Commerce Charter of the Presidents Export Council.

Originally, the PEC consisted of only 20 private sector members drawn from business and industry, mostly CEO's of major U.S. companies. Eight of the members were chosen "without regard to geographic considerations." Twelve members were selected to provide appropriate regional representation. Six years later, in 1979, President Jimmy Carter reconstituted and expanded the PEC to the current roster of 48 members which was extended to include leaders of labor and agriculture communities, members of Congress, and members of the executive branch. 

The PEC reports its advice through the Secretary of Commerce. Members serve "at the pleasure of the President" with no set term of office and thus, a change in administrations would bring a change in the Council. The PEC’s activities and operations are subject to the Federal Advisory Committee Act and the full council meets at least twice a year with no compensation to members for their services.  The PEC maintains subcommittees according to the council’s interests, and membership in those subordinate committees is drawn from the council’s membership. The PEC in the past has maintained 5 subcommittees as follows:

1. Trade Promotion and Negotiations

2. Technology and Competitiveness

3. Services.

4. Corporate Stewardship

5. Export Administration

When I first heard about the PEC, I wondered whether African Heads of State could benefit from similar Advisory bodies in order to address key economic challenges.  For instance, the PEC has had an impact on US negotiating positions and made significant input in the National Export Strategy.  During the George Bush administration, the growth of the US trade deficit by over 50% was a key issue of concern which the PEC used to influence US negotiations in the WTO Doha round and the regional context.  President Obama’s administration is currently faced with even more dire economic challenges including the recent loss of 8 million American jobs, which will undoubtedly influence the incoming PEC’s work. 

In Africa, this approach could be used to address issues pertaining to competitiveness, agriculture, investment etc. in addition to exports. 

Obama's National Export Initiative 2010

At the recent State of the Union address, US President B. Obama announced his goal of doubling America’s exports over the next five years -– an increase that will support 2 million American jobs. Following this, he issued an Executive Order -The National Export Initiative (NEI), a federal initiative to improve conditions that directly affect the private sector's ability to export.  Currently the US imports from Africa under AGOA, more than it exports to the continent.  The Executive Order will result in the creation of an Export Promotion Cabinet to develop and implement the initiative.  

The NEI is replicated below:

For Immediate Release

March 11, 2010

Executive Order - National Export Initiative

EXECUTIVE ORDER

- - - - - - -

NATIONAL EXPORT INITIATIVE

By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Export Enhancement Act of 1992, Public Law 102-429, 106 Stat. 2186, and section 301 of title 3, United States Code, in order to enhance and coordinate Federal efforts to facilitate the creation of jobs in the United States through the promotion of exports, and to ensure the effective use of Federal resources in support of these goals, it is hereby ordered as follows:

Section 1. Policy. The economic and financial crisis has led to the loss of millions of U.S. jobs, and while the economy is beginning to show signs of recovery, millions of Americans remain unemployed or underemployed. Creating jobs in the United States and ensuring a return to sustainable economic growth is the top priority for my Administration. A critical component of stimulating economic growth in the United States is ensuring that U.S. businesses can actively participate in international markets by increasing their exports of goods, services, and agricultural products. Improved export performance will, in turn, create good high-paying jobs.

The National Export Initiative (NEI) shall be an Administration initiative to improve conditions that directly affect the private sector's ability to export. The NEI will help meet my Administration's goal of doubling exports over the next 5 years by working to remove trade barriers abroad, by helping firms -- especially small businesses -- overcome the hurdles to entering new export markets, by assisting with financing, and in general by pursuing a Government-wide approach to export advocacy abroad, among other steps.

Sec. 2. Export Promotion Cabinet. There is established an Export Promotion Cabinet to develop and coordinate the implementation of the NEI. The Export Promotion Cabinet shall consist of:

(a) the Secretary of State;

(b) the Secretary of the Treasury;

(c) the Secretary of Agriculture;

(d) the Secretary of Commerce;

(e) the Secretary of Labor;

(f) the Director of the Office of Management and Budget;

(g) the United States Trade Representative;

(h) the Assistant to the President for Economic Policy;

(i) the National Security Advisor;

(j) the Chair of the Council of Economic Advisers;

(k) the President of the Export-Import Bank of the United States;

(l) the Administrator of the Small Business Administration;

(m) the President of the Overseas Private Investment Corporation;

(n) the Director of the United States Trade and Development Agency; and

(o) the heads of other executive branch departments, agencies, and offices as the President may, from time to time, designate.

The Export Promotion Cabinet shall meet periodically and report to the President on the progress of the NEI. A member of the Export Promotion Cabinet may designate, to perform the NEI-related functions of that member, a senior official from the member's department or agency who is a full-time officer or employee. The Export Promotion Cabinet may also establish subgroups consisting of its members or their designees, and, as appropriate, representatives of other departments and agencies. The Export Promotion Cabinet shall coordinate with the Trade Promotion Coordinating Committee (TPCC), established by Executive Order 12870 of September 30, 1993.

Sec. 3. National Export Initiative. The NEI shall address the following:

(a) Exports by Small and Medium-Sized Enterprises (SMEs). Members of the Export Promotion Cabinet shall develop programs, in consultation with the TPCC, designed to enhance export assistance to SMEs, including programs that improve information and other technical assistance to first-time exporters and assist current exporters in identifying new export opportunities in international markets.

(b) Federal Export Assistance. Members of the Export Promotion Cabinet, in consultation with the TPCC, shall promote Federal resources currently available to assist exports by U.S. companies.

(c) Trade Missions. The Secretary of Commerce, in consultation with the TPCC and, to the extent possible, with State and local government officials and the private sector, shall ensure that U.S. Government-led trade missions effectively promote exports by U.S. companies.

(d) Commercial Advocacy. Members of the Export Promotion Cabinet, in consultation with other departments and agencies and in coordination with the Advocacy Center at the Department of Commerce, shall take steps to ensure that the Federal Government's commercial advocacy effectively promotes exports by U.S. companies.

(e) Increasing Export Credit. The President of the Export-Import Bank, in consultation with other members of the Export Promotion Cabinet, shall take steps to increase the availability of credit to SMEs.

(f) Macroeconomic Rebalancing. The Secretary of the Treasury, in consultation with other members of the Export Promotion Cabinet, shall promote balanced and strong growth in the global economy through the G20 Financial Ministers' process or other appropriate mechanisms.

(g) Reducing Barriers to Trade. The United States Trade Representative, in consultation with other members of the Export Promotion Cabinet, shall take steps to improve market access overseas for our manufacturers, farmers, and service providers by actively opening new markets, reducing significant trade barriers, and robustly enforcing our trade agreements.

(h) Export Promotion of Services. Members of the Export Promotion Cabinet shall develop a framework for promoting services trade, including the necessary policy and export promotion tools.

Sec. 4. Report to the President. Not later than 180 days after the date of this order, the Export Promotion Cabinet, through the TPCC, shall provide the President a comprehensive plan to carry out the goals of the NEI. The Chairman of the TPCC shall set forth the steps taken to implement this plan in the annual report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Foreign Affairs of the House of Representatives required by the Export Enhancement Act of 1992, Public Law 102-249, 106 Stat. 2186, and Executive Order 12870, as amended.

Sec. 5. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:

(i) authority granted by law to an executive department, agency, or the head thereof, or the status of that department or agency within the Federal Government; or

(ii) functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

BARACK OBAMA

THE WHITE HOUSE,

March 11, 2010.