Recent reports of fish and fish feeds imports from China flooding markets in Kenya and the region should be a public policy concern to governments and all trade policy stakeholders in the region for its immediate and long term implications.
The global community led by advanced economies of Europe, East Asia, North America and, increasingly, China have traditionally advocated trade liberalisation, which in effect means that countries’ markets should be open to all goods and services, and subject only to market forces. This view assumes that the market is a self-regulating machine which will balance everyone’s needs using forces of supply and demand.
However, even with this free trade orthodoxy, the international community have never truly liberalised the food market.
Japan, for instance, has some of the strictest regulations on fish and fish feeds imports, and largely bans exports from the country due to food security concerns and a strong fish eating culture.
The US and Europe, on the other hand, have often banned fish and food imports from other countries including East Africa using an array of measures colloquially referred to as “sanitary and phytosanitary measures” in international trade parlance.
Therefore, it as somewhat surprising when Kenya’s Ministry of Trade and Industrialisation recently appeared to brush aside concerns over flooding of cheap Chinese tilapia into the region, and justifying it on market deficit and the fact that importers pay requisite tax to regional authorities.
Perhaps, unintendedly, the ministry also succeeded in portraying its mandate as limited to trade facilitation as opposed to domestic industrialisation and sustainable food security.
Whilst there is some fact to market deficit arguments, there is greater risk of it obscuring the real long term challenges the region faces in an environment of unregulated importation.
And emerging data at the moment is scary. For instance, in 2017, the EAC imported over $18 million worth of fish and fish feed products from China representing more than 100 per cent growth from 2014 figures.
In terms of impact, marked market displacement of domestic fish producers and traders has been reported in Kenya, Uganda and Tanzania with traders reporting unfair pricing and competition from Chinese fish importers.
Unfortunately, fish and food importation generally is not so simple an issue to be wished away. It is also one trade area that governments in other regions have never left to market forces for a number of reasons.
First, as an important food item, fish is actually a national security issue that can easily precipitate civil strife. In an environment where those perennially dependent on the sector feel deprived and commercially displaced by artificial forces, there is likelihood of it morphing into dissent and eventually violent strife.
Two, any close observer of China’s recent growth will easily pinpoint several success areas but one widely acknowledged black spot remains food safety concerns.
Many countries including Chinese territories of Hong Kong and Taiwan have on several occasions imposed stiffer restrictions on food products from Mainland China for these precise reasons.
Public concerns in the region over quality of imported fish from China including their production environment fit into this pattern. Moreover, capacity constraints within the EAC region means that local authorities are largely ill-prepared to undertake market surveillance and regular inspections to buttress these genuine economic and public health concerns.
In any case, it’s a widely acknowledged fact that China’s recent growth has been partly fuelled by compartmentalised development model in which entrepreneurs are incentivised to produce or manufacture for specific global market zones.
Presumably, under this arrangement Chinese exporters to Kenyan market, for instance, are not necessarily the same ones exporting to the US and Europe.
The EAC region is likely at a higher risk of receiving poor quality and substandard Chinese products including fish under this arrangement.
And as is often the case with many food security concerns built around skewered trade relations, the solutions are straightforward but hardly politically palatable.
On Chinese fish imports, in particular, policy decisiveness to reverse the trend is imperative. Kenya and the EAC needs to put in massive investment in inland and offshore aquaculture through strategic early-stage subsidy for entrepreneurs, and have broad-based bans on imports, creating domestic and regional markets.
These can be done through strategic partnerships and private sector incentivisation.