Type: Economics
Pages: 3 | Words: 625
Reading Time: 3 Minutes

The World Trade organization (WTO) introduced the Aid for Trade Agenda as a way of helping developing countries address the constraints that faced their capacity for trade. Developing countries have had problems that arise from public spending deficits. The sectors that have suffered because of financial gaps include agriculture, transportation, communication and business sectors. In Kenya, the World Trade Organization (WTO) has implemented the Aid for Trade initiative.

In Kenya, the Aid for Trade by the WTO has been evident in the horticultural sector. Flower exporters had been barred from exporting flower to the European Union and the US markets because of the presence of pesticide residues on flowers’ blooms. In 2005, the WTO came in and offered an aid of about 5 million Euros. Today, Kenya has become competitive and one of the largest exporters of cut flowers to the market of the European Union.  It has extended the percentage from 11 percent to 32 percent market share within a few years (Organisation for Economic Co-operation and Development, 2005).

The matter of morality, concerning the Aid for Trade initiative, is to help reduce the difference in trade opportunities that exists between developing and developed countries. In turn, this helps developing countries address their trade and poverty issues. For instance, with aid from the WTO, Kenya was able to transform its flower business. In 2011, Kenya earned 700 million dollars from horticulture. The flower sector now employs two million Kenyans directly. Therefore, the Aid for Trade helped Kenya to employ more people and drive them out of poverty. Kenya also benefited as a country because of the profit it gets from the flower sector and the market share it has in the European Union (Shaffer & Meléndez-Ortiz, 2010).

The legal framework for this aid, in Kenya, is the December 2005 Hong Kong Ministerial Declaration tied to the conclusion of the Uruguay Round. Paragraph 57 of the Declaration requests for the assistance of donor countries to contribute to Aid for Trade initiative by helping developing countries build supply-side capacity and trade infrastructure. This is supposed to help developing countries, Kenya included, implementing and benefiting from the agreements reached by the WTO and expanding their trading opportunities. Therefore, the Aid for Trade on the flower sector in Kenya is founded on the Declaration as its legal framework (Lester, 2007).

Irrespective of the benefit to Kenya, in terms of its positive effect on trade and the lives of Kenyans, it has not been effective. The parameters, set under the legal framework of the Aid for Trade initiative, are vague and unclear. They only set out a general principle of the way the Aid for Trade initiative will operate. The main components of the program are training and support of the officials, institutional and technical teams geared towards the implementation of trade agreements and adaptation into the rules and regulations of the WTO. The monitoring of the Aid for Trade initiative has also not been established exhaustively. This is because all the reports of the initiative are supposed to be discussed at the annual debate convened in the General Council of the WTO. Therefore, this opens room for misuse of funds in the flower sector, in Kenya, because responsibility lies only on the people directly linked to the flower sector (Lester, 2007).

In conclusion, the Aid for Trade initiative in Kenya has helped the country gained a big market share in the European Union and the US markets. It has improved the lives of more than two million people in Kenya. The aid was implemented based on the December 2005 Hong Kong Ministerial Declaration. However, its weakness lies on the vagueness of the legal framework and monitoring of the Aid for Trade initiative. The implementation of the legal framework and monitoring is not strong.

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