EGYPT-KENYA DISPUTE OVER
TOILET PAPER STANDARDS
here for teaching notes
December 2000 the Kenya Bureau of standards (KEBS) refused to release a
consignment of Egyptian toilet paper on the grounds that the internal
tube on which the toilet papers are rolled were smaller than that
required by a Kenyan regulation. The
regulation stated that the tube must be of certain diameter.
As a consequent the toilet paper could not be imported into
free trade area (FTA) for the Common Market for Eastern and
was launched on
31st October 2000
Nine (9) countries are participating in the FTA.
Effective 31st October 2000, the 9 countries started
trading on duty and quota free terms for all goods originating from
within their territories. The
agreement provides for duty-free treatment for a large number of
products that satisfied the COMESA rules of origin requirements.
Egyptian Trade Representativeís Office (ETRO) in
expected that the agreement would provide a certain group of commodities
a significant competitive advantage and identified toilet paper as one
of these products. The ETRO office undertook market surveys,
which showed that all consumersí categories were willing to buy the
Egyptian toilet paper rather than the Kenyan product.
The Office also found that Egyptian exporters by reducing their
price marginally could win a reasonable market share.
Working with the Egyptian exporters, the ETRO office convinced a
large Kenyan distributor of toilet to bear the cost of advertising
Egyptian toilet paper on television and in newspapers.
In exchange, the Kenyan exporter offered the distributor credit
toilet paper exporters considered the Kenyan market to be for them one
of the most important in
. The Egyptian exporters estimated
that size of the Kenyan toilet paper market to be nearly USD $10 million
a year, and they felt that they could easily capture 40% of it because
of the competitive advantages provided them by the COMESA FTA.
Kenya Bureau of Standards (KEBS) is the national standards organization
The KEBSís website states that:
technical standards work of the KEBS is carried out by technical
committees grouped under technical departments. The results of the KEBS
technical standards work are published as
national standards. It is the policy
of the KEBS to adopt other national, regional and international
standards when these are found to be applicable to the Kenyan situation.
KEBSís website also contains the following statement regarding
inspection of imports:
Inspection of imports is carried out at the ports of entry to create a
level playing ground for the imported and locally manufactured goods
according to TBT agreement of WTO for imported products.
Imported commodities are allowed into the country upon issuance
of a certificate of release by the Bureau.
inspection fees for imported commodities is 0.2 per cent of the C and F
value and is payable before issuance of the certificate of release.
Imports that are tested by Kenya Bureau of Standards and found
not to comply with the requirements of the relevant Kenya Standard(s)
are not allowed to be sold in the Kenyan market. The importer has to
return them to the country of origin at his own cost. (http://www.kebs.org/)
The standard applicable to
toilet paper is KS 03-24:1996 -- SPECIFICATION
FOR TOILET PAPER IN ROLLS AND REELS (FIRST REVISION).
This 18 page standard specifies the requirements, sampling and
test methods for toilet paper supplied in rolls and reels.
has only one large domestic producer
of toilet paper and this producer has had a monopoly position in the
domestic market. The
producer is reported to have political influence and close connections
to many high-ranked Kenyan government officials. The Kenyan producer
started a press campaign against the Egyptian toilet paper.
The campaign claimed that the Egyptian paper was not recyclable
and was therefore not environmentally friendly.
The ETRO office in
has sought to refute that claim on
the grounds that the Egyptian product has an internationally approved
certificate. The ETRO office
and the Egyptian exporters are concerned that time is not on their side
since the rejection of their shipments and the press campaign threaten
to wipe out their competitive advantage.
Egyptian exporters complained that they did not see a need for the
standard. As the tube in an
Egyptian roll of toilet paper is slightly bigger (i.e., a larger
diameter) than the size mandated by the
standard, it still fits in the same
tissue holder as the Kenyan one. They
were not sure if the Kenyan standard was based on an international
standard. Further, they
noted that both the Kenyan role of toilet paper and the Egyptian role
are labeled with the number of sheets, so consumers will know what they
are getting. The Egyptian
manufacturers were not willing to modify the size of their tubes since
they felt this would be too costly and time consuming.
rejection of the shipment by the KEBS, the ETRO office in
held several meetings with relevant Kenyans authorities, but the
meetings have not resulted in any change in the position of the Kenyan
side. The ETRO office met
mainly with officials from the Ministry of Trade & Industry (MITI)
and KEBS. According to
reports, the MITI officials showed more understanding and flexibility
than the KEBS officials who contended that the Kenyan standard should be
respected. The ETRO office
also met with the Kenyan Ministry of Finance, but reportedly found that
the ministry was primarily concerned about the revenue implications of
the lower duty on toilet paper mandated by the COMESA agreement.
are WTO members and are members of the African
Regional Organization for Standardization (ARSO) (http://www.arso-oran.org/).
ARSO is an African inter-governmental Organization established in
1977. ARSOís mandate is to promote standardization
. To facilitate African
economic integration, ARSO's program is designed to promote the
removal of technical barriers that hinder intra-Africa trade and
integration. Both KEBS and
the Egyptian Organization for Standardization and Quality Control (EOS)
are member bodies of the International Organization for Standardization
that you are to represent
at the next meeting of the WTO Committee on Technical Barriers to Trade
and that you have been asked to discuss the toilet paper standards issue
youíre your Kenyan counterpart. In
order to prepare a position paper for the meeting, what additional
information will you need or should you have?
What information will you try to obtain or confirm during the
meeting? What points will
you make at the meeting? What
concerns will you have? What
will be your objectives at the meeting and what options will you have
after the meeting?
that you are the Kenyan representative to the next meeting of the WTO
Committee on Technical Barriers to Trade and you have received the
request from your Egyptian counterpart for a meeting regarding the
toilet paper issue. In order
to prepare a position paper, what additional information do you need or
should you have to prepare for the meeting?
What points would you like to make during the meeting and what
concerns will have? What
options will you have?