As EABC celebrates 20 years, trade barriers slow down business

Saturday March 17 2018

To ease trade across the region, Tanzania

To ease trade across the region, Tanzania waived $40 sticker fees for trucks at weighbridges on the Central Corridor. FILE PHOTO | NMG 

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East African governments are under pressure to resolve longstanding trade disputes and remove non-tariff barriers that have slowed economic integration.

As the East African Business Council celebrates its 20th anniversary on March 22 and 23 in Nairobi with a series of high-level events, the spotlight is on the gains and hindrances to integration.

Lilian Awinja, the EABC executive director, said the council seeks to address integration and industrialisation challenges.

Regional businesses will convene at the Kenyatta International Convention Centre to showcase domestic value-added products that are set to transform the bloc into an upper-middle income economy by 2050.

“The exhibition will feature products and services grown, developed or manufactured in East Africa,” Ms Awinja said. “Promotion of local industries to manufacture and offer more products and services is critical for the realisation of the Buy and Build East Africa campaign.”

At the EAC Heads of State Summit in Kampala last month, regional leaders directed the secretariat to ensure that the Customs Union Protocol, the Common Market Protocol and the EAC Elimination of NTB Act, 2017 are implemented.

Non-tariff barriers

According to a report by the EAC Council of Ministers to the presidents, by August 30, last year there were 18 longstanding NTBs.

Among them is Uganda’s restriction on imports of beef and beef products from Kenya. Although Uganda should have lifted the ban in accordance with the recommendations of the bilateral meeting held between Uganda and Kenya in October 2015 in Nairobi, Uganda says it is still in the process of resolving it.

Another barrier is the requirement by the Tanzania Food and Drugs Authority (TFDA) that companies exporting to the country register, re-label, and retest certified EAC products.

This requirement has been in place since 2003. According to the Common Market Protocol, TFDA should recognise the marks of quality of partner states.

Since 2016, Tanzania has been denying preferential treatment on automotive products manufactured in Kenya by Toyota Tsusho East Africa Ltd when exported to the country.

The products are subjected to the common external tariffs (CET). It is expected that the two countries will conduct a bilateral verification mission in Kenya to establish if the automotive products meet the EAC Rules of Origin criteria.

Cigarettes manufactured in Kenya and exported to Tanzania are required to have 75 per cent local tobacco content, a requirement imposed in 2009. It is expected that Tanzania will repeal the regulation, but it says it is still consulting on the matter and will provide feedback by June this year.

Edible oils manufactured in Kenya and exported to Tanzania and Rwanda are supposed to be under the preferential treatment, but they have been subject to CET since 2016.

It is expected that the on-going comprehensive review of the CET and revision of the EAC Rules of Origin on edible oil will address this barrier. The secretariat is set to co-ordinate a verification mission on edible oils, cement and lubricants in Kenya by March 31 this year. 

To address some of the NTBs, Tanzania has waived the $40 sticker fees for trucks at weighbridges on the Central Corridor. Uganda is considering installing high-speed weigh-in motion weighbridges like the ones in Kenya.