EAC STATES WARNED NOT TO DITHER OVER TRADE TARIFFS

Executive director of the East African Business Council (EABC), Peter Mathuki.

The East African Community (EAC) partner states have been implored not to compete with each other over the review process for imported goods.

Instead they should direct their energies on promotion of intra-regional trade for goods and services produced within the region.

"Stop competing with each other but instead take not of each other's comparative advantage" stressed Peter Mathuki, the executive director of the East African Business Council (EABC).

He made  the appeal in Nairobi early last week during a meeting of the Regional Task Force on the Review of the EAC Common External Tariff (CET).

He said the apex body of private sector associations and corporates appreciated the progress made in the review process which started two years ago.

Notable among these is finding convergence of the tariff lines under consideration for the rate above 25 per cent.

Mr. Mathuki, nevertheless, urged the six partner states in the economic bloc to fast track the finalization of the comprehensive review of the CET.

This, he insisted, would spur local production and increase trade among the EAC partner states.

He added that CET would encourage  forward and backward linkages in the manufacturing sector.

The meeting in the Kenya capital was attended by trade experts from the partner states, the EAC Secretariat, EABC and TradeMark East Africa.

It emerged from the talks that the member countries in the bloc - Tanzania, Uganda, Kenya, Burundi,Rwanda and South Sudan - have agreed to assign a rate above 25 percent to 442 tariff lines. 

Also agreed is for the partner states to submit national production data for textiles, steel products and motor vehicles by February 28th.

According to EABC, the entire CET review process would be finalized by July this year with the implementation of the revised tariffs starting forthwith.

The review process took off in earnest in 2018 when the secretariat announced formation of  a task force to review CET for goods imported into the region.

The current CET for the EAC bloc came into force from January 1st , 2005 when the Customs Union protocol came into force.

This was later to be followed by zero duty on goods and services traded among the countries in the economic bloc with goods moving freely within the region having to comply with the EAC Rules of Origin.


CET is introduced when a group of countries form a customs union. It is designed to end re-exportation within the bloc but may also inhibit imports from outside the customs union.

The same customs duties, import quotas and other non-tariff barriers to trade apply to all goods entering the area, regardless of which country within the bloc they are entering. 

The review process has, however, been plagued by differences by the partner states 
mainly due to divergent views of the member countries on the maximum CET rates.


 







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