EAC fails unity test ahead of common market launch

Fresh differences have emerged among East African Community member states over the planned launch of a common market early next year.

Trade experts said the protocol that establishes the regional market has left room for national governments to erect new trade barriers without breaching the accord – posing new threats to the free flow of goods and services.

Sharp differences among member states have forced negotiators to leave room for different standards regulation, varying immigration procedures in the protocol that heads of state are due to sign later this month.

A central revenue body is also yet to be established as is the practice in other common markets.

“Partner states are still reluctant to change from national to regional orientation as manifested in the form of non-compliance with regional laws, and in duplication of activities that would be better handled at regional level,” said Evarist Mugisa, a trade economist and lead researcher in a survey that evaluated the impact of the EAC customs union.

In a fully fledged custom union (also known as a common market), member states not only undertake to eliminate tariffs on goods and services from member countries but also promote free movement and access to factors of production such as capital, labour and land.

Uganda has up to the end of the year to eliminate the two per cent tariff it levies on 426 products from Kenya.

The tariff barrier has been dropping gradually at the rate of two per cent annually since the launch of the customs union.

Tanzania has the same time frame to eliminate the tariff it still levies on 146 products from Kenya.

The tariff level has declined progressively to 5 per cent (from 25 per cent in 2005).

Trade experts reckon that growth of non-tariff barriers (NTBs) despite the planned progression to the next level of integration betrays the unpreparedness of the trading bloc to start operating as a single custom entity by early next year.

While EAC secretariat has established separate committees to reconcile revenue, immigration and standards in the region, the decision by heads of state to sign the protocol by the planned date of November 20 has thrown negotiators off balance.

That means the January rollout of the common market will kick off with member states still governed by national laws and institutions.

“The EAC time table is too ambitious. A lot of time consuming reforms are still needed to spur mass production and ease circulation of goods within the region in a way that also benefits the landlocked members,” Mr Tim Clarke, a EU representative in Tanzania, told a high level EAC team meeting in Arusha last week.