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Protection of cars, dairy blocks EAC trade deal with south Africa

The EAC did agree to carry out an analysis on the implications of scrapping duty on motor vehicles. FILE PHOTO | NMG
The EAC did agree to carry out an analysis on the implications of scrapping duty on motor vehicles. FILE PHOTO | NMG 

Protection of East Africa’s dairy and motor vehicle industries from competition is one of the stumbling blocks facing a trade agreement with southern African states.

The East African Community (EAC) is negotiating a deal with the Southern African Customs Union (SACU) to scrap import duty on at least 60 per cent of products traded between the blocs.

However, a report released last week by the Council of Ministers on EAC Affairs and Planning shows that the two bodies failed to agree on several key tariff lines in a September meeting in Johannesburg.

SACU requested that the EAC scrap duty on dairy products and motor vehicles within five years of signing the deal. The EAC did not respond positively.

“On motor vehicles and dairy products, (the) EAC has responded that the products are sensitive due to their strategic importance for economic development in the EAC,” says the report.

The EAC did agree to carry out an analysis on the implications of scrapping duty on motor vehicles.

SACU also asked for immediate the liberalisation of trade in refrigerators, plastic tubes, beef, salt and wines once the deal is signed. EAC “agreed to offer only refrigerators for immediate liberalisation,” pleading time to consult on the rest.

The southern African countries were similarly unreceptive of EAC’s request to liberalise trade in textiles, cut flowers, edible oils, fruit juices, coffee and vegetables.

SACU’s member states are South Africa, Botswana, Lesotho, Namibia and Swaziland.

The blocs have already agreed to liberalise 66.7 per cent and 64.25 per cent of tariff lines, respectively.

These tariff negotiations are part of a larger deal between three trading blocs in East and Southern Africa which would create a single market for 26 countries.

The Tripartite Free Trade Area (TFTA) agreement was supposed to be ratified in December 2015 but has repeatedly been delayed.

The EAC has set itself a deadline of December 2017 for ratification.

Blocs fail to agree on several key tariff lines in a Sept meeting in Johannesburg

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