Peter Mutuku Mathuki took over as the secretary-general of the six-nation East African Community (EAC) bloc on April 25, pledging to deliver a “stronger and more formidable” trading bloc at the end of his five-year term. Dr Mathuki (right) is not new to regional integration issues.
He served in the East African Legislative Assembly (EALA) for five years to 2017 before taking reins as chief executive of East African Business Council (EABC) — the regional business lobby for private sector — from October 2018 until his latest appointment. He spoke to Business Daily.
HOW HAS YOUR EXPERIENCE AT THE LEGISLATIVE ARM OF THE EAC AND LATER AS A CHAMPION OF PRIVATE SECTOR INTERESTS PREPARED YOU FOR YOUR NEW ROLE?
I have gained experience and a sound understanding of regional politics and its effects on regional integration, business and individual countries.
Having worked in different capacities under the umbrella of the EAC, I am well aware of the opportunities that are available for exploitation, as well as the challenges that the Community and individual partner States face.
I will use my experience, and valued partnerships that I have picked along the way to work towards creating a more integrated and stronger Community that is able to withstand the challenges to come.
ONE OF THE BIGGEST THREATS TO REGIONAL INTEGRATION IS ON-AND-OFF DISPUTES AMONG MEMBER STATES WHO SOMETIMES RESORT TO ERECTING TARIFF AND NON-TARIFF BARRIERS (NTBs). HOW ARE YOU GOING TO ADDRESS THIS CHALLENGE?
My preferred approach would be to prioritise the full operationalisation of the EAC Elimination of Non-Tariff Barriers (NTBs) Act, 2017 and the establishment and full operationalisation of the EAC Committee on
Trade Remedies to handle persistent trade disputes in the region. I will also focus on strengthening the capacity of the National and Regional Monitoring Committees on the resolution of NTBs to identify and resolve any imposed NTBs.
The removal of NTBs is expected to drive intra-regional trade to at least 30 percent in the short-term from the current 15 percent. My target is to have it grow to more than 50 percent by the end of my tenure.
WE HAVE LARGELY SEEN INDIVIDUAL MEMBER STATES ENGAGE TO RESOLVE DISPUTES BETWEEN THEM, WITH LITTLE INVOLVEMENT FROM THE EAC SECRETARIAT. HOW DO YOU PLAN TO HANDLE THIS?
My aim is to strengthen the Secretariat to better support Partner States in trade negotiations and in operationalising mechanisms to unlock disputes among themselves. The EAC Elimination of NTBs Act, 2017, shall facilitate the resolution of persistent NTB and force Partner States to refrain from imposing new ones.
The mechanisms to report and resolve NTBs, as stipulated in the NTBs Act 2017, include compensation where the Council (of Ministers) finds that the imposing Partner State caused unnecessary trade loss to the affected Partner States as shall be determined by the Committee on Trade Remedies. It is my goal that this Committee is established and empowered to deliver on its mandate.
My other key area of focus on this is to strengthen the available dialogue with Partner States through their established National Monitoring Committees and the Regional Monitoring Committee on the resolution of non-tariff barriers — where such exist — and other inconsistent laws that frustrate intraregional trade and investments.
KENYA, BEING THE ONLY LOWER MIDDLE-INCOME COUNTRY IN THE BLOC, HAS RECENTLY FOUND ITSELF ISOLATED WHEN NEGOTIATING FOR INTERNATIONAL TRADE TREATIES WHERE ITS EXPORTS WERE FACING INCREASED TARIFFS IN ABSENCE OF A DEAL. CASE IN POINT WAS THE RECENT POST-BREXIT DEAL WITH THE UK AND BEFORE THAT IT WAS WITH THE EU BACK IN 2016. WHAT IS THE LONG-TERM SOLUTION TO THIS?
The EAC has an obligation to implement all the provisions of the EAC Treaty, its protocols as well as decisions and directives from the EAC policy organs.
In terms of the EPAs (economic partnership agreements), the EAC Summit has provided guidance whereby partner States that are ready to implement the agreement should go ahead and do so.
Therefore, it is expected that within the confines of the EAC Treaty, we have solutions to fast-movers like Kenya.
On a sustainable basis, however, all EAC economies will be assisted to grow to middle-income status through harmonised economic policies.
When each of the EAC partner States has something to sell to the new negotiated markets on a competitive basis, negotiation and implementation of trade preferences will be a very welcome idea to all the partner states.
WHAT PRACTICAL SOLUTIONS ARE YOU BRINGING ON BOARD TO UNLOCK THE LONG-STANDING STALEMATE AMONG EAC MEMBERS OVER THE COMMON EXTERNAL TARIFF (CET) FOR THE BLOC?
The finalisation and comprehensive review of the common external tariff and its uniform application in the bloc is long overdue. One of my priorities is to work with the Secretariat and partner States to fast-track the process by the end of this year. We will do this by ensuring that all member states focus on its conclusion for the purpose of promoting local industries and products in each of the partner states.
Despite a legal framework for standards in place, there have been cases where goods from one member State has been subjected to double testing and standardisation, and that means increased cost of doing business.
The Standardisation, Quality assurance, Metrology and Testing Act 2006 provides a framework for mutual recognition of test certificates and product certification marks. There is a need for capacity building in all the partner States to adopt and implement the mechanisms in place to enhance intra-EAC trade. It is also necessary to deliberately engage with the private sector, development partners and regulatory authorities, including national standards bodies. This will help to, among others, adopt risk-based standards development and conformity assessment to address the issues of unnecessary costs and burden to the traders in this area.
HOW DO YOU PLAN TO RESOLVE THE PERSISTENT RECURRENT BUDGET CHALLENGES at THE SECRETARIAT?
This is an issue which has affected the performance of the Secretariat in the past. Going forward, we plan to address this by encouraging partner States to make their remittances on time and coming up with sustainable solutions to those that may be facing challenges in doing the same. We shall also revisit the alternative financial mechanism once proposed so as to enable EAC to collect its own expenditure money from taxes on imported goods.
WHAT LEGACY WOULD YOU LIKE TO LEAVE BEHIND?
The focus of the EAC has been and continues to be regional integration among partner States. It is my goal that by the time my tenure draws to a close, we will have a stronger, more formidable Community that benefits all its citizens politically and from a business perspective.
The Community is also expanding, Somalia has applied to join the bloc and we are fast-tracking deliberations with the hope of reaching a conclusion later in the year. The DRC is also in the process to join the Community. Our plan is to work to create an EAC that becomes a global player of repute while meeting the needs of its citizens.