Protectionism can be achieved by amending certain laws to ensure that even if the agreement is signed, the region is protected from destruction of the domestic industry.
The US and China have locked horns in a number trade wars involving tariffs used as a barrier. The East African Community (EAC) is in the process of signing an economic partnership agreement with the European Union (EU).
Kenya and Rwanda have signed the pact while Tanzania failed to do so arguing that the agreement may have adverse effects on its economy. In brief, the it seeks to open up the EAC to goods and services from the EU.
Many have argued that signing the agreement may have certain adverse effects the major one being on the domestic industry.
Goods from the EU are likely to compete with those in the local market therefore negatively affecting domestic industries. This in turn may impact jobs.
There is a possibility of employing legal protectionist measures in the wake of the proposed EPA, which is likely to lead to liberalisation in favour of the EU.
It is argued that due increased competition, there is a need to protect the EAC industries by enacting adequate domestic legislation. In as much as liberalisation has been encouraged in global context, a level of protectionism is important to preserve vital industries.
Protectionism can be achieved by amending certain laws to ensure that even if the agreement is signed, the region is protected from destruction of the domestic industry.
The relevant laws to amend may include competition, intellectual property laws and anti-dumping laws of the EAC both at regional and member state level. It would be important to establish the adequacy of such laws so far as protectionism is concerned.
In assessing the adequacy, it is crucial to benchmark the competition laws with the United Nations Conference on Trade and Development (UNCTAD) model competition law, model the intellectual property laws against Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS) Article 40 while the anti-dumping laws should use Article VI of the General Agreement on Tariffs and Trade (GATT) as the adequacy measure.
Currently at regional level the EAC has a competition law and anti-dumping law which are satisfactory, but it lacks an intellectual property law.
The legislative environment at regional level is satisfactory, however, the institutional capacity is insufficient due to lack of autonomy of the EAC institutions.
At partner state level Kenya and Tanzania have good legislative environment and Kenya has a stronger institutional capacity than Tanzania whose institutions were not all autonomous.
Rwanda has a satisfactory legislative environment despite lacking an anti-dumping and competition law. Despite lacking a competition law it has an institution, the National Inspectorate and Competition Authority (NICA) that deals with competition law.
Uganda has the weakest legislative and institutional environment as it lacks competition and anti-dumping laws and institutions. A number of legislative and institutional reforms are recommended for the region and these included legislation of competition and anti-dumping laws for Rwanda and Uganda; strengthening institutional capacity by creating autonomous institutions, buttressing institutional mandates and harmonisation of EAC laws with global best standards.
I would recommend a cautious approach to the EPA while not necessarily advocating for its discarding.
There should be a careful renegotiation of the EPA while conducting the necessary legislative and institutional reforms so as to position the region and individual member states to reap maximum benefits from the agreement.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
