EABC pushes new regional trade integration roadmap  

It lists 17 problem areas to be quickly addressed to double intra-EAC trade and investment within the next three years, detailing the challenges and setting fresh deadlines for solutions.

A 2023 EABC report indicates that the value of trade between EAC countries dropped by more than 33 percent from $5.4b to $3.6b between 2021 and 2022.

This is in contrast with EAC Secretariat figures depicting an 11.2 percent growth from $9.81b to $10.91b during the same period.

Top of the EABC’s new agenda is the need to address non-uniform application of EAC-Common External Tariff (CET) rates agreed by partner states, which it says is seriously hampering the creation of a level playing field within the EAC Customs Territory.

“Despite the adoption of a four-band EAC tariff structure that took over five years of consultations to finalise, there are still persistent applications of stays and country-specific duty remissions, which have distorted the structure’s implementation and therefore need to be minimised,” the document states.

It explains that goods made by raw material inputs that benefit from duty remissions in one country cannot receive preferential tariff treatment when transferred to another country, a factor that discourages the building of a consolidated regional value chain.

Stays of applications

The roadmap notes EAC Secretariat plans to conduct an assessment of the effectiveness of the revised EAC-CET 2022 version that will provide a blueprint for future stays of applications and duty remissions requested by each country.

It proposes that the blueprint be ready by 2027 at the latest.

On NTBs, the roadmap sets a 2026 deadline for finalising amendments to the EAC Elimination of Non-Tariff Barriers Act of 2017 so that it can start being implemented and pave the way for partner states to speed up the process with clear timelines.

According to the regional business lobby, although 269 NTBs have been resolved cumulatively since 2017, the pace has slowed significantly, with only two resolved since July 2023 and nine outstanding.

Meanwhile, NTBs have remained a major hindrance to promoting trade and investment between EAC member states, increasing transaction costs and curtailing movement of goods across borders, the council said.

A 2027 deadline was set for a “long overdue” review of existing EAC rules of origin criteria due to the existence of the revised EAC CET 2022 and other new criteria for AfCFTA and a proposed Tripartite Free Trade Area between EAC, Comesa and Southern African Development Community.

The EABC says the EAC’s “stringent” rules of origin, in force since 2015, have been preventing value-added products such as edible oils and cement from accessing the preferential EAC market, causing huge losses to some traders.

Other priority interventions proposed by the EABC include fast-tracking the establishment of a functional EAC trade dispute settlement mechanism via a trade remedies committee, that will deal with particularly sensitive matters such as conflicts over rules of origin and antidumping measures.

According to the EABC, the committee’s introduction is still awaiting the addition of new members to the EAC Customs Union Protocol aside from the bloc’s founding states Tanzania, Kenya and Uganda.

Of the other five partner States, only Burundi has ratified and deposited instruments of ratification of the customs protocol.

The EABC roadmap also sets new time frames and deadlines for harmonising EAC product standards to cut down on time-consuming re-testing processes across borders and streamlining domestic tax regimes to do away with double taxation and discriminatory taxes.

It looks to speed up the full liberalisation of intra-EAC trade in services in sectors such as energy, environment, health and social services.

Other key sectors are construction, recreation, culture and sports, air transport services and telecommunications; and on movement of workers across borders, including regulated field professionals such as architects, accountants, engineers and veterinarians.

Another key area to be addressed is the prevalence of high transport and logistics costs caused by port delays and unharmonised road and weighbridge tolls, with EABC pledging to push for better coordination of electronic cargo tracking systems run by the Northern and Central Transport Corridors.

Implementing the AfCFTA
 
On implementing the AfCFTA agreement as a bloc, the council’s roadmap highlights several challenges including South Sudan’s reluctance to sign the agreement so far, DR Congo’s submission of separate and different tariff offers to that of EAC. It says partner states have also been “taking too long”  to agree on common positions on contentious issues under the agreement, including the treatment of products manufactured under export processing zones.

EABC also criticises some EAC member States for opting to go it alone in signing trade pacts with external partners after others appeared to balk, citing the EAC-EU Economic Partnership Agreement, EAC-UK Economic Partnership, and EAC-US Trade and Investment Agreement as specific examples.

“These individual approaches may create intra-EAC trade disruptions, EAC-CET conformity disturbances, and mistrust among partner States,” it says, asserting that such agreements should be negotiated collectively for the good of the bloc’s unity and integration agenda.

It says EAC experts agreed at a meeting on the Kenya-UK EPA’s compliance with the EAC Customs Union Protocol that the EAC secretariat should open negotiations with the UK by July 2024 for another EPA that will preserve the protocol’s integrity.

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