Regional trade shouldn’t be hostage to bilateral negotiations, says UMA

Following the trade tension between Uganda and Kenya, the two neighbouring countries entered a deal that to many, has issues. Do you have any qualms with the communiqué  that the two countries endorsed last month, considering that you had raised a red flag before over Uganda’s exports to Kenya?

While all efforts to resolve market access challenges by our members are welcome and we note that the meeting outcomes indicated progress towards resolution of long-standing challenges, we are frustrated that trade that should be guided by a clear EAC framework (enshrined in the Common Market Protocol) is now hostage to bilateral negotiations.  For sustainability of trade in the region, a regional dispute resolution mechanism that is enforceable and able to bring sanctions to bear on errant states is a more permanent solution and one that would cure the embarrassment of partner states having to seek permits and comply with quotas in order to supply their neighbors in total contravention of the ideals of the EAC Treaty.

Issues of milk and maize were not resolved in that communique although it was considered crucial. The postponement to deal with these matter waters down the importance of the communique.

The postponement of discussions on these crucial items is indeed disappointing to the companies that continue to struggle to maintain their operations with limited markets and no sign of hope on the horizon. We continue to urge expeditious conclusion of the negotiations while reiterating the need for a strong EAC Secretariat that is armed with the power to adjudicate on such issues with binding resolutions to the same. 

Do you think the communique captured the frustrations of Ugandan exporters to Kenya in its entirety?

Certainly not.The communiqué was a representation of the discussions held between the Governments of Uganda and Kenya. Indeed, some areas such as market access were highlighted but it is short of highlighting the several frustrations of Ugandan exporters to Kenya.

We, however, welcome the dialogue as a recognition of the existence of a challenge and a signal of commitment towards resolution of the challenges. Whether the discussions will yield results, however, remains to be seen.

As UMA, did the communique live up to your expectations?

The communique partly lived up to our expectations because it has been our outcry to see the two governments sitting down to resolve the market access challenges that have been affecting Uganda’s exports. However, the focus on only a few of the several products with which we have challenges related to market access and the uncertainty on whether the agreed positions will be implemented – in light of negative past experience – are shadows hanging over any expectations we may have.

You had earlier threatened to drag Kenya to the East African Court of Justice (EACJ) over the incessant non-tariff barriers meant to frustrate Uganda’s exports into the neighbouring country. Do you still hold the same view?

As far as UMA is concerned, all options are on the table. As we welcome the dialogue demonstrated by the communique, we have continued working with our team of lawyers to prepare our case for submission to the EACJ. This will ensure that we do not have such scenarios in the future and that we have a private sector driven integration process as aspired by the EAC Treaty.

This is not the first kind of “trade ceasefire” mission that has been held between the two regional countries. How different were the previous ones?

Therein lies the explanation of our cautious optimism in welcoming the discussions held. Previous experience shows limited progress attained from similar dialogue but we hope that progress will be attained this time round. ‘The proof of the pudding is in the eating’.

Uganda’s exports have severally been denied entry by other regional countries other than Kenya. More or less the same challenges are evident when accessing Tanzanian or Rwandan market. What are your thoughts on that?

The bigger discussion is on EAC market access challenges and how to ensure that partner states comply with their commitments per the EAC Treaty and its protocols. There is need for a robust EAC with institutions that can  resolve any market access disputes without recourse to politics or bilateral discussions. We believe the model shown by the European Commission in resolving similar disputes is an ideal blueprint to use in addressing our own challenges.  

Can Ugandan manufacturers be competitive in the region in terms of churning out affordable locally-manufactured products?

We do. Walk into any supermarket or neighbourhood shop in Uganda and you will see the shelf space dominated by Ugandan made products. Gone are the days when we were beholden to our neighbours for access to the most basic of commodities. Beyond Uganda, our products are winning accolades globally and we are exporting products to far flung locations including the European Union and America where these products compete favourably with products from those hyper competitive markets.

This capacity growth has proven challenging for our trade partners who now see our products as a threat to their own products hence the incessant bottlenecks to access their markets. If one were to walk into a Kenyan supermarket today, they would find Ugandan products the most affordably priced, and the first to get off the shelf due to their high demand by locals.

What is your last word?

I urge our regional leaders to recognise the value of building a strong East African manufacturing base given that the benefits of a strong region are shared by virtue of our EAC cooperation. With the advent of the African Continental Free Trade Area, we cannot afford to continue fighting neighbourly battles given that we are now competing at continental level.

Our discussions at regional level should instead be focused on building competitiveness against the continental level competition and how we identify and tap into the emerging continental opportunities.