Strides in regional trade despite problems

What you need to know:

  • In addition, the partner states should desist from subjecting products from the EAC region to additional levies that would have been subjected to tax in the home country.
  • Again, free movement of labour within the community needs to be addressed.  Tanzania charges $200 (Sh18,200)  for a visa regardless of the period of stay.
  • There are double standards in implementation of market access. Chinese products are not subject to the same scrutiny as EAC goods, for example
    Counterfeits also continue to frustrate the trade in locally produced goods.

As the East African Community (EAC) evolves towards a political federation, it is good to recognise the strides made so far in integration.

Last year alone, the block eliminated  66 per cent of the non-tariff barriers, and that has enhanced trade.

Regional integration is important for the manufacturing sector, as it provides a larger market. That notwithstanding, a number of areas still need to be concluded or ratified to ensure a smooth flow of business.

The initial stages of integration saw the growth of Kenyan exports. There has, however, been a slowdown, and figures from the 2014 Economic Survey indicate that Kenya’s exports to the EAC reduced by 7.4 per cent from about Sh134 billion in 2012 to Sh124 billion in 2013.

This is mainly attributed to the imposition of non-tariff barriers by partner states, the non-recognition of EAC certificates of origin, regulatory authority actions, lack of harmonised standards and the misinterpretation of the provisions on the Customs Union Protocol on export promotion schemes.

The Sanitary and Phytosanitary Protocol still needs to be ratified by the partner states in order to resolve the long outstanding non-tariff barriers on standards.
In addition, there is a need to hasten the opening up of one-stop border posts to make the process more efficient.

It is pleasing to note that there is a Non-Tarrif Barriers Bill, which is before the East African Legislative Assembly. The Bill needs to be fast-tracked so that there is a legal framework for the elimination of non-tariff barriers.

There has been a delay in gazettement of the revised EAC rules of origin that was adopted in November 2014 by the Council of Ministers. Gazettement would resolve some market access issues for key exporting sectors including motor vehicles, furniture, and chemical and allied.

Double taxation has been a thorn in the flesh for the business community and it is sad to note that even after an agreement was made to ratify the EAC agreement on double taxation, only one partner state ratified. There is a need to expedite the ratification by the other partner states.

ADDITIONAL LEVIES

In addition, the partner states should desist from subjecting products from the EAC region to additional levies that would have been subjected to tax in the home country.

Many a times, officers manning the borders do not have sufficient knowledge on the procedures, rules and regulations applicable under the region’s protocol agreements.

Again, free movement of labour within the community needs to be addressed.  Tanzania charges $200 (Sh18,200)  for a visa regardless of the period of stay.
Of concern as well is the pace of standards development.

It takes two years to draft and approve a standard. Moreover, there is a need to ensure that partner states adopt the harmonised standards.

There are double standards in implementation of market access. Chinese products are not subject to the same scrutiny as EAC goods, for example
Counterfeits also continue to frustrate the trade in locally produced goods.

A survey by the Kenya Association of Manufacturers shows that Kenyan industries lose Sh2 billion in illicit trade and counterfeit goods annually.

Ms Maina is the chief executive officer of Kenya Association of Manufacturers ([email protected])