FOREIGN NEWS : Red tape hinders EAC commerce

NAIROBI - Non-tariff barriers (NTBs) continue to limit intra-regional trade in East Africa because policy makers are doing very little to curb them. They are responsible for the increased cost of doing business within the region besides negatively impacting on trade and co-operation. The most notable NTBs, according to a report, are customs and administration documentation, immigration procedures, cumbersome inspection requirements and police road blocks. Others are different trade regulations among EAC countries and “varying, cumbersome and costly” transit procedures in the EAC partner states according to a report. Consultants hired to evaluate the East African Community Customs Union said in Arusha, Tanzania that administrative hitches associated with the barriers have not been dealt with firmly by regional leaders. They said the existing framework for monitoring NTBs was not only ineffective but does not deal with ad-hoc administrative cases which arise in the course of cross border trade. “This is because it takes long to constitute the committee meetings or for respective revenue authorities to exchange information in order to resolve emerging NTB issues,” they noted in a report to EAC high level forum on customs union. The consultants proposed the establishment of rapid response units within the ministries of trade in member states to facilitate “faster and more effective” means of dealing with cross border trade hitches. “In addition, this will allow the national NTB monitoring committees to deal with structural as opposed to day to day operational issues,” they said in a report titled An evaluation of the Implementation and Impact of the EAC Customs Union presented to the meeting. The study commissioned by EAC directorate of customs and trade said removing NTBs has been much of a policy issue as any action can lead to tensions or threats to retaliation by the member states. The consultants proposed that officials of the ministries of Trade from all the five member states be charged with the responsibility of overseeing reported cases of NTBs and resolve disagreements which may arise. A fully fledged customs union is expected in January 2010 after the end of the five year transitional period during which selected goods from Kenya to Tanzania and Uganda were being charged some duties one way. Currently, the highest duty paid on goods to Tanzania is five per cent and Uganda two per cent. From next year, goods will be traded duty free within partner states. The January zero tariff will also cover Burundi and Rwanda. At the start of a two-day forum in Arusha, EAC director general of customs and trade Peter Kiguta said a mechanism for the removal of the barriers will soon be in place. “I wish to recognise the goodwill that exists in the partner states in eliminating the NTBs. In this context, a mechanism for their removal has been adopted and a time-bound programme for their elimination adopted,” he said. Kiguta defended the EAC customs union saying the benefits have accrued to the region from its implementation including trade and investment flows into East Africa from the outside world. For instance, trade between the region and other countries increased from $1.95 billion in 2003 to around $ 2.8 billion in 2007 representing a 195 per cent rise Ends