By ADAM IHUCHA Special Correspondent
In Summary
- EAC partner states apply different external trade tariffs because of their membership to different trade blocs.
- Experts say the preferential treatment granted to third parties reduces the expanded market that the EAC is supposed to offer regional industries.
Membership to multiple, competing trade blocs
cost EAC business firms trade opportunities of $22.7 billion between
2005 and 2012.
The EAC common market scorecard 2014 attributes
the delay in implementation of the common external tariff (CET) to
partner states’ dual memberships in other blocs.
EAC partner states apply different external trade tariffs because of their membership to different trade blocs.
Tanzania is a member of the Southern Africa Development Community (SADC) and subscribes to a different tariff structures.
Kenya, Rwanda and Uganda are members of the Common
Market for Eastern and Southern Africa (Comesa), and Burundi belongs to
both Comesa and the Economic Community of Central African States
(Eccas).
Experts say the preferential treatment granted to
third parties reduces the expanded market that the EAC is supposed to
offer regional industries.
Data shows that the intra-EAC trade grew from $1.6
billion in 2005 to $5.5 billion in 2012, due to the launch of the
common Customs Union. During that period, intra-EAC trade to total
regional trade grew from 7.5 per cent in 2005 to 11.5 per cent in 2011.
“This is far from the true potential of the EAC
market as $22.7 billion in inter-regional trade was lost to other
regional trading blocs such as SADC, Comesa and Eccas between 2005 and
2012 due to delays in effecting the CET,” said Catherine Masinde of the
International Finance Corporation.
In the period under review, Tanzania’s trade value
with SADC was $10 billion, representing 13.5 per cent of its total
external trade.
Kenya’s and Uganda’s trade with Comesa, valued at
$8 billion and $3.4 billion respectively, was equivalent to seven per
cent and 7.5 per cent respectively of their external trades.
Rwanda’s trade with Comesa was $452 million,
representing 6.8 per cent of its total external trade; Burundi’s
combined trade total with Eccas and Comesa was worth $224 million.
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