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The East African : November 3rd 2013
The EastAfrican NEWS NOVEMBER 2-8,2013 nomic Survey 2013. The East African Business Council expert Michael Baingana said the challenge is that trade between EAC member states is not facilitated. He said issues of standard recognition and certification of product marks are the main problems because each regulatory body operates independently. “But the positive side is that EAC is currently working on regulatory framework for the region. About 1,600 product standards are already considered EAC standards, meaning they can trade without being subjected to national standard regulations,” Mr Baingana said. However, critics warn that the EAC is too dependent on trade with the rest of the world — mainly the US, Asia, and Europe — to drive its growth. East African Business Council executive director Andrew Luzze said EAC intra-trade at the moment stands at 13 per cent of the total trade volume, against the 87 per cent of the business quantity that goes to the rest of the world. “This is an unhealthy trend. 36 NTBs have been resolved. Business executives say that NTBs are hurting trade among EAC countries, a situation that has, for example, contributed PROGRESS REPORT AGREEMENT: Last week, presidents of four East African nations — Rwanda, Uganda, Kenya and South Sudan — signed a Single Customs Territory into being at the 3rd Integration Projects Summit in Kigali, to boost business between member states and eliminate the remaining non-tariff barriers (NTBs). BARRIERS: Elimination of NTBs, which include red tape, anti-dumping measures and anti-subsidy issues, will help to hasten transit cargo from Kenya’s port of Mombasa. The agreement will reduce the time for cargo to reach Rwanda from the port of Mombasa from 21 days to eight, while shipments to Uganda from Mombasa would take five days from 15 days. The presidents resolved to ensure that transit cargo is equipped with an electronic monitoring system by January 2014. SINGLE TOURISM VISA: East African leaders at the summit also want heads of immigration, security organs, finance and tourism to discuss, in November, the waiving of visa fees for African nationals and conclude this before the next summit. They also approved the waiving of visa fees within the region, and sought ways to lower the cost of air travel. “Heads of State will launch the East Africa Tourist Visa and the use of ID as travel documents during the 4th Summit,” the leaders said. ventures-africa.com to the decline in Kenya’s export trade in the region. Kenya’s exports to EAC member states shrank by 1.8 per cent in 2012 from 2011, according to the Eco- We are exporting thousands of jobs to the outside world while our own people are jobless. We are ought to change the trend,” Mr Luzze said. Records show that in the Eu- ropean Union, intra-trade accounts for 60 per cent of its total trade, while trade within the North America Free Trade Area accounts for 48 per cent of the total trade of its member states. Tanzanian economist Johan- sein Rutaihwa said low intra –regional trade in EAC countries is also driven by cultural perspective among their citizens, thus more public education is needed. “This goes hand in hand with having a mechanism of changing members’ mentality to praise what EAC countries produce,” Mr Rutaihwa explained. Policy-makers also need to understand the importance of having good infrastructure for intra-trade to grow. 13 The EAC headquarters in Arusha. Picture: File Does EAC Sec≥eta≥iat need g≥eate≥ powe≥s? By ADAM IHUCHA Special Correspondent THE ONGOING disputes within the EAC — with fears that partner states are pulling in different directions — have exposed the bloc’s structural weakness. The EAC Secretariat has re- mained tight-lipped over the rift, caused by the formation of the “coalition of the willing” comprising of Kenya, Uganda, and Rwanda, excluding Tanzania and Burundi. When EAC officials have spoken, they have expressed confidence that the centre is still holding in Arusha. A look at the EAC Treaty shows that neither the Secretariat nor the Secretary General have the mandate to reprimand partner states over transgressions. Article 72 (2) of the Treaty provides that staff of the Community will refrain from any actions that may adversely reflect on their position as international civil servants, and will be responsible only to the Community. “The EAC Secretariat and its ve≥sus ≥eality significant growth in the value of Kenya’s exports to the two countries. Between 2007 and 2011, Kenya’s exports to Rwanda increased by 87 per cent, while exports to Burundi increased by 95 per cent. Some successes have been re- alised. Kenya has reduced weighbridges and roadblocks on its section of the Northern Corridor, reducing the time it takes to move goods from Mombasa port to Kigali to eight days, from a previous 20 days. Kenya, Uganda and Rwanda now plan a single tourist visa starting next year, while nationals of the three countries will be able to use national or school IDs as travel documents. A weighbridge in Kenya. They are considered one of the non-tariff barriers to regional trade. Picture: File accounting officer, or any other official, is unable to reprimand any partner state over any misconduct,” spokesperson Richard Owora said over the phone. Tanzanian EALA member Abdulah Mwinyi said in case of an act of omission or commission by a partner state, which is not in conformity with the Treaty, the Secretary General can only raise it at a meeting of the Council or the Summit. Article 14 of the Treaty stipu- lates that the decision-making body of the EAC is the Council of Ministers and the Heads of State Summit. The Secretary General and the Secretariat in Arusha only have a co-ordinating role. “Herein lies the systemic weakness, making decisions by consensus. I think reform is needed to review this mode of decision-making to majority decision on at least operational matters,” Mr Mwinyi said. He said they are pushing for the Secretariat to be transformed into a commission with full autonomy, not only to make decisions on regional matters, but also to reprimand rogue partner states. Mr Mwinyi said the integra- tion process has been dithering because EAC decisions have been made by civil servants from partner states, who hold their respective national interests dear. “With this nationalistic out- look, I don’t see the EAC integration process going anywhere unless some major decisions are ceded to the Secretariat,” he said. A team of reviewers hired by the Secretariat, WYG Consultants, have presented recommendations based on a functional analysis of the EAC’s institutional framework, covering structures, functions, work processes, decision–making, and institutional inter-actions. The 27th EAC Council of Ministers meeting report, seen by The East African, indicates that the consultants made several proposals. Among them are the establishment of the degree of power partner states are willing to transfer to, or share with, a supra-national entity, and the pace of this transfer, which can relate to legislative initiative, regulatory power, or international negotiation power. Others are the introduction of sanction mechanisms for non-compliance, and the readiness of partner states to accept in-built sanction mechanisms, including financial penalties for non-implementation of their commitments. The consultants also under- lined the need to redefine the “subsidiarity” principle, and establishment of the scope of jurisdiction the partner states are willing to confer directly to the East African Court of Justice, as the guarantor of the effective and uniform implementation of Common Market rules. The consultant proposed that the role of the Ministries of EAC Affairs be increased at the national and regional levels.
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