The EAC Partner States' desire to create a conducive business and competitive environment is hampered by existence of NTBs. The East African Community Customs Union Protocol commits Partner States, among other things, to the immediate elimination of all existing non-tariff barriers (NTBs) to trade on intra-EAC trade and to further refrain from introducing new ones. However, trade between the EAC countries is greatly hampered by the existence of NTBs, raising concerns among policy makers and the business community.
It is in view of the above that the East African Legislative Assembly Committee on Communications, Trade and Investment (CTI) conducted stakeholder's workshop from 25th -27th March, 2012 to discuss the status on the elimination of Non-Tariff Barriers within East Africa Community.
The Committee Chairperson, Hon. Dr. James Ndahiro welcomed the participants and explained the purpose of the workshop as to respond to the expectations of the East Africans on the benefits of a single customs territory and focus on NTBs that have consistently raised the cost of doing business, affected the competitiveness in the region and the free flow of goods and services.
The Committee Chairperson invited the Guest of Honour, Permanent Secretary, Ministry of Trade Rwanda to officially open the workshop. The Guest of Honor, Mr. Emmanuel Hategeka, Permanent Secretary, Ministry of Trade Rwanda welcomed the participants to the workshop and expressed gratitude to EALA for organizing the meeting on this important topic and choosing Rwanda to be the host.
He pointed out that Non-Tariff Barriers (NTBs) have persisted to block and delay the integration process yet the Partner States had agreed to eliminate all NTBs and refrain from introducing new ones. Contrary, out of 35 identified NTBs since 2008 up to now, only 12 have been dealt with, the 23 are still unresolved and 16 new ones have been introduced. For instance weigh bridges have increased from 5 to 8 between Dar es Salaam and Rusumo the border with the Republic of Rwanda and Tanzania, and police checks and road blocks along Northern Corridors have also increased. The delays at the border points and ports account for 30-40% on trade cost. However, he acknowledged tremendous efforts so far made on reducing NTBs in EAC and commended the progress registered at the border posts that are operating on a 24 hour basis and the launching of Electronic Single Window System which is intended to reduce bureaucracy.
The Permanent Secretary concluded his remarks by noting that there is need to reduce check points and convert them into well-structured rest points for track drivers, and reduce non-compliant institutions and undesirable trade restrictions.
The overall objective of the workshop was to share views on NTBs and Trade facilitation in East Africa.
The Specific objectives of the workshop were three-fold:
(i) To assess the status of the elimination of NTBs in the EAC region;
(ii) To assess the facilities and infrastructures for the elimination of NTBs in the region;
(iii) To come up with possible recommendations for the elimination of NTBs.
3.0 EXPECTED OUTPUTS
The expected outputs of this workshop were:
(i) The NTBs to trade be identified;
(ii) Necessary measures for corrective action be identified;
(iii) Follow up mechanisms for successful elimination of NTBs agreed upon.
4.0 ATTENDENCE AND METHODOLOGY
The workshop was attended by all Committee Members, representative from the Ministries of Trade, Revenue Authorities (Customs departments) including representatives from Private Sectors Federations, Association of Traders; and Association of Transporters East African Business Council, TradeMark East Africa, staff from both the EAC Secretariat and EALA. The meeting was organized in form of Paper presentations, interactions and plenary discussions between participants and Experts.
During the two days of the workshop a number of papers were presented. By and large, they focused on the fact that NTBS have had a negative impact on the trade expansion efforts in the region, modalities for a common, comprehensive and holistic approach for the elimination of NTBs in EAC is appropriate.
Towards this end the meeting deliberated on the following: the overview and state of play of NTB's in the EAC region; the role of Customs in trade facilitation in the EAC region; the EAC Non-Tariff Barrier Monitoring Mechanism; the Impact of NTBs on cross-border trade in the EAC; addressing NTBs to trade in the EAC; and development of legally binding mechanism on the elimination of Non-Tariff Barriers.
6.0 IDENTIFIED NTBs TO TRADE
The Committee Members and stakeholders acknowledged the following NTBs facing the business community in the EAC Region;
Congestion, and delays especially in issuing bonds at the borders;
Lack of use of harmonized procedures manual by customs;Existence of weigh bridge stations in Central and Northern corridors;
Several police roadblocks along Northern and Central Corridors;
Lengthy procedures for issuing of work permits;
Non recognition of certificates issued by accredited institutions of other Partner States;
Corruption along Central and Northern corridors;Lack of harmonized port procedures manual;Border institution working hours are not harmonized;
Lack of verification sheds and parking yards at border posts;
Plastics manufactured in the region are not charged 0% CET as per EAC schedule on elimination of internal tariff;
Lack of implementation of Cargo tracking system limiting movement of goods;
Certificates of temporary business assignments (CTA) Visa of US $300 for salesmen and Consultants by some Partner States;
US 200 entry fee for truck driver and conductors by some Partner States;
Charges by container freight stations (CFS) vary from port charges;
Corruption affects genuine players at the border points;
Consumer goods are subjected to testing despite the product having been tested by the bureau of standards;
Lack of harmonized road user charges;
Requirement for transporters to have introductory letters;
Cigarettes manufactured in the EAC region and imported into a Partner State are discriminated for purpose of levying the excise duty on the basis of not having attained a local tobacco content of 75% or 70% in some Partner States;
Lack of availability of simplified certificate of origin at the border;
Tourists vans not allowed to cross the borders in some countries;
Non recognition of the EAC rules of origin certified by the competent authority in some countries;EAC Bureau of Standards have varying procedures for issuance of certification marks, inspection and testing; and numerous institutions involved in testing goods;
Un-harmonized Standards in the EAC in spite the Standards, Quality Assurance, Metrology and Testing (SQMT) law in place.
7.0 EMERGING ISSUES/OBSERVATIONS
During the two-day workshop, the Committee Members and stakeholders raised and or noted the following emerging issues and or observations:
* Intensifying the on-going consultation process to analyse the current bottlenecks and empower the National Monitoring Committees (NMCs).
* Reclassifying the NTBs in standardized clusters and Improving the Time Bound Program Monitoring Mechanism Benchmarking with other Regional Economic Communities legally binding mechanism and emulate best practices consistent with the legal tradition of the Partner States.
* There are a lot of administrative barriers which hinder the EAC Citizens to access capital within the EAC Partner States, for example;
- Opening of capital accounts,
- Participation of stock markets,
- Limited free movement of services especially brokerage firms in some EAC Partner States,
- Limited Cross border trading for brokers and cross listing of securities in EAC Partner States,
- Un-harmonized monetary policies i.e. exchange rates and interest rates,
- Difficulties in Cross listing of securities within the Partner States hinder opportunities to citizens of EAC to diversify their investments;
- It was noted that exchange rates interferes with the capital market due to its unpredictability;
* Need for rehabilitation, improvement and development of well-functioning railway system to complement the transport corridors for example Rwanda and Burundi;
* Electronic cargo transport system will reduce road blocks in customs areas;
* There is absence of legal mechanism for enforcement and elimination of NTBs among Partner States;
* It was noted that the harmonization of processes i.e. One Stop Border Posts will help to reduce delays for the business community at the border posts;
* Participants raised concerns that it is good to have market driven cooperation and not competition;
* It was noted that ownership of integration process by the people will fast track the elimination of the NTBs;
* It was observed that Partner States do not utilize the EACJ on business disputes and therefore Fast tracking of the EACJ Sub-registries in Partner States will make it more feasible to the business community;
* It was observed that there is a need for ministers to participate in National Monitoring Committee meetings on NTBs is effective since they are the policy makers in their Partner States;
Arising from discussions during the workshop, the Committee recommends the following;
* EALA should play a prominent role in the EAC integration process and specifically continue to monitor the elimination of NTBs;
* The Council of Ministers should extend the East African Court of Justice jurisdiction to resolve commercial disputes and should fast track the sub registries in each Partner States;
* Duplication of roles and responsibilities within institutions dealing with NTBs within the Partner States is a barrier itself;
* Council of Misters should establish a legal and institutional framework to compel Partner States to comply with the elimination of NTBs;
* The Standards, Quality Assurance, Metrology and Testing (SQMT) law should be operationalised in the Partner States with immediate effect;
* The Council of Ministers to direct the Customs and Revenue Authorities for implementation and harmonization of the IT systems at the border posts ad ports;
* Strengthen the National Monitoring Committees on NTBs in the respective EAC Partner allocations;
* EALA continues to engage with National Monitoring Committees on the elimination of NTBs;
* The Secretary General should ensure the establishment of an interactive Information exchange portal for National Monitoring on NTBs exchange of views and data on a regular basis and it should be hosted at the EAC Secretariat;
* Partner States should reform Payment systems to allow faster movement of funds
In conclusion, the challenges cited should be seen as opportunities for all Partner States to commit themselves to eliminate NTB's to create an enabling environment for the achievement of a functional Customs Union and Common Market, and EALA will continue to play its oversight role in ensuring that the laws, rules and regulations agreed at the regional level are operationalized.
* EAC/EALA COMMITTEE ON COMMUNICATION, TRADE AND INVESTMENTS: REPORT OF THE WORKSHOP ON NON-TARIFF BARRIERS (NTBs) IN THE EAC REGION, March 25th–28th, 2012, Kigali, Rwanda.
* Related article: EALA adopts key reports on NTBs, audit of EAC laws and legislation